Indian Railways reportedly cancels Vande Bharat train tender worth ₹30,000cr
The Indian Railways has canceled a ₹30,000 crore tender for the production and maintenance of 100 aluminum body Vande Bharat trains. This decision was confirmed by Olivier Loison, the Managing Director of Alstom India to Moneycontrol. The cancellation was due to a disagreement over the proposed bidding price by Alstom India, a French multinational corporation that had emerged as the lowest bidder with an offer of ₹150.9 crore per train set.
Price dispute leads to contract termination
Railway officials considered Alstom India's bid of ₹150.9 crore per train set to be excessive, and suggested a cap of ₹140 crore. Despite negotiations, the French company held firm on a price around ₹145 crore per train set. An official stated that "the cancellation of the contract helps Indian Railways to buy more time to get the best possible prize." This move also provides bidders with an opportunity to better prepare their manufacturing facilities.
Alstom's stance and future tender plans
In July 2023, Alstom's CEO Henri Poupart-Lafarge defended their pricing strategy for the project. He also disclosed plans to incorporate new aluminum technology into it. The previous contract for manufacturing 200 Vande Bharat sleeper train sets made of stainless steel, was awarded at ₹120 crore per rake. Officials now believe that competition is crucial to secure the best price, and intend to invite multiple players in the next round of tendering.
Tender eligibility and previous bidders
The eligibility criteria for the tender mandate that firms must possess a research and development facility, capable of manufacturing a prototype and assembling at least five train sets annually. The contract also stipulates delivery of all 100 train sets within seven years. In the previous round, the only other bidder was a consortium comprising Swiss railway rolling stock maker Stadler Rail and Hyderabad-based Medha Servo Drives, who bid around ₹170 crore per train set.
Contract details and future plans
The winning bidder would receive ₹13,000 crore upon delivery of the train sets, with the remaining ₹17,000 crore paid for maintenance over 35 years. Despite expectations of at least five bids including, Siemens in partnership with Bharat Earth Movers Limited (BEML), Russia's Transmashholding and Rail Vikas Nigam Ltd, these companies opted out due to failure to meet technical norms. The Indian Railways plans to roll out the first sleeper version of Vande Bharat trains by Q1 2025.
