Indian Railways to float Rs 35,000 crore global wagons tender in the June quarter. The tender will be issued to procure 30,000 freight wagons every year over the upcoming three years at an estimated cost of more than Rs 35,000 crore.

Details of the bid are being finalised. The proposal will set a record for the railways, which has never acquired over 15,000 wagons in one year, providing a significant boost to domestic manufacturing of rail wagons.

Texmaco Rail and Engineering Ltd, Titagarh Wagons Ltd, Jindal Rail Infrastructure Ltd, and Jupiter Wagons are among the significant wagon producers in the nation. The government plans to revitalise production in a sector that has been grappling with low capacity usage due to muted demand from the railways. The large order size is in sync with expectations of a future demand drive from dedicated freight corridors and the requirement to make rakes available throughout the year for bulk freight consumers.

The stakeholder’s consultation for the wagon tender has been done and it may be released very soon, as early as late next month. The decision will give a huge fillip to the domestic wagon manufacturing industry and allow the railways to fulfil the increasing demand.

The industry had never provided over 15,000 wagons. It is a challenge for the industry as well. While the established capacity of the industry is approximately 30,000 wagons, it has never been tested. The industry is working at much lower capacities, and 2,500 wagons per month may not happen initially, though numbers will gradually increase, as per Texmaco Rail & Engineering managing director Ashish Kumar Gupta.

Railways would use the preferred reverse e-auction model for the freight wagon tender to enable the second-lowest bidder to obtain a portion of the bid if the lowest bidder is not able to serve the entire order. Besides meeting the future increase in demand, the order is also expected to decrease the cost of wagons by up to 20% as competition will drive down costs.

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Also read: Capex of Indian Railways to reach Rs.2.45 tn in FY 2022-23