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Govt relaxes wagon procurement policy -- Discrimination against new entrants goes

Hema Ramakrishnan

NEW DELHI, March 30

THE Railway Minister, Ms. Mamata Banerjee, has liberalised the wagon procurement policy by completely doing away with discrimination against new entrants. Orders valued at over Rs. 400 crores will be placed on wagon builders during fiscal 2000-01.

As per the new guidelines, 75 per cent of the total orders would be placed on all wagon builders, irrespective of whether they are or are not members of Wagon India Ltd (WIL). Procurement for the remaining 25 per cent would be done on the basis of compet itive bidding.

However, in the 75 per cent quota, preference would be accorded to public sector units (PSUs). The latter would be entitled to a share of 60 per cent, with the balance 40 per cent being apportioned amongst private sector wagon builders.

The new policy marks a significant shift from the earlier norms wherein the 75 per cent quota was earmarked only amongst members of Wagon India on the basis of a pre-determined formula.

Two new entrants to the industry _ who were not members of WIL _ maintained that the policy followed in 1999-2000 was `discriminatory' and moved a petition in the Delhi High Court. The High Court directed the Government to reconsider the matter and award the contract to eligible parties irrespective of the membership status in WIL.

Five public sector units _ including Bharat Wagon and Engineering Ltd, Burn Standard, Braithwaite, Jessops and Southern Structurals _ and four private sector units _ Texmaco, Cimmco Birla Ltd, Hindustan General Industries and Modern Industries _ are memb ers of WIL. The non-members include BESCO and Titagarh Wagons.

The Railway Ministry has followed the High Court's directive while formulating the new procurement policy. Interests of all wagon units _ most of whom are located in West Bengal _ have been taken into account in view of complaints of want of orders.

Senior officials pointed out that the commonly known `WIL' formula which forms the basis for allocation of the 75 per cent quota has also been altered this time round.

Parameters, including licensed capacity and production performance, were included in the original formula. Licensed capacity has been dispensed with in the revised formula.

During the current fiscal, the Railways would be procuring nearly 23,000-odd four-wheeler units (FWUs). This would also include hopper wagons for which orders have already been placed. Wagon builders would be supplying 22,250 odd FWUs, while another 2000 FWUs would be manufactured at the Railways' workshops.