TCS seen front-runner for $3.5-bn Britain's Network Rail contract

HCL, Wipro also likely to bid for UK's biggest IT tender

Indian majors are preparing to bid for the biggest ever information technology (IT) management contract in Britain, valued around $3.5 billion (nearly Rs 250 billion ).

A multi-year one, to be decided in 2019, it is to be floated by Network Rail, a state-owned entity which manages that country’s railway network. 

According to multiple sources, Tata Consultancy Services (TCS) has an edge over others — it has had a long relationship with Network Rail and has a large presence in Britain and the rest of Europe. The Mumbai-headquartered company has been working with Network Rail for five years, managing its IT infrastructure.

Noida-headquartered HCL Technologies and Bengaluru-based Wipro, both considered strong in infrastructure management services (IMS), are also likely to bid, the sources add. E-mails sent to all three companies were not answered. 

In 2013, TCS was among five vendors, including Cognizant and Accenture, to bag a contract from Network Rail for designing, building and managing its IT infrastructure. Though the deal size was not revealed, sources estimated it  around $400 million. 

Network Rail is owner and operator of Britain’s railway infrastructure — tracks, signals, tunnels, bridges, level crossings and stations, among others. “This (coming) contract is one of the biggest in IT outsourcing, at a time when deal values are increasingly become smaller,” said another source. 

TCS has been operating in European region for a little over 30 years; it has also invested heavily in this continent over the past decade or so. Currently, it is present in around 21 nations there, with at least 15,000 employees, including in Britain, France, Germany, Austria and Switzerland. 

Clients include ABN Amro, Bekaert, British Airways, BT, Europcar, Ferrari, ING, KLM, Nokia, OECD, and Societe Generale.

Over the past year, the company has won several multi-million dollar deals in America. In January this year, it won a deal worth $690 mn from M&G Prudential, the European business arm of Prudential, to digitally transform their businesses. In December last year, TCS renewed a $2.25-billion contract from UK-based television ratings measurement company Nielsen. 

And, in September last year, TCS subsidiary Diligenta clinched a $1-billion  contract from Scottish Widows, an arm of Lloyds Banking Group’s life and pensions business.

The growth momentum in Europe was also reflected in the company’s first quarter earnings this financial year, when UK and continental Europe showed 18 per cent growth in revenue, as compared to a seven per cent rise in North America.