NEW DELHI: The Union Railway Minister, Mr Iaffer Sharif finally appears to having his way in awarding the controversial electric locomotive purchase contract to the Swedish-Swiss giant, Asea Brown-Boveri (ABB). After dithering for over a month in giving its approval the Finance Ministry despite its initial opposition to the deal has sent the contract for approval to the Prime Minister’s Office. In the second week of February the deal was cleared by the Committee of Secretaries.
What has made the contract Controversial is the keenness being attributed to the Union Railway Minister, Mr Jaffer Sharif in awarding the contract to ABB. The contract involves an outgo of foreign exchange worth Rx. 550 Crores in outright purchase of loos, “Indeed, at the outset, it seems that Mr Sharif has a lot of questions to answer to avoid uncharitable talk about the deal. It is not clear for example why the Railway Ministers office held on to the relevant file for nearly two months late August to Into October 1991 -solong.as the contract was not going to ABB but to the lowest bidder the a consortium of Bharat Heavy Electrical Lid (BHEL) and Ujtachi. It seems to make no financial sense that the Ministers office should have persisted in this inexplicable delay Despite the fact the India was losing US $4,000 per day as commit ment charges to the Asian Development Bank which had sanctioned US $190 million loan for the locomotive purchase see also Indian Express Feb.9, 1992.
The loan was sanctioned more than four years. ago when India decided to spit for high speed electric locomotives. AS the line capacity of the Indian Railways is limited the only two options before it were either to have more railway lines or have faster moving traffic. The latter option implied having Powerful engines. The two technologies opted for in this area were controlled 5,000 b. electric engines and the 6000 b, three-phase electric engines Eighteen of the former class o! engines are already in service in India International competitive bids for the latter class of engines were called in 1987 technical study carried out in 1988 and financial is opened in 1989, Thereafter two more financial tenders in 1990 and in June 1991 were called and BHEL Hitachi were found to be the lowest bidders. The Tender Committee, however, held that India should not purchase any electric Leit motives from abroad because of the high foreign ex. change cost involved.
Article extracted from this publication >> March 13, 1992
