TLI Staff
New Delhi: Private firms engaged in manufacturing of engineering items could grab a bigger piece of the rail PSU’s procurement pie.
As part of the government plan to cut imports of goods that could be produced locally, PSUs under the administrative control of Railways ministry have decided to substitute foreign vendors with local ones wherever possible.
In an event orgainsed by Engineering Export Promotion Council (EEPC), officials from Rail Wheel Factory (RWF) revealed their indigenisation plan. The PSU is working on strategy to substitute imports of various items such as pouring tube, veegum granuals and graphite mould blanks.
RWF procures materials worth about Rs 640 crore annually. The firms categorised as micro, small and medium enterprises (MSMEs) get preference in procurement as per existing guidelines. There are also various items which are reserved for firms registered as MSMEs.
Among other rail PSUs that have impressive capital investment plans are Central Organization for Modernisation of Workshops (COFMOW) and Chittaranjan Locomotive Works (CLW).
Indian Railways is estimated to procure materials worth Rs 16,000 crore over the next two years for electric locomotives alone. The national transporter has massive investment plans and offers huge business opportunity for local manufacturers.
COFMOW, tasked to modernise and upgrade railway production facilities, placed orders worth Rs 1,100 crore in FY20. Most rail PSUs have scaled up their capex in line with mega infrastructure building exercise envisioned by the government.
The MSME sector would get a big boost from the Atmanirbhar Bharat modernisation strategy in the Indian Railways, encouraging participation of the domestic vendors in its procurement, EEPC Vice Chairman Arun Garodia had said during the trade body’s Virtual Show for Sourcing Opportunities in the Indian Railways.
According to former EEPC India Chairman Rakesh Shah, Indian Railways has been among very few enterprises which uplifted the momentum of development even during the peak of pandemic times.
Further, he sees Railways’ current annual procurement worth Rs 70,000 crores from MSMEs growing 10 per cent over the coming years given the planned capex of the national transporter envisaged in National Rail Plan 2024.