This deliberate delay, undertaken solely to benefit one particular entity and its affiliates, is unparalleled and intolerable

An urgent appeal is made for the dismantling of alleged alliances hindering new entrants and ensuring justice prevails. This action is essential to promote competition, prevent artificially inflated prices, and eradicate practices that have allegedly hindered the market over the past decade

In relation to the #eligibility-conditions for #turnkey-contracts concerning the #furnishing of new coaches, it is abundantly evident that subsequent to their exposure for engaging in #criminal-collusion with a particular #firm to establish a monopolistic regime, the committee reluctantly revisited their recommendations and submitted the revised #recommendations to the competent authority two months prior.

However, driven by sheer avarice, the competent authority has negligently delayed action on the file for the past two months.

Concurrently, #tenders amounting to over thousands of Crores have been issued by all three Production Units (#PUs) for the ongoing year, perpetuating the same outdated #criteria that unfairly advantage a specific firm.

This deliberate delay, undertaken solely to benefit one particular entity and its affiliates, is unparalleled and intolerable.

It epitomizes the determination of one individual to favour a particular #private-vendor at the expense of substantial financial detriment to the Railway.

Notably, last year alone, in two #tenders issued by the Modern Coach Factory (#MCF) Raebareli alone, the #Railway incurred approximately Rs. 12 Crore in losses due to defective tailor-made #eligibility conditions tailored to accommodate a specific firm.

The Competent Authority – #MTRS – is evidently committed to ensuring the continuation of this deleterious strategy this year as well.

A Disturbing Case Illustrating the Ongoing Exclusion of New Entrants in Favor of a Handpicked existing Companies, Allegations of Policy Corruption, and a Call for Transparency- Urgent Demand for corrections

Ref- (i)  Board’s letter No Letter No. 2023/RS(G)/779/4(E 3423823) dated 19.06.2023 containing eligibility conditions for turnkey contracts for furnishing of coaches.

Ref- (ii) Railway Board’s letter No 2023/RS(G) /779/4(E3423823) Dated 19.09.2023 disallowing consortia/JV

To provide a comprehensive understanding of the matter, particularly regarding the implications and intentions behind the aforementioned two circulars, it is prudent to offer some contextual background. This background will be elucidated in the following paragraphs for clarity and proper assessment.
 
In the context of the #MCF, the responsibility for furnishing coaches is entrusted to private contractors through #Turnkey-Contracts. These #contracts are periodically released via #Tender processes, and the summarized #eligibility-criteria for these tenders are as follows:

It is undeniably evident from the preceding information that the eligibility criteria have undergone frequent and unjustified revisions in successive tenders, intentionally altering the requirements with the malevolent purpose of impeding the participation of new suppliers. In actuality, a specific entity, in collusion with its associated entities, has maintained uncontested dominance in this domain since the inception of MCF, resolutely barring the entry of any fresh competitors. Unfortunately, their reprehensible strategy has thus far met with success, facilitated by their illicit collaboration with certain individuals connected to both #MCF and the #RailwayBoard. Presented below are compelling and conspicuous pieces of #evidence that substantiate these illicit activities-

