PMO to ‘intervene’ in Rs 1,500 cr signalling project as tender cost becomes a red flag

The project stems from an MoU signed between Railways and REL in June last year, and aims to overhaul India’s antiquated manual signalling system.

File image of an Indian train | Wikimedia Commons

New Delhi: The Prime Minister’s Office (PMO) is all set to intervene in a multi-crore pilot signalling project being pursued by railways’ PSU RailTel Enterprises (REL) following concerns over the tender costs, ThePrint has learnt. 

According to a highly placed official as well as an internal communication, the lowest bid received for the project is over two times the cost envisaged — Rs 3,496 crore against Rs 1,500 crore. 

RailTel is a wholly-owned subsidiary of RailTel Corporation of India Limited, a PSU under the Indian Railways. The project in question stems from a Memorandum of Understanding (MoU) signed between Railways and REL in June last year, and aims to overhaul India’s antiquated manual signalling system with advanced European technology.

REL, the official said, is set to close the tender for the European Train Control System Level 2 (ETCS L2) despite the availability of a cheaper alternative in the indigenous Train Collision Avoidance System (TCAS).

The PMO, the official added, will take up the matter at a meeting with Railways Minister Piyush Goyal Saturday. 

Reached for comment, representatives of the Indian Railways and REL both said the figure quoted for the lowest bid received was exaggerated. REL added that bids are still being evaluated, and financial terms and numbers are yet to be finalised.

PMO spokesperson Ravi Rama Krishna said he had no knowledge of the issue. 

What the project is about

In June 2019, the Ministry of Railways and REL signed an MoU for a Rs 1,500 crore pilot project aimed at employing ETCS L2 to modernise the signalling system on four sections covering a total of 640 km. 

The four sections chosen were a 165-km stretch on the Renigunta-Yerraguntla section of South Central Railway, 145 km on the Vizianagaram-Palasa section of East Coast Railway, 155 km on the Jhansi-Bina section of North Central Railway, and 175 km on Nagpur-Badnera section of Central Railway. 

The players known to have shown interest for the project are Bombardier, Alstom, Siemens and Thales. 

However, according to an internal communication accessed by ThePrint, the lowest bids for the four sections total Rs 3,496 crore — Rs 807 crore for the Renigunta-Yerraguntla section of South Central Railway, Rs 1,310 crore for the Vizianagaram-Palasa section of East Coast Railway, Rs 709 crore for the Jhansi-Bina section of North Central Railway, and Rs 670 crore for the Nagpur-Badnera section of Central Railway. 

According to the same document, the cost for a TCAS tender finalised by the South Central Railways in 2019 is Rs 283 crore for 1,199 km. 

“RailTel is set to close the tender at a cost of Rs 3,500 crore instead of Rs 1,500 crore, which what was approved by the ministry,” said the official cited above.

“They are pushing for the ETCS L2 even though the cost of TCAS (Train Collision Avoidance System — an indigenous technology for signal upgrade) is about 20 times lesser.” 

According to the official, the railways has “in its own documents said that TCAS has all essential features of ETCS L2, and TCAS is being upgraded to match the levels of best global signalling system”. “Yet, RailTel is pushing for ETCS L2…The matter will be taken up by the PMO,” the official said. 

When contacted by ThePrint for comment on RailTel finalising the tender at a higher price, Railways Ministry spokesperson D.J. Narain said, “The costs as being put in your question are highly exaggerated and incorrect… Story based on wrong facts is infructuous.” 

Asked if the lowest bid received by RailTel for the project is Rs 3,496 crore, he replied, “They are only bids after all! They are not approvals.” 

RailTel corporate communication executive Sucharita Pradhan said the same thing. “The figures are incorrect and grossly exaggerated. Any decision with regard to ETCS implementation will only be taken by the Ministry of Railways.”

When asked what the correct figures are, Pradhan said, “The tender is still under evaluation and financial terms and numbers are yet to be finalised. The conclusion that RailTel is giving the signalling job in Rs 3,500 crore is baseless. Further it is categorically stated that lowest bid received by RailTel as quoted by you is incorrect and highly exaggerated.”

‘Alien technology’

The RailTel pilot project for signalling system overhaul has also been under the lens in light of the Railways Ministry’s claim last month that it is looking to imbibe indigenous TCAS across India in line with PM Narendra Modi’s call for ‘Aatmanirbhar Bharat’, which seeks to reduce dependence on imports. 

Earlier, in 2018, Prime Minister Narendra Modi had reportedly cited the cost factor to turn down the railways’ plan to implement ETCS L2 technology across the network. 

The PM had also raised concerns about an “alien European technology” being implemented across the country without any testing in Indian conditions. He reportedly said that extensive trials in a section with heavy traffic density should be conducted first, and a call then be taken depending on their success.