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Indian Railways will make online payments to its vendors within 30 days of receiving consignments and issue larger electrification tenders, railway minister Piyush Goyal said, adding these will bring down procurement costs of the national transporter.
“Soon, a time will come when nobody will come to Railways to get their payments. All payments will be online through RTGS (Real Time Gross Settlement) and I’m sure that it will reduce procurement costs by 10-15%,” Goyal said at the International Rail Conference and Exhibition organised by industry lobby group Confederation of Indian Industry (CII) in New Delhi.
Goyal, who took charge as railway minister on 3 September, said he was amazed to see Railways issuing tenders for electrifying distances as short as 30-40 km, a rate at which it will take years for Indian Railways to complete its electrification mission. “I have directed the electrification directorate to issue electrification tenders with minimum 500km of track length. This will ensure speedy electrification and cost reduction,” said Goyal.
The minister also said the three rail coach factories at Kapurthala, Chennai and Raebareli will expand capacities by 2019-20. These facilities now lie idle for 16 hours a day, and can be upgraded to raise production from the current 1,000 units per year to 5,000-6,000, he said.
The Railways is also looking to bring in global standards for railway equipment and technology, time-bound clearance of technologies by the Railways’ Research, Design and Standards Organisation (RDSO) to ensure faster technology adoption, and reduction in red-tape, Goyal said. The announcements drew mixed response from the companies linked to the railway sector.
Tilak R. Seth, executive vice-president of Siemens Ltd said, “The idea of larger electrification contracts is a good opportunity and we would be keen to be part of it.” Siemens currently provides electrification solutions for various metro rail networks in India, and is now eyeing the Indian Railways’ electrification contract. Two of its technologies are waiting for RDSO clearance for around a year.
The chief executive of a company providing equipment to Railways said, “There may be a lot of takeaways from the minister’s speech, but we need to wait and see if he is a man of words. His predecessors also made several announcements on reforms, but not much has been seen, be it ground or (at the) higher level.”
If the railways complies with international standards, a lot of smaller Indian companies would lose business as upgradation needs money and current economy does not allow big investments, he said, asking not to be identified.
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