PSUs have to compete in open market for railway contracts

The latest order released by the Ministry of Railways, withdrew the previous policy promulgated in the year 2019 by former Railway Minister Piyush Goyal which had mandated the first screen and awards the work to eligible PSUs.

New Delhi: In a changed policy, Railway Board has decided that Public Sector Undertakings (PSUs) will now have to compete with private firms in the open market to get rail contracts.

The latest order released by the Ministry of Railways, on Tuesday, withdrew the previous policy promulgated in the year 2019 by former Railway Minister Piyush Goyal which had mandated the first screen and awards the work to eligible PSUs. The winning PSU would then float tenders among contractors in the open market for work to be done.

"The policy approved by the Board, in their meeting held on 19.12.2019 to introduce competition amongst the PSUs for awarding Railway works, hereby stands withdrawn with immediate effect," the order stated.

The decision has been taken in order to get the benefit of the best price through competitive bidding.

The order said, "To further enhance benefit from competitive bidding, it has now been proposed to withdraw the policy for competition among eligible PSUs for allotment of work by Railway Board and the same shall now on be done through open tendering with immediate effect."

It further added, "Also, all such works awarded to PSUs under the existing scheme for which LOA (Letter of Award) has not been issued or MoU signed or no major contractual obligation undertaken in any form, will also stand cancelled with immediate effect."

Under the new policy, the contracts will be awarded to the one who wins the bid, either a PSU or a private firm.

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