Railway Board deal to outsource EMUs to three 'sick' West Bengal firms sparks concern

Chennai:

Trade unions of Integral Coach Factory have questioned a deal by Railway Board in which 308 electrical multiple units are outsourced to three West Bengal based firms that lack adequate infrastructure and allegedly termed as “sick units” by the state government.

The three companies in question are Titagarh, Jessop and Co and Besco. Trade Unions allege that the contract has been awarded to these three firms which don’t have basic infrastructure and will be relying on the technical knowhow of railways.

Interestingly, what is irking more the employees is that ICF has to provide drawing and designs, which are the intellectual property rights of ICF free of cost to these firms who will then be selling the coaches back to railways at an additional cost of Rs 130 crore more than it takes to produce at ICF.

“This is even after free transfer of design and drawings and supply of certain raw materials like steel, wheel sets and electrical equipments to those firms,” the ICF Joint Action Council consisting of 11 unions claim.

S Anandraj, convenor of the council, said that, “The cost incurred to develop the present design and drawings at ICF is approximately Rs 1,500 crore. But it is now decided to do the transfer free of cost,”

Anandraj alleged that the actual process followed for floating the tenders in Railways is completely deviated and violated in awarding this particular contract. As per the deal Indian Railways also has to bear the higher cost due to the price variation clause (PVC). It is alleged the three firms stand to benefit if there is price variation on steel, electrical machinery, equipment and batteries.

As per the clause, railways has to bear the coast escalation during the purchase of steel machinery, electrical machinery, equipment and batteries and again has to pay the higher coast on the account of PVC to the companies.

Interestingly, Indian Railway requires 24,000 coaches in the next five years. This runs up to nearly 5,000 coaches a year. Interestingly, the maximum manufacturing capacity in ICF as well as Rail Coach Factory Kaputhala is around 3,200 coaches a year.

The union members feel that railways should have ICF could produce an additional 500 coaches each year if the government’s sanctioned amount of Rs 242 crore was released for ICF’s second unit. “they only released Rs 120 crore,” said Anandraj.

“The Rajya Sabha MP T K Rangaraj, who is a member of consultative committee on commerce and industry has also urged the CBI to look into the move by Railway Board to transfer design, drawings of ICF to private manufacturers have any mala-fide intentions and if so take appropriate actions on the concerned persons,” he said while sharing the letter with the reporters.

He said that the ICF Joint Action Council would launch a protest in the second week of June if the contract is not scrapped