Bid saves Metro blushes

An Indian public sector company has emerged as the lone bidder in "international competitive bidding" to find a replacement for the Spanish firm that was to build rakes for the East-West Metro.

By Sanjay Mandal
  • Published 23.09.15
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An Indian public sector company has emerged as the lone bidder in "international competitive bidding" to find a replacement for the Spanish firm that was to build rakes for the East-West Metro.

"No international company has shown interest in the project. When the tender was opened, the only offer was from BEML," a senior railway official told Metro.

Bangalore-based BEML Ltd, formerly Bharat Earth Movers Ltd, has manufactured rakes for the Delhi, Bangalore and Jaipur metros.

The technical bid for the contract to build 14 rakes, each with six coaches, was opened in end-August.

Officials of the railways and two train coach manufacturing companies said the project's history of hurdles - it is still mired in land tangles - was possibly one of the reasons why international firms didn't show any interest.

The contract for "design, manufacture, supply, testing, commissioning and integration of passenger rolling stock (electrical multiple units) and training of personnel" was put out to tender after Madrid-based Construcciones y Auxiliar de Ferrocarriles (CAF) opted out of the project because of its cost-escalation claim being rejected.

The contract, originally worth around Rs 770 crore, has yet to be revalued.

In 2009, three global companies, including CAF and the French multinational Alstom, had bid for the contract. CAF was the third company associated with the East-West Metro to make a cost-escalation claim on grounds of procedural hassles such as the government refusing to relocate settlers from construction sites.

Construction companies Gammon and Transtonnelstroy Afcons had filed similar cost-escalation claims. Gammon withdrew from a 365-metre stretch in Salt Lake's Duttabad because of the delay in shifting settlers. Afcons moved Calcutta High Court stating that it required land to start work.

"The East-West Metro project has been delayed by land-related problems for so long that we are apprehensive (of its future). Till date, there has not been much movement to suggest that these problems have been solved," said an official of a multinational rail transport infrastructure company.

He said any company would be reluctant to become associated with a project with an uncertain future.

The East-West Metro project has missed two deadlines already. The revised deadline for the first phase of the project, June 2018, has since been advanced to December 2017.

The second phase of the project - Sealdah to Howrah Maidan - has been stalled for more than two years and there is no indication yet of when work will begin. The good news is that the state government and the railways are working out a route realignment plan.

A senior official in a Metro coach manufacturing company said the order for 14 rakes may have been "too small" for a big company to take the risk of further delay and cost escalation. "The Delhi Metro contract was for 2,100 coaches. Compared to that, the East-West Metro needs only 84 coaches," he pointed out.

The East-West Metro would at first require 14 air-conditioned rakes with a combined capacity of 2,136 passengers. "We can manufacture the required number of trains within 18 months of the work order being issued," said Aniruddh Kumar, managing director (rail and metro business) at BEML.

He said the company had built around 1,250 coaches for the Delhi Metro Rail Corporation, some on its own and the rest in collaboration with a foreign company. BEML has also manufactured 150 coaches for the Bangalore Metro and another 40 for the Jaipur Metro.

Sources said the KMRC had informed its central funding agency about the tender attracting a lone bidder. The Japan International Cooperation Agency is to provide Rs 2,253 crore out of the budgeted Rs 4,875 crore for the project.

The other stalled Metro projects in Calcutta have struggled to retain or attract contractors. Larsen & Toubro withdrew from the Airport-Barasat Metro in 2012 because of the state government's failure to relocate settlers. Metro Railway hasn't floated a tender for the project in three years.

In 2014, the Noapara-Dakshineswar Metro got a new contractor whom the railways must pay Rs 130 crore extra because nobody else would touch a project being held hostage by illegal settlements.

Simplex Infrastructures Ltd bid for and bagged the contract in October 2014 on its own terms after the railways decided to get work started in sections where encroachment isn't a problem.