Rail­ways al­lowed to float global ten­der for steel rails

Do­mes­tic man­u­fac­tur­ers fail to meet the quan­tity re­quire­ments of Rail Vikas Nigam

The Hindu Business Line - - NEWS - TWESH MISHRA

The Rail Vikas Nigam Ltd (RVNL) has been granted an ex­emp­tion from the manda­tory lo­cal sourc­ing clause while procur­ing steel rails. The ex­emp­tion was given af­ter it was found that Steel Au­thor­ity of In­dia Ltd (SAIL) can­not meet the full re­quire­ments of the com­pany.

The de­ci­sion was taken at the eighth meet­ing of the Griev­ance Com­mit­tee on Do­mes­ti­cally Man­u­fac­tured Iron and Steel Prod­ucts (DMI&SP) Pol­icy. With this the Rail­ways can now float a 100 per cent global ten­der as In­dian steel play­ers have failed to meet quan­tity re­quire­ments of steel rails.

Ac­cord­ing to the min­utes of the meet­ing, Jin­dal Steel and Power Ltd (JSPL), the only other lo­cal steel man­u­fac­turer that may ful­fil the re­quire­ment, does not qual­ify ei­ther since it does not have a ‘pas­sen­ger car­ry­ing cer­ti­fi­ca­tion’ from the Cen­tre.

RVNL said the es­ti­mated re­quire­ment of rails for projects to be com­mis­sioned in the next two years, in­clud­ing the short fall in the sup­ply dur­ing the cur­rent fi­nan­cial year, is 5,00,000 tonne for the heav­ier sec­tion (60 kg) and high ten­sile strength (90 Ul­ti­mate Ten­sile Strength or wear re­sis­tant grade) rails.

“RVNL is pro­ceed­ing with in­vi­ta­tion of global bid­ding for 5,00,000 tonne of 60 kg 90 UTS rails. Bids will be fi­nalised af­ter ap­proval from the Min­istry of Steel,” the rail PSU said in its sub­mis­sions be­fore the Com­mit­tee.

This is be­ing done af­ter a year has passed since the ini­tial in­vi­ta­tion RVNL’s es­ti­mated re­quire­ment of rails for projects to be com­mis­sioned in the next two years is 5,00,000 tonne

of ten­der with the lo­cal sourc­ing clause.

Lo­cal man­u­fac­ture

Ac­cord­ing to the DMI&SP Pol­icy, all gov­ern­ment agen­cies are re­quired to meet their re­quire­ments of steel prod­ucts worth above ₹50 crore through lo­cally man­u­fac­tured steel. The pol­icy cov­ers Gov­ern­ment PSUs, So­ci­eties, Trusts and statu­tory bod­ies set up by the Gov­ern­ment

To be cat­e­gorised as do­mes­ti­cally man­u­fac­tured, a steel prod­uct needs to have a min­i­mum

value ad­di­tion of 15 per cent that has taken place within the coun­try.

In its rep­re­sen­ta­tion, RVNL said, “Con­sid­er­ing the do­mes­tic pro­duc­tion con­straint of rails, which is very crit­i­cal for pas­sen­ger safety and non-avail­abil­ity of any other ap­proved do­mes­tic man­u­fac­turer of rails other than SAIL, the Min­istry of Rail­ways has per­mit­ted RVNL to pro­cure/ im­port rails from sources other than SAIL for rail re­quire­ment for projects to be com­mis­sioned in 2019-20 and 2020-21.”

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