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Railways to revise Rs 310 billion wagon procurement plan after MI contract fail
Industry News- Jul 01,24
The wagons - which are used for transporting crucial commodities such coal and iron ore on the rail network - were to be supplied at Rs 3.19-3.63 million per unit depending on the specifications issued by the railways.
The Indian Railways has had to revise its plan for procuring wagons worth Rs 310 billion after supplier Modern Industries failed to fulfil its contracted obligations, officials stated.
In July 2022, the government awarded contracts for 79,800 wagons to seven suppliers, in what was the largest such procurement initiative by volume, aimed at boosting the existing fleet of 300,000 wagons on the Indian Railways network. The successful bidders included Titagarh Wagons, Texmaco Rail and Engineering, Hindustan Engineering Industries, Commercial Engineer and Body Builders (now Jupiter Wagons), Oriental Foundry, Besco, and Modern Industries.
Modern Industries, initially contracted to supply 9,242 wagons for Rs 37.76 billion, faced challenges related to prolonged labour unrest that hindered production. Consequently, the order was downsized last month under force majeure conditions to 3,151 wagons amounting to Rs 12.87 billion, as per a Railway Board directive. The company has delivered only 71 wagons to date.
The railways intend to compensate for this shortfall by increasing orders with other wagon suppliers. For instance, in February this year, the procurement from Hindustan Engineering Industries was expanded by 343 wagons, bringing the total order with them to 7,506 units.
Force majeure, a contractual provision relieving parties from obligations due to unforeseen circumstances, was invoked by Modern Industries due to labour disruptions affecting production. Queries sent to Modern Industries by ET remained unanswered at the time of publication.
Officials emphasised that the financial adjustments due to the scaled-down order had no adverse impact on either party.
(Source: Economic Times)
Indian Railways
railways
wagon contract
Titagarh Wagons
Texmaco Rail
Hindustan Engineering Industries
Commercial Engineer
Jupiter Wagons
Oriental Foundry
Besco
Modern Industries
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