Govt may bring in reverse auction system for supplying rails to Railways

The government is likely to launch a 'reverse auction process' to supply rails for railway projects, JSPL Managing Director V R Sharma said.

After the launch of the process, a company that offers lower price can bag order of supplying rails to the Indian Railways, the industry executive said.

"Recently, we (were) apprised that Railways is going to launch a reverse auction process for supply of rails. We are waiting for the government to launch the scheme," he told PTI while replying to a question related to JSPL's rail business.

Jindal Steel and Power Ltd (JSPL) and state-owned SAIL are the only companies in India producing various grades of rails at their facilities at Raigarh and Bhilai, both located in Chhattisgarh.

Sharma said that earlier, there was only one supplier Steel Authority of India Ltd (SAIL) to railways. "Now, more players are there in the competition. That's why the Indian Railways is going to launch the reverse auction process."

In July 2018, JSPL announced bagging 20 per cent of the Rs 2,500-crore global tender by the Railways to supply long rails. Until then, according to a memorandum of understanding, the national transporter was procuring rails exclusively from government-owned SAIL.

Ever since its entry into the rail supply to railways, the company has till now supplied various grades of rails for a number of completed and ongoing projects.

Sharma further said both "SAIL and JSPL can fulfil the entire demand of Indian Railways. There is no point Indian Railways should import rails for their requirements".

While JSPL operates one million tonne per annum (MTPA) rail mill at its 3.6 MTPA integrated steel plant at Raigarh, SAIL has set up a new 1.2 MTPA universal rail mill at its plant in Bhilai, to produce different types of rails.