Bombardier queries rail order to Siemens

Firm says bidding for Mumbai project skewed.

Bombardier Transportation has questioned the Railways' decision to award the Rs 930-crore equipment contract for the World Bank-funded Mumbai Urban Transport Project (MUTP) to Siemens.

"Bombardier's bid at Rs 835 crore was about Rs 100 crore lower than that of Siemens," a Bombardier executive told Business Standard. He indicated that the company was planning to seek clarifications on the award.

According to World Bank specifications for projects funded by it, bidders can ask for written explanation for the basis on which a contract was awarded.

"We are aware of this option and will try whatever is permissible under the law to clarify the matter," the company source said.

The closely contested contract had three bidders, with Alstom being the highest. The contract involves purchase of 101 rakes of 9-car electric multiple units.

Siemens executives said the company's price bid was higher than that of Bombardier but added that the contract was awarded in fair manner keeping all specifications in mind.

Railway ministry officials also said the contract was awarded according to techno-economic considerations.

"Many technical aspects had to be considered too. A final decision was taken only after consultation with the World Bank," a ministry official said.

He added that in World Bank projects, the nodal government department was bound by the specifications laid down by the bank.

"Any kind of deviation could lead to cancellation of the loan itself. So, there is a slim chance of any malpractice," the official said.

The Rail component of the MUTP was conceived in 1994 in order to improve public transport system in Mumbai.

This involved capacity augmentation works, strengthening of infrastructure including Direct Current to Alternate Current conversion in Mumbai suburban sections that would improve carrying capacity.

Other measures included inducting more Electric Multiple Units for which rakes also needed to be procured.

In case of inducting more EMUs, about 190 rakes were to be procured. The order for 101 rakes was the largest one, with the earlier contracts for 89.5 rakes already been awarded. The total project cost was estimated at around Rs 1,100 crore.

Siemens already has a contract for providing 56.5 rakes and Alstom would be providing 12.5 rakes. Bhel has a contract for 20.5 rakes, which are under manufacturing.

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Off track

Bombardier's claim: Its bid at Rs 835 crore about Rs 100 crore lower than that of Siemens

Railways' rebuttal: Contract awarded according to techno-economic considerations and in consultations with the World Bank