Railways cancels ₹30,000 crore Vande Bharat tender as negotiations fail

Indian Railways cancels ₹30,000 crore tender for Vande Bharat trains, impacting plans for lightweight aluminium train sets.

The Indian Railways has cancelled a tender worth ₹30,000 crore given to French engineering company Alstom to manufacture and maintain 100 aluminium-bodied Vande Bharat train sets for the next 35 years. The tender was awarded more than a year ago.

Bids for the tender were called in June 2022 and were opened in February 2023. Only two bidders – Alstom India and a consortium of Swiss Company Stadler Rail and Hyderabad-based Medha Servo Drives – successfully submitted the bids. While Alstom quoted ₹150.9 crore per train, Medha had quoted ₹169 crore per train. 

“Alstom’s offer for the 100 Aluminium Electric Multiple Units (EMUs) was a very competitive offer and the lowest when benchmarked against similar trains produced globally,” an Alstom spokesperson told The Hindu in a written reply to questions. 

After the tender panel found Alstom’s offer to be steep, Indian Railways asked the company to reduce the offer to ₹140 crore, but the company asked the Railways to settle at ₹145 crore per train set. “While being the lowest bidder, Alstom worked on Indian Railways’ request to further optimise its offer… and looks forward to any new tenders that may come up in this space,” the spokesperson said.

At present, India uses steel-bodied train sets. Aluminium-bodied trains are better as they are lightweight, energy-efficient and have better resale value.

Sudhanshu Mani, former General Manager of Integral Coach Factory and creator of the Vande Bharat train, said this failed tender is the second unsuccessful attempt at initiating the manufacture of lightweight aluminium body trains. “The first attempt was made in 2017-18 when ICF floated a Train20 tender for manufacturing 20 such Vande Bharat train sets. But it did not materialise,” Mr. Mani said.

With design speed catering to 220 kilometres per hour, the manufacturing of these state-of-the-art aluminium trains requires substantial initial investment in the product design. If the tender had materialised, Alstom would have tied up with Indian companies to set up a plant to manufacture extrusions and profiles required to make the shell of the train bodies. A significantly large tender would have propelled companies to invest in the plant, as major components become indigenous, it would have paved way for making aluminium train sets cheaper in future, Mr. Mani said.