Rolling stock cos say deadline extension of Vande Bharat trains to help industry consolidate and plan investments

Vande Bharat express

The Indian Railways’ decision to extend the deadline for a tender that it released for 200 third-generation Vande Bharat trainsets is expected to help the industry form joint ventures and consortiums to increase competitive bidding for the order. Earlier this month, the Indian Railways extended the deadline for bid submission for key systems to October 10 from July 26.

Industry participants said that no domestic company has the capability to individually bid for and execute the Rs 26,000-crore order within the stated timeline for delivery of 82 months. Therefore, in order to execute the project on time, multiple players are expected to bid for the tender in a consortium or by forming joint ventures.

“Not only are companies expected to design and build the Vande Bharat trains but they are also expected to carry out upgrades at Marathwada Rail Coach Factory in Latur or the Integral Coach Factory (ICF) in Chennai, which will require an investment of close to Rs 1,000 crore,” a senior executive from a domestic rolling stock manufacturer said.

Another rolling stock manufacturer said that in the last few years many wagon builders have branched out, or plan to branch out, into coach-building and are eyeing a part of the Vande Bharat train project.

“Many smaller manufacturers are tying up resources to bid for a part of the Vande Bharat tender. These companies need time to evaluate and form consortiums to bid for the tender,” an executive from the second company said.

Sudhanshu Mani, former general manager of ICF and the chief architect of India’s first Vande Bharat project, also said that the preparation of bids for such a large contract takes time as apart from the technical evaluation and costing, many other commercials, contractual and legal aspects have to be studied and responded to in the bid.

“Six months to the opening from the date of announcement of tender is long but not unusual. It appears the deadline has been extended based on the request of some serious bidders,” Mani told Moneycontrol. 

Senior railway officials also told Moneycontrol that the deadline has been extended because industry stakeholders sought additional time to evaluate the project and prepare their bids.

At least 15 companies have approached Indian Railways to produce the third generation of Vande Bharat trains, including Alstom India, Medha Servo Drives, Siemens, Bharat Heavy Electricals, Titagarh Wagons, CAF, Crompton Greaves, Cummins India, ELGI Equipment, Jupiter Wagons, Texmaco, Saini Electrical and Engineering Works, CG Power Industrial Solutions, Hind Rectifier and Electrowaves Electronics.