Indian Railways cancels tender for 100 Vande Bharat Trains amidst pricing disputes

New Delhi, India (Metro Rail Today): In a significant development within India's rail transport sector, the Indian Railways has announced the cancellation of its massive Rs 30,000-crore tender for the production and maintenance of 100 Vande Bharat trains. This decision marks a pivotal moment in the railways’ ambitious plan to enhance its fleet with state-of-the-art aluminium-bodied trains.

The tender, initially valued at approximately Rs 30,000 crore, was intended to oversee the manufacturing and upkeep of 100 advanced aluminium Vande Bharat trains. However, the cancellation follows a dispute over pricing between the Indian Railways and the French multinational corporation, Alstom India, which had been a leading bidder for the project.

Olivier Loison, Managing Director of Alstom India, confirmed the cancellation of the tender. In a statement to Moneycontrol, Loison emphasized the company’s commitment to supporting Indian Railways' vision in the future, leveraging its extensive local knowledge and investments in industrial and human capital. Despite the setback, Alstom India remains prepared to contribute to future opportunities.

The crux of the issue lay in the pricing disagreements. The tender panel found Alstom India’s bid of Rs 150.9 crore per train set to be excessive. The panel had proposed a cap of Rs 140 crore per train set, but Alstom was aiming for approximately Rs 145 crore. This pricing conflict was a significant factor leading to the tender's cancellation.

Alstom India had emerged as the lowest bidder when the tender was opened on May 30, 2023. The French firm had proposed a cost of Rs 150.9 crore per train set for the entire 100-train order. Despite their competitive bid, the negotiations faltered, prompting the need for reevaluation of the tender process.

The cancellation provides Indian Railways with an opportunity to reassess the tender process and possibly negotiate better terms. An official from the railways remarked that the move would allow for a more competitive environment, as future tenders could attract a broader range of bidders, potentially leading to more favorable pricing and improved manufacturing capabilities.

In July 2023, Alstom's CEO, Henri Poupart-Lafarge, had expressed confidence in their bid, citing the integration of new aluminium technology as a competitive advantage. Poupart-Lafarge asserted that the quoted price was competitive for the technological advancements proposed.

The tender process had originally attracted several global players, including the German company Siemens in partnership with Bharat Earth Movers Limited (BEML), Russia's Transmashholding, and Rail Vikas Nigam Ltd. However, many of these companies withdrew due to difficulties meeting the technical requirements set forth in the tender.

Aside from Alstom India, the only other bidder was a consortium consisting of Swiss rolling stock manufacturer Stadler Rail and Hyderabad-based Medha Servo Drives. Their bid, however, came in at approximately Rs 170 crore per train set, which further complicated the tender evaluation.

The choice of aluminium over stainless steel for the Vande Bharat trains is rooted in several benefits. Aluminium trains are significantly lighter and more energy-efficient than their stainless steel counterparts. This shift aligns with Indian Railways' goal of enhancing operational efficiency and reducing overall energy consumption.

The first sleeper variant of the Vande Bharat trains is slated for rollout by the first quarter of 2025. To date, contracts have been awarded for the manufacturing of 102 chair car and 200 sleeper Vande Bharat train sets, showcasing the railways' ongoing commitment to modernizing its fleet.

The Vande Bharat trains represent a leap forward in rail technology. Each train is equipped with 16 self-propelled coaches, eliminating the need for a separate locomotive. This distributed traction system enhances acceleration and deceleration, offering a more responsive and efficient travel experience compared to traditional locomotive-hauled trains.

The Vande Bharat trains feature several technological improvements, including advanced seating arrangements, an anti-bacterial air conditioning system, and the ability to reach speeds of up to 160 kilometres per hour within just 140 seconds. These advancements are designed to provide passengers with a more comfortable and swift journey.

The cancellation of the Rs 30,000-crore tender for the Vande Bharat trains reflects the complexities involved in large-scale procurement projects and the challenges of negotiating optimal terms for both the Indian Railways and the bidding companies. While this setback may delay the implementation of the ambitious train project, it also presents an opportunity for refining the procurement process and ensuring more competitive bidding in the future. As the Indian Railways continues its modernization efforts, the focus will remain on securing the best possible solutions to enhance the nation’s rail transport infrastructure.