Rlys won’t relax criteria for Chinese cos in loco projects
Rajat Arora Posted online: Thursday, Oct 24, 2013 at
0000 hrs
Two Chinese companies, CSR Corporation and CNR Corp, had
applied for the Madhepura electric loco project (Rs 1,300 crore) and Marhowra diesel
locomotive project (Rs 1,200 crore) of Indian Railways, which are to be come up
through public-private partnership.
“The Chinese companies had written to us seeking relaxation
in conditions of RFQ as they did not have requisite qualification for the project,
but we have told them there won't be no relaxations as these conditions have
Cabinet approval,” Railway Board chairman Arunendra Kumar said.
CSR Corp had asked Railway Board to relax the condition of
experience of operations in three countries as it had experience of supplying
locomotives to just two. “We would have considered their request if there was
no response, but several multinational giants have applied for the project,”
Kumar said.
During the current visit of the Indian PM to China , the two
countries signed nine agreements, including on strengthening cooperation on
trans-border rivers and in road sector. China
has shown eagerness to invest in India 's railway sector and is keen
on fueling its high-speed railway network dream. However, the Railway Board has
refused to extend the olive branch to Chinese companies that want to invest in
the loco factory projects.
CSR, in a letter to the railway board, had complained about
"unnecessary conditions" in the RFQ. “It is unfair on us to be
prevented to participate in the project from the RFQ stage,” it said. The
letter had criticised the railway board's condition that a company applying for
the project should have worked in at least three countries in similar line of
operations.
But the railway board had denied any bias, saying the
condition was included to get the best of technology into India .
Printed from
Railways denies Chinese firms’ locomotive manufacturing
projects for non-compliance
Mahendra Singh, TNN | Oct 24, 2013, 03.35 AM IST
Two Chinese companies — CSR Corporation and CNR Corporation — had submitted bid for the Rs 1,300 crore electric locomotive project at Madhepura and Rs 1,200 crore diesel locomotive plant at Marhowra diesel locomotive project that are to be set up on public private partnership (PPP) model.
The firms, which were eyeing contracts valued at about Rs 35,000 crore over 10-11 years, had urged the Railway Board to relax the norms that stipulated the companies to have experience of operating in at least three countries. However, the Chinese companies have supplied locomotives to only two countries.
“We have told them (Chinese companies) that there would be no relaxation as the Cabinet has approved these conditions of the request for quotation (RFQ) in 2010,” Railway Board chairman Arunendra Kumar said.
He added, “Their request would have been considered if there was poor response, but several multinational companies have also shown interest. The response has been fairly good.”
The rejection comes at a time when Chinese companies created a flutter by bidding for a share of the Railways’ locomotive market, which is traditionally dominated by big-ticket American and European players. There was keen interest whether Chinese firms can make the technical grade to submit financial bids for the projects as that could have set the stage for more competitive bids.
Apart from the Chinese firms, the bidders for the proposed electric loco factory include
CSR, in a letter to the Railway Board, had said unnecessary conditions in RFQ were restricting the project from being uncompetitive.
“It is unfair for us to be prevented to participate in the project from the RFQ stage,” it says. The letter criticized the condition that a company applying for the project should have worked in at least three countries in similar line of operations.
However, Railway Board denied any bias, saying the condition was included to avail of the best of global technology.
Copyright © 2013 Bennett, Coleman & Co. Ltd. All rights
reserved. For reprint rights: Times Syndication Service
Chinese firms join race to supply locos to Railways
New Delhi , Oct. 6:
Chinese firms join race to supply locos to Railways
Bid for two
tenders worth Rs 35,000 crore over 11-year period
Two Chinese firms — CSR Corporation
and CNR Corporation — have created a flutter by bidding for a share of the
Indian Railways’ locomotive market.
Both these have bid for setting up
two locomotive factories — electric and diesel — in India to supply about 1,800
locomotives to the Railways over 11 years. These two tenders are valued at
about Rs 35,000 crore over a 10-11-year period, according to industry
estimates.
Now, all eyes are on whether the
Chinese firms qualify technically to submit financial bids for the project, as
that may set the stage for a more competitive price bids, say sector experts.
Traditionally, American and European
firms have been key suppliers of high-tech products in locomotives for the
Indian Railways. For the proposed electric locomotive factory to be set up at
Madhepura, Bihar , apart from the two Chinese
firms, bidders include American firm GE Global, and European firms Bombardier,
Siemens and Alstom. Similarly, for the diesel locomotive factory in Marhowra, Bihar , bidders include American firms GE, EMD, apart from
CSR and CNR.
Indian Railways is one of the
largest markets globally. For EMD, India
is one of the top markets after North America ,
William P Ainsworth, President and CEO, Electro-Motive Diesel and Progress Rail
Services, told Business Line.
“Traditionally, European firms have
been key suppliers in electric-traction-based rail technology while American
firms have had strength in diesel-traction.
“They developed such strength based
on the geographical requirement. Europe has a
high-speed passenger network, which runs on electric traction. The US, Canada have
large rail freight networks, used for heavy cargo movement that use diesel,”
said Niraj Kumar, former Director-General, Indian Railways.
That said, the Chinese firms have
also become large players by virtue of a large domestic market in China and are
looking for business in other markets. “The rail equipment localisation plan of
Chinese Railways was linked to the number of locomotives bought from the
Western loco suppliers,” said Kumar.
“CNR has 28 per cent share in
electric locomotive and 13 per cent in diesel locomotive globally, according to
data of German consulting firm SCI. We have supplied diesel locomotives to
countries such as New Zealand, Malaysia, Nigeria, Tanzania, Angola and Cuba,”
Yang Xiongjing, Division Chief-Comprehensive Department, CNR Import and Export
Corporation, told Business
Line.
Now, for the two loco factory
tenders, even though the Railways has not yet short-listed the firms, experts
agree that the Chinese participation will lead to strong pricing pressure.
“There will surely be greater
pricing competition if the Chinese firms were to participate. Though the
company that wins the project will have to operate in India with
Indian workers, the back-office costs of Chinese firms are bound to be lower,”
said Kumar.
mamuni.das@thehindu.co.in
(This
article was published on October 6, 2013)
Going beyond legalities it is a well known fact that Chinese locomotives are of inferior quality as is evident from the experience of Pakistan.obviously you get what you pay for and we Indians prefer cost over quality and are bound to suffer the fate of Pakistan if we go with Chinese. Also one has to factor in the strategic angle in case of a hostility between the two. Indian industry will gain nothing from it as the Chinese will import everything and merely assemble it here.
ReplyDeleteI don't agree that Chinese locomotives are inferior. The Pakistan tender process you mention was tainted by corruption with General Electric accused of illegality and impropriety. The strategic angle you mention equally applies to US locomotives. Plus GE would also effectively only assemble locomotives here.
ReplyDelete