1. Under Tender No. 04221249, opened on March 16, 2023, a few new entrants met the stipulated eligibility criteria and became eligible to receive contracts. Allegedly, to thwart their entry, existing players, reportedly in #collusion with certain MCF & Railway Board officials, orchestrated a plan. The tender was abruptly cancelled after being pending for over 4 months, with the aim to oust the new entrants. Subsequently, two new tenders, (i) Tender No. 04231215 and (ii) Tender No. 04221249A, with estimated values of Rs 130 Crores and Rs 156 Crores, respectively, were issued and opened on September 26, 2023.
2. In these subsequent tenders, additional entry barriers were consciously introduced, allegedly with the intent of disqualifying the new entrants. Despite their prior eligibility, nullified by the previous tender’s cancellation, new entrants now face disqualification due to (i) an additional requirement mandating a 2-year performance evaluation (ii) Furthermore; few are also barred from consideration as consortia were expressly prohibited. These additional entry barriers were imposed by the #RailwayBoard vide letters dated 19.06.2023 and 19.09.2023 respectively referred above.
3. As regards additional entry barrier of 2 years #performance evaluation, it is mentioned that this new criterion, while seemingly introduced to monitor performance, lacks clear and measurable parameters and serves as a tool to prevent the entry of new suppliers. Notably, the coach furnishing process inherently encompasses subjective aspects, encompassing tactile sensations, aesthetics, and overall appearance, which inherently resist straightforward quantification and objective validation. It is imperative to underscore that all materials employed originate from #suppliers approved by the #Railways and undergo third-party inspections. Furthermore, #Railway-authorities diligently conduct comprehensive post-furnishing assessments. Therefore, the imposition of a two-year performance evaluation, given its intrinsically subjective nature, appears to serve as a thinly veiled pretext designed to shield entrenched market incumbents while simultaneously erecting a barrier against prospective newcomers.
4. One must ask whether the concerned officers at the Railway Board, responsible for introducing this new entry requirement, can indeed formulate and implement verifiable and quantifiable performance parameters, along with a subsequent monitoring mechanism, to evaluate the aspects of furnishing objectively. The answer to this query is self-evident; such a task is inherently unfeasible. However, they have ostensibly employed the guise of performance evaluation, under the guise of vibrant colours, to obstruct the entry of new suppliers for another two-year period.
5. On record, justification to incorporate additional #entry-barrier was given suggesting that past complaints regarding the quality of furnishing justified the necessity for performance evaluations. Assuming the veracity of such #complaints, it remains an indisputable fact that over the past decade, nearly 75% of #coach-furnishing-contracts has been awarded to a single entity or its affiliates. In light of this, one might reasonably expect that any lapses in #quality would have incurred penalties. However, rather than penalizing these parties, they have instead been afforded additional safeguards, seemingly tailored to obstruct the entry of new firms that could potentially introduce #competition in terms of #quality and #price, both. Does this rationale seem logically sound? It serves as a prime illustration of unwarranted and unjustified #favouritism extended to the existing #industry heavyweights.
6. Now reverting back to another new #directive to the issue of #consortium, it is stated that the alleged exclusion of #consortia, based on a rationale purportedly beyond #vendors’ control, exposes a coordinated effort with premeditated objectives. MCF allegedly sought guidance from the Railway Board on the acceptability of consortia, a move considered unprecedented and questionable.
7. In response, the Railway Board diligently sought specific information from MCF, which, regrettably, went unanswered. Subsequently, the Railway Board, in what appears to be undue haste, invoked the pretext of non-receipt of requested information from MCF to disqualify consortia. It is indeed a matter of incredulity that the decision of an apex authority to bar new entrants hinges not on the merits but rather on the non-receipt of information from a #subordinate body. The answer to this conundrum is manifestly clear. By no reasonable interpretation can such action be deemed justifiable. This gives rise to yet another pressing inquiry: “can bidders be subjected to punitive exclusion on account of the inaction or lapses of MCF?” These weighty questions demand thoughtful answers.
8. Moreover, denying consortium participation egregiously contravenes the stipulations enshrined in clause 2.3 of the General Condition of Contract (#GCC), a provision thoughtfully tailored for the realm of Railway tenders. It is imperative to underscore that clause 2.4, which mandates the explicit inclusion of information pertaining to the acceptability of consortia or #joint-ventures in the #bid-documentation, exclusively pertains to service contracts. Consequently, it remains extraneous to the present context, which is distinctly characterized as a #supply and #application-contract. In essence, the authority to either grant or deny the establishment of a joint venture or consortium finds its rightful place in the #domain of #service-contracts, and as such, it lacks applicability to a situation such as this, squarely falling within the purview of a supply and application contract.
9. Furthermore, instead of merely asking, “Why should consortiums be permitted?” it becomes our solemn duty to pose the more pertinent question, “What detrimental consequences arise from allowing them?” Regrettably, it appears that implicated Railway officials within MCF and the Railway Board may be serving as intermediaries for a select #coterie of established large #vendors who have maintained an unyielding grip on the market since the inception of MCF. These officials seemingly deliberately, sidestep this straightforward query and tenaciously labour to obstruct the entry of new suppliers through any conceivable means at their disposal. Else, there exists no reasonable #justification for the prohibition of consortiums, a stance that, in the final analysis, robs the railways of the attendant benefits stemming from heightened competitiveness.
10. It is worthy of recognition that consortia, particularly in the context of high-value composite and hybrid tenders such as the present, manifest exceptional suitability, affording the opportunity for two or more entities to combine their resources throughout the #development and #delivery phases. This collaborative approach inherently fosters economies of scale, enhances operational efficiency, and augments overall effectiveness. Importantly, it demands emphasis that consortia are unequivocally committed to full compliance with the eligibility criteria delineated within the tender, without any request for waivers or concessions in this regard. Consequently, the decision to disallow their #participation lacks legitimate #administrative justification or expediency, appearing to be primarily motivated by an illicit intent to confer unrestricted and unchallenged dominance upon existing suppliers, thereby impeding the entry of new entities into the marketplace.
11. Another facet of this issue necessitates careful consideration. These firms have devoted substantial resources to successfully deliver 25 AC coaches, thereby satisfying the prerequisites for regular order placement. However, the subsequent #modification of eligibility criteria, introducing an additional entry barrier in the form of a two-year performance criterion, effectively renders them ineligible for regular orders, subjecting them to an unwarranted demotion tantamount to punitive action for purported misconduct. Consequently, these alterations carry retrospective implications, unfairly penalizing these firms, notwithstanding the absence of explicit stipulations regarding retrospective applicability in Railway Board Letter No. 2023/RS(G)/779/4(E 3423823) dated 19.06.2023.

