Railways to revise Rs 31,000 cr wagon procurement plan

New Delhi: The Indian Railways has been forced to revise its ₹31,418 crore wagon procurement plan after one of the suppliers, Modern Industries, failed to fulfil the contracted order, said officials.

The Centre had placed orders for 79,800 wagons with seven suppliers in July 2022, in the largest such exercise by volume, aimed at supplementing the 300,000 existing wagons on the Indian Railways network.

Titagarh Wagons, Texmaco Rail and Engineering, Hindustan Engineering Industries, Commercial Engineer and Body Builders (now Jupiter Wagons), Oriental Foundry, Besco and Modern Industries were the successful bidders. The wagons - which are used for transporting crucial commodities such coal and iron ore on the rail network - were to be supplied at Rs 31.94-36.35 lakh per unit depending on the specifications issued by the railways.

The largest order was placed with Titagarh Wagons for 24,177 units, followed by Texmaco Rail and Engineering for 20,067 units.

Modern Industries was supposed to supply 9,242 wagons to the national transporter for ₹3,776.35 crore in July 2022, the officials said. However, they said, the order was scaled down to 3,151 wagons for ₹1,287.54 crore last month, with no financial repercussions on either side, under force majeure condition by a Railway Board order.

Force majeure - a contract clause that absolves a party of liability in case it is unable to fulfil the contract owing to unforeseeable events - was sought by Modern Industries due to a sustained labour unrest stunting production, according to the officials. The company has supplied 71 wagons to the railways so far, they said.

ET's queries emailed to Modern Industries did not elicit a response till press time.

"The orders placed with other wagon suppliers will be scaled up to meet the shortfall," said a senior railways ministry official, who did not wish to be identified.

In February this year, the railways decided to procure 343 more wagons from Hindustan Engineering Industries, taking the orders placed with the company to 7,506 units.