Trend of EPC tenders in Indian Railways – Its losses to Railways, contractors, and the country at large

The EPC system eliminates small & medium size contractors who have been working with the Railways for so many decades. They will be unemployed, and their future with their labourers and families will be totally in the dark!

A system of Engineering Procurement Contracts (EPC) Tenders has been approved by Railway Board to start this trend in Railways in the recent past. Its meaning is Railways will float a tender “mentioning its requirement only”. And the contractor has to survey the area, identify and calculate every item required for the execution of the work including the supply of those materials.

For EPC tenders, the Railway is also required to survey the volume of whole work including supply and execution items and quantities to arrive at the value of tender as per the market value or as per the Last Accepted Rates (LARs).

Earlier also the Railways were doing the same exercise for floating a tender, the only difference is that in the tender, the number of individual supply items and execution were mentioned and it was a very good & clear policy of getting work done by the Railways.

Earlier the area coverage i.e. number of stations was less and the value also. Now, more stations are covered under one EPC tender hence a very high Value.

Now under EPC the same work of survey, identification of items required, calculating the quantity of supply, and execution is repeated first by Railways as usual for preparing the tender and its value and again by the Bidder. Which is a total waste of time and money by the contractor.

Since, the value of EPC tenders is becoming very high, only a few big contractors at the national level will be or are eligible to participate in such EPC tenders of respected works i.e. OHE, Signaling, or Engineering.

Resulting in the elimination of small and medium size contractors in all the Zonal Railways situated in small towns and villages of the Railway Divisions and stopping their growth to increase their capacity and upgrade themselves with the new technology requirements of the Railways, i.e. for Engineering, Electricals & Signaling. Who have been working with the Railways for the last so many decades. They will be unemployed and their future with their labourers and family will be totally in the dark.

This policy is totally against the vision of Hon’ble Prime Minister Narendra Modi, who has a dream of strengthening every remote area, corner, and village of the country.

For the preparation of EPC tenders, a bidding contractor needs a very big team of engineers & professionals spending lakhs of rupees. Which is not possible for mid size contractors.

In EPC, the work goes to only one multinational/corporate or big party limiting competition. Whereas so many parties can be engaged, if the tender is made in parts and small parties also can participate. For a better target achievement.

In EPC tenders only corporate houses/ multinational companies governed by their executives, not by owners, are participating hence no actual competition is possible.

Even in the Zonal Railways, no experienced team of experts is available to handle EPC tenders. It has been observed that only the cut and paste system is going on while preparing the EPC tenders.

Many contractors and their associations requested to the Prime Minister and the Minister for Railways, please analyse once and look into the matter seriously.

#Published as received.

#EPC #Tender #IndianRailways #Contracts #Contractors