Sri Lanka awards USD58mn railway tender to only bidder

Nov 03, 2016 (LBO) – Sri Lanka’s cabinet nod has been given to award a tender to the only bidder who submitted a bid to supply six Diesel Multiple Units for the island’s railway system under an Indian credit line. A diesel multiple unit is a multiple-unit train powered by on-board diesel engines and it requires no separate locomotive, as the engines are incorporated into one or more of the carriages. As per a memorandum forwarded from the transport ministry to the cabinet, the unit FOB price for a DMU with air conditioned passenger compartment has been finally negotiated as 9.67 million US dollars. Each Diesel Multiple Unit contains 2 Diesel power coaches, 2 dummy trailer coaches, and 5 economy class, 2 business class and 2 air conditioned coaches. Cabinet appointed negotiating committee had initially sent the procurement notice to Indian High Commission and Sri Lanka mission in India. Under this credit line only Indian government certified manufacturers and suppliers had the opportunity to submit bids. Accordingly, in response to the notice, only one bid had been received from RITES Limited and opened on 18th May 2016. The project committee at that time had reported that there were non-complied commercial conditions and technical specifications in the above bid. Following negotiations of project committee and RITES Limited, an agreement had been reached regarding the revalidation of ISO certification of the manufacturer. The cabinet said the contract has been awarded subject to the revalidated ISO certificate of the manufacturer of the Diesel Multiple Unit (DMU). An agreement has also been reached regarding the way of controlling the galvanic corrosion, improving acceleration of DMU and the selection of traction motors and alternators within the restraints. As per the bidding conditions, the first DMU would be shipped within 14 months and the balance would be shipped within 22 months. A penalty of 250 US dollars per day for a Diesel power coach and 50 US dollars per day per coach for all other coach types would be charged for loss occurred during warranty period due to manufacturing defects, design faults and material failure. The project committee said the retention of 5 percent would be released only after the successful completion of warranty period. RITES Limited established in 1974 by the Indian government, is an engineering consultancy company specializing in the field of transport infrastructure. The company has supplied number of DMUs to Sri Lanka Railways in the past with defects identified in few units. Last month the cabinet also approved a proposal to procure 20 container carrier wagons and 30 fuel tank wagons to Sri Lanka Railways for 4.3 million US dollars. Texmaco Rail & Engineering limited of India will supply these wagons under the Indian credit line.