Titagarh Wagons expresses interest in operating private trains; tells govt to extend bid deadline

KEY HIGHLIGHTS

• Titagarh Wagons has requested Indian Railways to extend deadline for submitting initial bid citing lockdown issues.

• The leading wagons manufacturer endorsed the demand raised by prospective bidders on relaxing the net worth criteria.

• Nearly 16 companies including GMR Group, Sterlite Power, Bharat Forge, RITES and CAF had participated in the pre-application conference.

• The second pre-application conference is scheduled on August 12, 2020.

Wagons manufacturer Titagarh Wagons has urged Indian Railways to extend the deadline for submitting initial bid for the project. The company has said that not many firms would be able to bid for the project due to ongoing lockdown in major cities, which has restricted movement of executives for meetings and discussions.

"The deadline needs to be extended otherwise many firms may not be able to participate. In such a mammoth project, preparations take a lot of time. The current deadline is quite aggressive," Titagarh Wagons Vice Chairman and Managing Director Umesh Chowdhary told BusinessToday.In. As per the timelines given by Railways for train privatisation, the due date for submitting request for qualification (RFQ) is September 8, 2020. The names of shortlisted bidders are to be made public within 60 days of the application due date.

"This is a long-term project and 2-3 months in the life span of such projects are not very relevant," Chowdhary argued. Asked if he would be interested in operations of the train or supplying rolling stock, Chowdhary said that all options were open. He endorsed the demand raised by prospective bidders on relaxing the net worth criteria saying it would ensure wider participation in the tender process.

In the pre-bid meeting held last month, some prospective bidders argued that net worth criteria are generally lower in public private partnership (PPP) projects. As per the request for qualification (RFQ) document, a private entity participating in the tender for private trains should have a minimum net worth of Rs 1,165 crore (Cluster 1) which comes to 50% of the indicative project cost.

One of the bidders had suggested to reduce the minimum net worth requirement to 25% of the indicative project cost as it would encourage competition. The national transporter declined the request in its response to pre-application queries by the bidders. It also clarified that financial capacity (net worth requirement) needs to be fulfilled for each project on an individual basis and independent of the other RFQs.

Nearly 16 companies including GMR Group, Sterlite Power, Bharat Forge, RITES, CAF had participated in the pre-application conference on running private trains. Top business conglomerates Adani and Tata had earlier shown interest in the project but remained absent during the first pre-bid application conference. The second pre-application conference is scheduled on August 12.

The Indian Railways on July 1 invited global tender from private companies to run trains on 109 routes. The private trains are proposed to be run in 12 clusters across the railway network. Each train will have a minimum of 16 coaches. They will be designed to run at a speed of 160 kmph.