Alstom India agreed to reduce its bid price from the first offer of Rs 150.9 crore, which the company calculated it would achieve in the budget passed in May 2023, but attempts to finalise this figure between the Indian Railways and the company were unsuccessful.
The Indian Railways has cancelled its Rs 30,000-crore tender for manufacturing and maintenance of 100 aluminium body Vande Bharat trains, said Olivier Loison, Managing Director, Alstom India.
Loison said:
“Indian Railways has cancelled the tender. However, with our strong local knowledge and investments in industrial and human capital over the years, we are well-positioned and committed to support the realisation of this vision [of the railways] in the future, should the opportunity arise.”
Probabilities over the bidding price
As railway officials said that the tendering committee decided that the bidding price of Rs Rs 150.9 crore per train offered by the French multinational company (MNC) was higher than expected. While giving his view, Mr Bhattacharjee criticized the proposal of Rs 150.9 crore per train set as being on the higher side and requested him to fix it at Rs 140 crore.
However, Alstom India insisted on closing the deal at Rs 145 crore per train. The French company ended up being the offeror who made the lowest bid in the Rs 30,000-crore tender that was opened on May 30, 2023. He saw that the firm had offered a bid of Rs 150.9 crore per train and had planned to build all 100 vande Bharat rakes, the documents stated.
An official said:
“The cancellation of the contract helps Indian Railways to buy more time to get the best possible prize. The bidders, too, will be better prepared to set up adequate manufacturing facilities.”
Emails sent to the Ministry of Railways have gone unanswered as of now.
Did Alstom quote a ‘good price’?
Earlier in July 2023, the chief executive of Alstom, Henri Poupart-Lafarge, declared plans to apply new aluminium technology for the project. In an interview with CNBC TV-18 in July last year, Poupart-Lafarge said that the company quoted a good price for the project.
Earlier, a contract was made to produce 200 Vande Bharat sleeper train sets, all produced from stainless steel, at Rs 120 crore per rake, an official said.
Competition was important
Another official argued that competition is needed to get the best price as it is needed to get the best product. The official stated that the next tender would involve multiple players compared to the competition between only two companies in the last round to guarantee the speedy manufacture of the train sets.
The first official gave the procedure to qualify for the tender as follows: To bid for the tender, the companies have to prove that the company has a research and development (R&D) facility so that the company can prove that it can construct a prototype; the company must also prove that it has the capability to build at least five train sets per year.
In total, the company’s plans comprise the delivery of 100 train sets within seven years. Alstom had the second bid, with the only competition coming from Stadler Rail, a Swiss-based railway rolling stock manufacturer in a consortium with Hyderabad-based Medha Servo Drives, which offered Rs 170 crore per train set.
Virtually all deals indicate that the train manufacturing company will receive Rs 13,000 crore after delivery of the train sets while the remaining Rs 17,000 crore will be paid periodically for the maintenance of the trains over a 35-year period.
Bidders are far between
There was expectation of 5 offers at least for the tender such as major german company Siemens in collaboration with Bharat Earth Movers Limited (BEML), Russian Transmashholding, Rail Vikas Nigam Ltd. However, these companies did not participate in the bidding process due to the reasons pointing to the fact that they did not meet the technical standards.
Tenders for these trains were open in July 2022, and they were to be opened on 15 February 2023. The last bid date was pushed down to February 23, 2023, because of the poor public response to the bonds.
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Why not stainless steel?
It is also reveals that the aluminium train sets are lighter and more energy efficient as compared to the models built from stainless steel. The version of Vande Bharat with sleeper class coaches is expected by the Indian Railways to launch by the first quarter of the next financial year 2024-2025.
Up to this time, orders have been placed for manufacturing 102 and 200 chair car and sleeper Vande Bharat train sets, respectively.
Improved technology powers Vande Bharat
The Vande Bharat is a semi-high-speed train with 16 modulated coaches, the self-propelling system that is integrated into each coach to removes the need for an attached locomotive.
This system, called distributed traction power, has gained popularity in many countries for passenger trains. Flexible power allows faster acceleration and speed reduction compared to a loco-hauled train set that takes time to attain its maximum speed or just slows down slowly.
These trains include features such as better seating arrangements; the trains’ air conditioning system eliminates bacteria, and the train can attain a maximum speed of 160 kilometres per hour within 140 seconds of acceleration.
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