Indian Railways Cancels ₹30,000 Cr Tender for Vande Bharat Trains

According to reports, Indian Railways has canceled its ₹30,000-crore procurement for the construction and upkeep of 100 Vande Bharat trains with aluminum bodies. Alstom India was chosen as the winner of the tender, but it was canceled because the railroads thought the company’s bid was “too high.”

In a significant development, Indian Railways has annulled its ₹30,000 crore tender for the manufacturing and maintenance of 100 aluminium-bodied Vande Bharat trains. This decision, confirmed by Alstom India’s Managing Director, Olivier Loison, has raised questions about the future of India’s semi-high-speed train project.

Background of the Tender

The tender, floated in 2022, aimed to introduce advanced aluminium-bodied Vande Bharat trains to enhance speed, efficiency, and passenger comfort. Aluminium was chosen for its lighter weight and energy efficiency compared to traditional stainless steel. In June 2023, French multinational Alstom emerged as the lowest bidder, quoting ₹150.9 crore per train set.

Reasons for Cancellation

The primary reason for the tender’s cancellation was a pricing dispute. Indian Railways found Alstom’s bid of ₹150.9 crore per train set to be excessive and sought a reduction to ₹140 crore per unit. Alstom agreed to lower the price to ₹145 crore, but the negotiations did not meet the Railways’ expectations, leading to the tender’s annulment.

Additionally, the limited participation in the bidding process influenced the decision. Only two entities participated: Alstom and a consortium of Swiss company Stadler Rail with Hyderabad-based Medha Servo Drives. The Railways anticipated that re-tendering might attract more bidders, fostering competitive pricing.

Implications of the Decision

This cancellation marks the second unsuccessful attempt by Indian Railways to introduce aluminium-bodied trains. Sudhanshu Mani, the creator of the Vande Bharat train, expressed concerns that this decision could delay the project by several years and hinder the development of a local supply chain for such advanced trains.

Aluminium-bodied trains offer advantages such as reduced weight and improved energy efficiency over traditional stainless steel models. The setback may impact Indian Railways’ plans to modernize its fleet with these state-of-the-art trains.

Alstom’s Response

In response to the cancellation, an Alstom spokesperson stated that their offer was highly competitive and benchmarked against similar trains produced globally. They highlighted that manufacturing these state-of-the-art aluminium trains requires substantial initial investments in product design, especially as it would be the first such product for the Indian market.

Future Prospects

While the immediate plans for aluminium-bodied Vande Bharat trains face uncertainty, Indian Railways continues its efforts to expand and modernize its fleet. The organization may consider revising the tender specifications or exploring alternative avenues to achieve its modernization goals.

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