After the rejection of the initial tenders for the procurement of 170 coaches for the Railway Department due to the shortlisted companies’ inability to satisfy tender requirements, the Cabinet has granted approved to call fresh tenders to purchase coaches for the Railways Department, Secretary to Transport Ministry, Nihal Somaweera said.
The company initially selected for the tender had quoted a higher price than the second bidder on which grounds the second bidder appealed to the tender appeal commission and both tenders were subsequently rejected.
He said, “This went to the tender appeal board and the board wanted to cancel the tender offers. The Cabinet has now approved to restart the tender procedure.”
At the initial tender calling, two finalists, Texmaco Rail and Engineering Ltd of Kolkata and Rites Ltd of Gurgaon were selected and Texmaco Rail was unable to satisfy the prerequisite where the company had to show it had been in exporting business for at least five years.
This was due to the fact that the liberalization of the Indian market in the sector took place only around three years back.
Texmaco Rail’s effort to circumvent this shortcoming was to sign up with a second company that was in a position to satisfy the tender requirements. However, their bid was not selected despite offering less than half the prices than Rites Ltd as the board learnt that the joining up of the two companies were done subsequent to placing the tender and was not so mentioned in the tender documents.
“The funding for this project comes under the Indian Credit Line hence there are certain conditions that needs to be adhered to. The Indian Embassy has written to us that the second company doesn’t have sufficient experience in manufacturing of mainline carriages. They have done other things like tank wagons and other transport wagons. But not passenger transport,” he explained.
Asked whether there will be new conditions to the tenders after concurrence by the Indian Exim Bank, under the new credit line guidelines, he said the Ministry will have to develop the new tender conditions and submit it to the concurrence of the donor bank which is Indian EXIM bank,” he said. The companies to place bids were initially nominated through the Indian High Commission.