Indian Railways to procure 22,000 Wagons; Tender to be published shortly

NEW DELHI: Indian Railways is set to put out its largest tender for 22,000 wagons at a cost of at least Rs 7,000 crore in the current financial year that could see big orders for Texmaco Rail and Engineering, Titagarh Wagons, Jindal Rail and Jupiter Wagons, among other wagon makers.

The orders would be through the reverse e-auction model, and if the lowest bidder isn’t able to serve the entire order, the second-lowest bidder would get a chance without a fresh tendering process.

The railways ministry hopes the bulk tender would help it reduce the cost of wagons by at least 15-20%. On an average, the ministry procures 8,000 wagons a year.

“This is the largest tender in terms of size as well as amount that the railways has ever issued,” a rail ministry official said. “The bulk tender is being issued keeping future demand in mind. Currently, we are not able to serve to the larger clients as rakes are not available. The ministry is now ensuring the rakes are available to bulk consumers throughout the year,” the official said. Recently, Rail Minister Piyush Goyal had asked the industry to ramp up their wagon manufacturing capacity.

“Else, the ministry will have no option but import wagons. I have been wanting around 1,000 wagons a month, but what the industry is providing is around 400. If we don’t get the required number… Then don’t come to us asking to increase the import duty on wagons,” Goyal had said.

Last week, a high-level meeting was held in Rail Bhavan between the top officials of the Railway Board and wagon manufacturer to discuss issues related to supply of wagons. Indian Railways has set a target of loading more than 1,200 million tonne of freight in the current financial year. Out of the total loading target, about 45% would come from the loading of coal alone.

Freight transportation is the only profit-making segment for the railways and the national transporter earns 60% of total revenue from it. Passenger segment, that causes an annual loss of more than Rs 30,000 crore, gives railways just 25% of its total revenue. Remaining revenue comes from other sources including commercial exploitation of its assets.

Railways is ramping up its freight carrying capacity by 1100 million tonne in the next two years as it is hoping to complete the construction of 3,300km-long dedicated freight corridors by 2020. Goyal has set a target for railways to increase its share in the country’s total freight transportation basket from the existing 33% to 45%.

“Our freight carrying capacity would be 2,300-2,400 million tonne from the existing 1,200 million tonne in the next two years. The number of wagons required would be massive,” the official said.