Indian coach companies on collision course over tender dispute

A tender for the supply of passenger coaches to the Department of Railways has been awarded by the Transport Ministry to an Indian company though its prices were more than double those offered by the second bidder.

The failed bidder has now taken his case to the Procurement Appeals Board, the ministry's secretary confirmed. The contract is to supply 160 passenger coaches under the Indian line of credit.

The Indian High Commission had nominated several companies for the Ministry of Transport to seek bids from. This is the procedure under the Indian line of credit, it was claimed. However, only two companies submitted bids. They were Texmaco Rail and Engineering Ltd of Kolkata, and M/s Rites Ltd of Gurgaon.

Texmaco Rail and Engineering offered a price of US$ 39,333,390 (Rs 5,731,858,257.75) whereas M/s Rites offered a price of US$ 86,000,000 (Rs 12,532,350,000). Texmaco said it would set up a rail coach factory in collaboration with a company called CNR Corp to manufacture the coaches. However, the bid was disqualified on the grounds that the legal agreement between Texmaco Rail and CNR had not been submitted with the bid.

Despite noting that the “offered price is comparatively high”, Rites Ltd was selected for the tender. The company has offered passenger coaches that would be manufactured by Integral Coach Factory in Chennai. The company cannot go ahead with the project, as the process is under appeal.

Several Railways high officials refused to divulge information about the tender. However, Transport Ministry Secretary Nihal Somaweera said, “The procurement process was completed and it is now before the Appeals Board which is at the Presidential Secretariat.”