• PAGE ONE
• INDEX
• HOME

Limited rebidding for RailTel business plan

Hema Ramakrishnan

NEW DELHI, Sept. 18

THE Railway Board has given its nod for limited rebidding by the four consultants who had earlier been shortlisted to prepare a business plan and suggest a capital structure for RailTel Corporation. New guidelines have now been stipulated for combined ev aluation of technical and price bids.

The evaluation process -- wherein specific weights will be assigned to technical and price bids -- is likely to be completed by the month-end, sources said.

The decision to go in for limited rebidding has been justified on the grounds that there has been a change in the scope of work for the four bidders -- KPMG, Andersen Consulting, McKinsey and PricewaterhouseCoopers.

While inviting bids to prepare the business plan, the scope of the consultant's work included factoring in the possibility of divestment of the corporation's equity at a later stage. Bids were received by the Railways before the proposal to set up a Tele com Corporation was forwarded to the Union Cabinet.

However, the Union Cabinet, which subsequently gave its nod for the venture, stipulated that the corporation should be a 100 per cent subsidiary of the Railways.

Following this directive, the scope of work for the consultant -- which was earlier broad-based -- has now been altered. Suggestions have also been given to cap the price bid at the earlier L1 (lowest price) to ensure that the Railways does not end up fo rking out a larger amount as fees.

Earlier, there were differences of opinion within the task force appointed to shortlist the consultant on whether or not to take price bids as the sole criteria for evaluation.

An argument in favour of shortlisting purely on the basis of price bids was that the four consultants had, in any case, been chosen after 13 bidders made their presentations. Technical capabilities of each of these bidders were taken into account in the first round.

The other view point, however, was that the evaluation criteria for consultancy contracts cannot be the same as that adopted for procurement contracts.

In view of these differences, the task force -- which has representatives from the Railways and several key Ministries -- could not arrive at a consensus on the choice of the consultants. It submitted its report to the Railway Board recommending limited rebidding.