Wagon cos see major Railways orders chugging their way soon

Suppliers to Indian Railways, who went through a long period of lean business, have a lot to look forward to in the next few quarters.

Railways is expected to place a significant portion of its ambitious procurement target set in the Union Budget over the next few months, said the head of country's largest wagon supplier group.

"The big opportunity that we are seeing in India is the enhanced wagon procurement target set in the Budget and hoping that the tenders would be floated over the next few months," Umesh Chowdhary, vice-chairman and managing director, Titagarh Wagons said.

This apart, orders for coaches from three to four metro projects across the country as well as the initial requirement for specialised wagons for the dedicated freight corridor are also expected to flow in the next two to three quarters.

"Work on eastern and western dedicated freight corridors is in full swing. Adequate number of rolling stock – 12,000 wagons, 5,160 coaches and approximately 700 locomotives are being procured during 2018-19," finance minister Arun Jaitley had said while delivering his Budget speech on February 1.

In January this year, the Indian Railways issued orders for about 9,500 wagons to the private sector players, with Titagarh group controlled by the Kolkata-based Chowdhury family, cornering orders for 2,338 wagons, or about 25% of the total order given out, as reported by DNA Money earlier.

With demand for wagons still being high, the orders for the coming year's requirement would also be given out soon, Chowdhary told analysts on Friday.

The next tender could, however, be invited under the reverse bidding process, he indicated.

"We are prepared for it as we have already won a contract under reverse bidding process from the private sector," Titagarh group head said.

Indian Railways has already started reserve bidding for some of its requirements, where bidders are allowed to see the lowest bid price and can put in their own price, which should be lower than that price.

In the current system of tendering for wagons, bidders have no idea about what prices others are quoting, which leads to unrealistic and uncompetitive pricing, sometimes through cartelisation.

"This year, we are also hoping that orders for wagons for the dedicated freight corridor would start flowing in the calendar year 2018. Another big opportunity that we would be targeting would be the metro coaches. This would be a paradigm shift for our business," Chowdhary said.

Dedicated freight corridor would be deploying specialised wagons like Roll-on Roll-off wagons that can carry two- or three-axle trucks or autocar wagons for transporting automobiles.

CHUGGING FAST

• Orders for coaches from metro projects, specialised wagons for the DFC expected to flow in the next 2-3 quarters
   
• With demand for wagons still being high, the orders for the coming year's requirement would also be given out soon