Railways to go ahead with global tender

The Indian Railways has decided to go ahead with its global tender for rails despite stiff opposition from the steel ministry, which had flagged the government’s policy of giving preference to domestic manufactured iron and steel for government procurement.

“We are going ahead with the ongoing tender according to the plan,” said a senior Railways official, who added that there were no plans to tweak the terms of the existing tender either.

The Indian Railways has set a target of 3,500 kilometres (kms) for track renewal at a cost of ~10,153 crore for 2017-18, which has now been increased to 4,000 kms with Piyush Goyal taking charge as the Union minister. Railways has a memorandum of understanding with the Steel Authority of India Ltd (SAIL) for supply of rails but it turned out that there would be a shortfall in supply of 717,000 tonnes for 2017-18 and 2018-19 and Railways was looking to bridge the deficit with imported rails. The value of the tender was estimated to be to the tune of ~3,500 crore.

On an average, SAIL’s Bhilai Steel Plant supplies about 700,000-800,000 tonnes of rail to the national Railways.

However, according to the provisions of the domestically manufactured iron and steel policy (DMI&SP) for government procurement, Railways had had to seek a waiver or exemption from the Standing Committee, which it had not. It had, however, informed the steel ministry about the tender for imports which conveyed that it would not be possible, following which Railways had approached the Grievance Committee. The preference to locally made steel covers all procurement by the government and public sector undertakings and the steel ministry came out with a notification to this effect. An exception is made where specific grades of steel are not manufactured in the country or where the quantity sought cannot be met from domestic sources.