News Railways

TMH and RVNL asked to settle issue, ET Infra


Russia’s TMH and India’s Rail Vikas Nigam Limited (RVNL) have been asked to iron out their differences that threaten to disturb the plan for roll out of new variant Vande Bharat trains. According to a top government official aware of the development, the two have been asked to move ahead with contract signing for the sleeper design Vande Bharat trains tender in which the consortium was the lowest bidder.

“The issues between the companies will soon be resolved and contracts for making for trains will be signed,” the official told ET. People part of the negotiation process said that some positive signals are coming from the Indian Railways that is keen to award the contract at the price quoted by the TMH-RVNL consortium.

At ₹120 crore per train, the TMH-RVNL bid was significantly lower than that of competitors, including BHEL-Titagarh (₹139.8 crore), Bharat Earth Movers Ltd (BEML)-Siemens (₹145 crore), Alstom Transport (₹164.52 crore), and Medha Servo Drives-Stadler Rail (₹165 crore). TMH-RVNL had bid to supply 120 of the 200 trains on offer by the Indian Railways.

The contract is for supply of train sets by 2029, and maintenance over a 15-year period. Last month the BHEL-Titagarh consortium matched the bid price of TMH-RVNL and inked a contract with Indian Railways for manufacturing the remaining 80 Vande Bharat sleeper train sets.

Sergey Medvedev, head of business development in India, TMH Group, told ET in June that RVNL is seeking to renegotiate the original arrangement agreed upon by the parties. This according to him is a deviation from an ‘irrevocable contract’ that was signed between them.

Responding to a query on the same, the government official quoted above said, “Government companies do not breach contracts.” RVNL is a public sector undertaking company administered by the Ministry of Railways.

As on Monday, the Indian Railways has not signed the contract for the supply of trains with the TMH-RVNL consortium. “There are indications of a breakthrough this month,” said a person involved with the negotiations.

As per the memorandum of understanding, inked before the submission of bid, Metrowagonmash (MWM), a subsidiary of TMH Group, held 70% stake in the joint venture (JV), while Russian train control systems producer LES held 5%, and RVNL the balance 25%. But after winning the bid, RVNL said it wanted a 69% stake in the JV.

  • Published On Jul 18, 2023 at 08:05 AM IST

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