Indian Railways is set to float a mega tender in Q1/FY23 to procure 30,000 freight wagons every year over the next three years at an estimated cost of more than Rs 35,000 crore. The details of the tender are being finalised.
The large order size is in sync with expectations of a future demand push from dedicated freight corridors and the need to make rakes available throughout the year for bulk freight consumers.
The stakeholder’s consultation for the wagon tender has been completed and it may be issued soon, as early as late next April 2022. The move will give a huge fillip to the domestic wagon manufacturing industry and allow the railways to meet the growing demand.
The Railways would use the preferred reverse e-auction model for the freight wagon tender to allow the second-lowest bidder to get a portion of the tender if the lowest bidder unable to serve the entire order.
Besides meeting future growth in demand, the order is also likely to reduce the cost of wagons by up to 20 percent as competition will drive down prices.
The carrying capacity of the Railways is set to almost double to more than 2,400 million tpa, with the construction of dedicated freight corridors. This will require the railways to augment wagon capacity to utilise the available infrastructure.
Also, the railways has set an internal target of enhancing its freight loading from less than four million tpa at present to over five million tonne. This will require need an additional 1,00,000 wagons, which the proposed tender targets to achieve over three years.
Moreover, depending on the progress of tenders in the initial year, the size of wagon procurement may be enhanced in subsequent years.
The Ministry also hopes that the size of the global tender would also encourage foreign investors to consider building wagon manufacturing facilities in the country, which will be a boost to the Make in India initiative.