160 new Indian trains: Ministry calls for fresh EOI

For the second time in a year, expressions of interest were called by the Ministry of Transport to buy 160 passenger coaches for Sri Lanka Railways under an Indian line of credit.

The deadline ended on Friday, with one condition of the loan being that only manufacturers and suppliers certified by the Indian Government may apply. Two companies submitted to India's Exim Bank expressions of interest for pre- qualification. One is the private sector Titagrah Wagons Ltd while the other is a Government of India enterprise called M/s Rites Ltd of Gurgaon.

The first tender was cancelled earlier this year after Sri Lanka’s Procurement Appeals Board (PAB)--which hears complaints from unsuccessful applicants--found both bidders to be non-compliant with major tender conditions.

That contract had been awarded to Rites Ltd, despite it soliciting exceedingly more than the price offered by the private sector’s M/s Texmaco Rail & Engineering Ltd of India. “As a percentage, price quoted by the bidder was higher by 118% than that of the lowest bidder,” the PAB said.

Texmaco has not placed a bid this time. The new tender conditions rule out joint ventures. At the last instance, Texmaco had said it would set up a rail coach factory in collaboration with a company called CNR Corp but failed to submit

a legal agreement to support a tieup.

It is not clear how the tender process will unfurl as the Indian Exim Bank last year wrote to the Director General of External Resources in Sri Lanka’s Ministry of Finance stating that the Government must buy coaches from M/s Rites as it was the Indian Government’s official agent for such sales. But the declared policy of the Sri Lanka Government is to call for tenders.

Exim Bank rules published online also facilitate the soliciting of bids, provided they are from authorised Indian companies. “The lending Bank will invite Expression of Interest from Indian companies/entities and undertake a pre-qualification exercise for each project at its cost,” the operational guidelines state. “The list of pre-qualified companies/entities will be provided to the borrowing Government. Thereafter, the project will be put to bid under a competitive bidding process by the borrowing Government/agency.”

“Complete transparency and fairness in the award of contracts by borrowing Government to Indian companies under LoC [Lines of Credit] is extremely critical,” the document says. “Borrowing Governments and their nominated agencies are expected to conduct transparent and fair bidding process which should be clearly defined...”

There are three Indian State-owned factories that produce passenger coaches. They are Integral Coach Factory (ICF) in Chennai, Railway Coaches Factory ( RCF) in Kapuruthala and Bharath Earthmoving Machinery Ltd (BEML) which is a company under the Ministry of Defence. M/s Rites is the legal sales arm of ICF and RCF. The two private sector companies in the business are Titagrah and Texmaco.