Railways finalises bidding documents of Bihar loco plants

Indian Railways
New Delhi, Oct 7: After a delay of more than five years, the process of setting up two mega locomotive plants in Madhepura and Marhora in Bihar has received a push with the contentious issues being addressed.

The ambitious PPP projects, conceived during the tenure of former Railway Minister Lalu Prasad, had hit roadblocks as there were conflicting views on the bidding documents pertaining to issues of technology transfer, price variation clause and maintenance provision.

These issues have finally been addressed and the documents revised accordingly, said a senior Railway Ministry official involved with the project. In order to reduce the financial commitment based on the tenders, Railways have decided to reduce the long term outsourcing of maintenance of locomotives to private entity.

"Now the maintenance will be outsourced for a limited number of locos for the purpose of benchmarking and period of maintenance has also been decreased," the official said. The revised bidding documents have been approved by the Railway Board.

"It was also discussed threadbare in a high level meeting chaired by Railway Minister C P Joshi and attended by Planning Commission Deputy Chairman Montek Singh Ahluwalia," the official said.

Earlier, maintenance was fully outsourced for all manufactured locomotives for a 15-year period as per the bidding document. Marhora unit is expected to manufacture 1,000 diesel locomotives, while the Madhepura factory will produce 800 electric locos over a period of 12 years after the commissioning of plants.

According to the revised provision, the number of locomotives for maintenance has been reduced to 250 for electric and 300 for diesel.

The successful bidder will be given responsibility for maintaining 250 electric locos for 12 years, for diesel locomotives, while the maintenance period of 300 locos will be nine years only, he said. Substantial changes have been made in the request for proposal (RFP) for setting up Rs 1,200 crore electric locomotive plant in Madhepura and Rs 1,500 crore diesel locomotive plant in Marhora.

"Now it will be sent to the inter-ministerial committee for its approval," the official said, adding, then it will be put up before Cabinet for getting a comprehensive approval of all the changes made in RFP.

Besides Railways, the committee comprised senior officials from Finance, Law and Planning Commission. "The new provisions for transfer of technology and price variation clause are aimed at protecting railway interest in a more transparent manner," he said. A consultative meeting with the shortlisted bidders was held to convey the proposed changes.

"Bidders are in general agreement with the changes as the revised RFP is now more equitable for Railways as well as bidders," the official said. The Railway officials are hopeful of breaking the deadlock over the first of its kind big-ticket PPP project in the country and show some progress in the current year.


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