The OEM vis-vis Third Party Maintenance Conundrum
On March 11, during a #Safety meeting at CRB, a #DRM raised concerns regarding the maintenance and staffing of power cars. This seemingly innocuous query, which posed the question of why a central tender should not be conducted for rate contracts if one needs to select one from a pool of three Original Equipment Manufacturer (#OEM), caused significant discomfort to the #CRB and the #MTRS.
Trigger were these:
April 8, 2025: “CRB-on-Contract – By the OEMs, of the OEMs and For the OEMs”
The present Principle Chief Mechanical Engineer (#PCME) of #NorthernRailway a seasoned Member of Khan Market Gang (#KMG) and All India Delhi Service (#AIDS), and a consummate Delhi type, swiftly intervened to alleviate the situation. He revealed the formation of a committee comprising representatives from PED/RDSO, CDE/RCF, and CESEs of Northern Railway, Southern Railway, and South Central Railway. This committee was tasked with resolving the issues within the next fortnight.
We collected source information and took assistance of a retired Board Member to analyse the issue.
Well, what is the issue?
LHB coaches are run using power cars or Head on Generation (#HOG) locomotives and #IndianRailways (IR) does not have self generation #LHB coaches. Integral Coach Factory (#ICF) coaches have been self generation types and have served well with #electric traction. It is a matter for some other time-why LHB coaches are not self generation types.
Traditionally the power cars were maintained departmentally and they were manned by staff of Train Lighting & Air Conditioning (TL&AC) staff.
In past five years there have been several #Policy changes. From #OEM only with caveats to OEM or authorised dealers to OEM only, policy has seen many flip-flops, each model had its share of stellar failures, like the fire in Ratlam Division:
Following are the policies which were issued on same matter in past five years, with three coming in just six months!
- RB ltr. no. 2006/Elect(G)/114/2 dt. 27.07.2020
- RB ltr. no. 2006/Elect(G)/138/1 pt dt. 11.01.2023
- RB ltr. no. 2006/Elect(G)/138/1 pt dt. 14.05.2024
- RB ltr. no. 2006/Elect(G)/138/1 pt dt. 16.07.2024
- RB ltr. no. 2006/Elect(G)/138/1 pt dt. 19.11.2024
In essence, there has been flip-flop from having permitted experienced agencies to only OEMs to do manning and maintenance. However, what also is revealed that the matter as straight as this needed as many as three revisions in just six months-which shows how fickle minded bosses are and how divorced are they from market realities.
Policy Flip-Flops Jack up the Rates
Most basic check of power car is called an A-Check—from few hundreds, the price after change of policy of this check shot up to five thousand rupees.
It indicates that this price increase is due to the policy change. Further, it is learnt that the committee which has been formed, as reported by #PCME/NR, will put a stamp on the OEM-only approach, with the #rate-contract being finalised by #RCF. It is widely believed that no officer will have the courage to write against a policy which came from the pen of the current MTRS and the current CRB himself.
More questions arise: it is widely known that any change made by railway board is always put on demands of zonal railways. It is well known fact that letters to this effect are called from zonal head quarters and then Railway Board ‘accepts’ the demands.
Aspects before the committee
It is important to understand the concept of #AMC and #OEM-only maintenance. Say you buy a bicycle from Hero Cycles and your brother owns a Hercules. Where would you go to get your bicycles serviced? Any avid biker knows that best gear shifts are not made by the bicycle manufacturers, they are also outsourced from third party experts. If you look in to any automobile, you would find suspensions, airconditioner, stereo, MPFI, valves, steering brake system, ignition system, alternators, batteries, seats, locks, windows, adhesives, sealants all made by third parties.
If you are a fleet owner, you use this information to your advantage. This what every organisation like #Armed Forces do, so that they do not have dependence on one large #vendor.
It is fact that giving #contract to OEMs or system integrator who supplied you final system makes life easy. That is what we do for our cars and motorbikes. But this comes at a serious cost.
It is beneficial to have both OEM and third-party maintenance providers available. OEM maintenance ensures access to specialised knowledge and original parts, while third-party maintenance can offer cost savings and broader service capabilities, especially for less critical equipment or after the warranty period.
OEM Maintenance:
- Pros: OEM maintenance offers the advantage of deep knowledge of the specific equipment, access to original parts, and potentially faster response times. This is particularly beneficial for critical equipment or when warranty coverage is still active.
- Cons: OEM maintenance can be more expensive and may have less flexibility in terms of contract terms and service levels.
TPM Maintenance:
- Pros: Third-Party Maintenance (#TPM) can offer cost savings, broader service capabilities (supporting multiple brands), and more flexible contracts. They may also offer services like asset management and lifecycle extensions and generate employment.
- Cons: TPM providers may not have the same level of specialised knowledge as OEMs and may not always have access to original parts. Due diligence is crucial when selecting a TPM provider.
So What Should Committee Be Looking At:
The optimal approach is often a combination of both. For critical equipment or when warranty coverage is still in effect, OEM maintenance is often preferred. For less critical assets or after the warranty period, third-party maintenance can provide a more cost-effective and flexible solution. What does the data say? If access of maintenance kits from OEMs is guaranteed, what is rocket science in repairs?
Engineering officers of Workshops, RDSO, and Railway Board are well-acquainted with the intricacies of diesel generators (#DG-sets). They are not easily deceived unless they deliberately attempt to be. A crucial aspect that must be ensured during the approval process of manufacturers is that they provide access to spare parts at competitive rates. Globally, there has been a consensus that for widely used items, access to spare parts and the dissemination of knowledge to third parties should be guaranteed. The sale of equipment should not result in binding the buyer into a disadvantageous situation. If the #engineers of the #IndianRailways fail to dismantle these monopolies, there is no justification for the existence of such a large number of engineering cadres.
Ep85: पॉलिसी करप्शन: जब गलती अपराध बन जाती है!
Just a policy has led to an increase in cost substantially. Even OEMs have jacked up the prices after publication of the policy. OEMs are not geared for such field support and forced to #sublet the work. Why should public money go to the OEM for #subletting the work as commission? The The #SECR case reveals the dark truth where the order was on OEM while work was done by subletting. Such practices violate various domestic and international laws and, at an appropriate time, it is learnt that otherwise competent maintainers who have been disqualified will approach such bodies highlighting #corrupt-practices.
Committee Members to Note
There is no justification that the railway ministry legitimises commissions to OEMs on recommendations of a committee. What is illegal and unethical will remain so regardless of any clever move made. The members of the committee must exercise caution, as their ability to obtain visas indefinitely may be compromised if the matter is brought to the attention of international watchdogs.
#Note: The author has used AI to do research of options and aspects.