Railways tightens construction norms, raises eligibility threshold

The Railways Ministry has raised eligibility thresholds, tightened subcontracting norms, and introduced stricter checks to improve project execution and curb delays

In an effort to crack the whip on subpar performance by non-serious players, the Ministry of Railways has changed eligibility criteria for construction works it undertakes, Union Railways Minister Ashwini Vaishnaw said on Tuesday.

 

The threshold for assessing contractor capability through a single project has been increased from 35 per cent to 50 per cent of the project value. This ensures that only firms with proven capacity to execute large projects can bid for similar works.

 

“Additionally, at least 20 per cent of prior experience must be in railway-related work, recognising that different sectors such as highways, ports, and airports have distinct complexities,” Vaishnaw said.

 

 

He said that the ministry observed several players in the past got large contracts and then struggled to execute the projects – these companies were inexperienced in railway-related works. The minister cited the example of the dedicated freight corridors, which were completed with several delays.

 

In 2022, the Dedicated Freight Corridor Corporation of India (DFCCI) had served a termination notice on a Tata Projects-led consortium over delays in a stretch for the Western Corridor.

 

The DFCCI eventually decided to continue with the same executing agency and the stretch is likely to be completed soon – over three years later. Officials said that the railways would like to avoid situations like these with the new terms.

 

The ministry has also fixed bid security at 2 per cent of the project value, which is aimed at discouraging frivolous bids and ensuring only serious participants entered the tendering process.

 

Borrowing from successful best practices for Metro projects, Vaishnaw also introduced mandatory assessment of bid capacity for all projects above ~10 crore, and brought in strict punitive provisions banning corrupt, fraudulent, and anti-competitive practices.

 

Another change, part of a broader reform plan, mandated a detailed work road map before the start of any project, enabling improved monitoring and ensuring timely execution. Moreover, the ministry has also reduced the permissible subcontracting limit from 70 per cent to 40 per cent.

 

“Contractors will now have to directly execute at least 60 per cent of the work under their own supervision, which will ensure accountability and reduce the practice of passing on contracts after securing bids,” Vaishnaw said, adding that the ministry also enforced policies to address ultra-aggressive bidding.

 

The railways is also looking to increase its share in high-value automobile traffic from the existing 25 per cent, and has introduced a reform allowing special wagon designs while giving flexibility to the industry. Manufacturers can now design wagons based on specific origin-destination routes with high-capacity.

 

The ministry will also bring a flat-rate system and a specialised container policy for salt transportation to increase railways’ modal share.

 

Moreover, railways will now allow passengers to change their boarding station digitally up to 30 minutes before departure of the train from its origin station.

 

Earlier, passengers could change the boarding point only before chart preparation. Under the new provision, if a passenger is unable to board from the original station, they can select the next convenient station and board the train without losing their confirmed seat.

 

For passenger tickets, cancellation time windows of 48, 12, and 4 hours before departure have been revised to 72, 24, and 8 hours, aligned with the advance preparation of reservation charts, which now happens 9-18 hours before departure instead of 4 hours.