Here is another glaring and undeniable instance of unjustified favoritism. As outlined in the eligibility requirements set forth in Tender No. 04221249, which was unveiled on March 16, 2023, it is explicitly mandated that a #bidder must have supplied a minimum of 25 Coaches within the preceding three years under a “single awarded contract” in order to qualify for regular bulk orders. However, it is with profound astonishment to observe the unexplained grant of eligibility for regular orders to M/s Tata Steel, despite their conspicuous failure to meet the specified threshold of 25 coaches under a single awarded contract. This situation presents a glaring and self-evident case, apparent even to the most casual observer. Such a #patent miscarriage of justice and concurrent discriminatory behavior has been made possible due to the presence of two significant factors:

• Firstly, the influence exerted by a former Member of the Railway Board, acting as an intermediary on behalf of M/s Tata Steel.
• Secondly, allegations of substantial bribes paid to the former #PCMM and #PCME.

Given the #gravity of the above stated #allegation and the compelling #evidence at hand, it is requested that matter to be expeditiously referred to the Central Bureau of Investigation (#CBI) for a thorough and impartial inquiry.

In view of the aforementioned circumstances, an urgent appeal is made for the dismantling of alleged alliances hindering new entrants and ensuring justice prevails. This action is essential to promote #competition, prevent artificially inflated prices, and eradicate practices of #corruption that have allegedly hindered the market over the past decade.

Relief sought

• The additional entry requirement of a two-year performance evaluation laid down in Board’s letter dated 19.06.2023 should be withdrawn immediately, Or
• Alternatively atleast, it should not be applied to those firms, who had already qualified for regular order by furnishing the specified minimum 25 Coaches prior to issuance of the aforesaid letter. To put it differently, retroactively applying this requirement should be avoided.
• Participation by consortiums should be allowed.