Too Big to Fail ???
Failure to act on poor quality materials—threats of dominant vendor
Pressure to manufacture more locomotives creates urgency for faster approvals of the materials and this urgency suits those who want to manipulate
It is well known that several locomotive and coach suppliers of load bearing structures, quality of input material has been compromised
Big vendor, big orders, big supplies, does this mean that big mistakes are forgettable?
It’s well-known that reverse auctions (#RA), with their endless opportunities, can crash rates below the bill of materials cost without any safeguards. The #Stores department justifies this by arguing that, “if a #vendor wants to supply at a loss to gain market share why should the #buyer—Indian Railways—complain? After all—फायदा तो रेल का ही हुआ!” This article will establish that vendor will turn decent profit by compromising on raw material and processes.
#Ep204: बड़े बनते गए वेंडर और उनके सामने बौना पड़ता गया रेल सिस्टम! #CLW #BLW #PLW #IndianRailways
The vendor is required to only target the price band so that he can participate in reverse auction, there after it is his game.
It is well known that several #locomotive and #coach suppliers of load bearing structures, routinely and with impunity compromise quality of input material.
Question is how can a #manufacturer sustain below cost offers? Here the answer is deceptively and deviously simple—by routinely compromising on the quality of input raw material and prescribed process.
Compromise of Raw Material
Once steel plates are cut, welded and consumed checking their properties becomes difficult. Locomotive shells require specialised grades of steel to sustain the #traction forces needed to pull the train. And almost all steel plates look same until one applies spectroscope to it.
Hence, it is laid that while manufacturing the shell, the inspection has to be carried out at several stages. One stage is to check input raw material. Here the grades of steel are checked against invoices. The steel plates have heat numbers which become basis for checking. Since this is a paper based check, it becomes easiest to manipulate. Pressure to manufacture more locomotives creates urgency for faster approvals of the materials and this urgency suits those who want to manipulate.
In a recent case, a major vendor’s shell was rejected at Chittaranjan Locomotive Works (#CLW). On joint check with #vigilance and the #vendor, it was proven beyond doubt that used material was not as per specification. Compromising on quality of raw material is how the vendor sustains the low prices—while remaining profitable. This is how experts reveal that such vendors can become L-1 in reverse auctions.
Recently around 15-20 days back, CLW initiated a check of components supplied by a Kolkata based big vendor and which were found to be incorrect. This is happening continuously that this vendor is supplying materials of lower grade steel instead of special grade steel as specified by railways. Steel Materials specified shall be of anticorrosion grade for better life of locomotives.
Following is excerpt of the whistle blower input:
- The raw materials used were of normal steel instead of special grade steel.
- Internal vigilance and external vigilance agency was involved.
- The reports have been dumped and no action is being taken.
- Materials belong to mainly a Kolkata based big vendor.
- This is not the 1st case. Earlier a similar case was initiated by #PLW Vigilance in April 2025, where this big vendor’s Materials were rejected.
- In a 2nd case at #BLW, this big vendor’s Loco Shells were rejected due to abnormalities found of Raw Materials.
Compromise on Process
Another major aspect of cost cutting is compromising #fabrication process. This particular vendor/company was known to have saved on capital machinery under affectionate tutelage of then CLW vendor approval officers. When this was raised by many competitors, the firm was forced to buy this machine.
This firm’s rate of production was also under cloud. Once process is fixed, the output per manufacturing line is fixed—firm was manufacturing at much higher rate. The firm’s videos are available on YouTube where entire under frame is seen manually rotated, lying on shop floor, instead being done in synchronous manner on proper jigs.
As part of major anti-corruption story we had revealed how a vendor approving officer of CLW was running a factory in Howrah. After our report—link given below—the factory reportedly has been closed. This officer’s company and many others manufacture structural subassemblies and supply further, something which is not permissible.
Read: 24.04.2023: “अधिकारी-वेंडर-नेक्सस का नया स्वरूप-अधिकारी स्वयं बना वेंडर! भाग-2”
Also, there is repeated compromise on grade of electrodes, number of qualified welders. These are not easy to verify once work is done. To illustrate, if you need four welders to weld in certain pattern at certain speed, one can do entire work with just one welder in different pattern—this saves cost in a big way and cannot be easily detected once work is done.
Action Needed
Question is when such vendors become L-1 and take bulk orders, why no action is taken? A manufacturing slip can be condoned or punished with fine—but wholesale gaming of the system can only be punished by #blacklisting.
Quantity of every grade of steel used is well known. This can be tracked to the manufacturer with relative ease. It is important to ensure that items not permitted for outsourcing are strictly controlled. Similar check resulted on severe action on a #contact wire manufacturer. So precedence exists. CCTV footage needs to be obtained when work on key assemblies is done.
Shell defines life of a locomotive, such cost cutting practices which directly cheat Indian Railways is not possible without large scale collusion. It is well known that certain set of electrical officers at CLW, Railway Board and Railway Board Vigilance were part of this #racket in past. Now somehow the chain has broken—it is time that these are investigated to the very bottom of the case. Such vendors routinely threaten officers and supervisors.
Why action not taken?
Despite call from Hon’ble Prime Minister to improve quality, inspite of Railway Minister’s repeated exhortations, railway officers are not able to act on cases of poor quality materials. The most common reason is show of inability—हम क्या कर सकते हैं, प्रोडक्शन फिर कैसे होगा? Have these vendors become too big to fail?
#Note: We have not published name of the delinquent firm and photographs of failed material as vigilance enquiry is underway and we believe in giving fair chance to new officers of CLW and Board Vigilance. However, in case, if appropriate action is not taken, we would be constrained to publish unedited whistle blower inputs which have names of railway officials and company details. Failure to act on our earlier reports on how some electrical officers were acting as lobbying agents and doubling up as vendors is the main reason behind these rackets. This item of spurious quality is a major structural component of locomotive shell. It is instructive to note that the delinquent firm continues to be largest supplier of finished shells to all the factories of Indian Railways.
It has emerged that key to such vendor’s commercial success is use of scrap steel, low quality electrodes used by way side fabricators, unqualified welding process. Should such “scrap dealers” be allowed to masquerade as part one approved sources? Should such corrupt officers who supported them still be protected rather than be acted upon under 56-J?
Read: 22.04.2023: “कार्टेल विशेष के फेवर में लाई गई थी अंतरिम अप्रूव्ड कैटेगरी: खुल रही हैं बोर्ड विजिलेंस के संरक्षण में पलते भ्रष्टाचार की परतें!”