Launched an electronic auction module for rail asset contracts, to increase revenue and transparency

On Friday, June 24, Railway Minister Ashwini Vaishnaw launched an online auction for Commercial Revenue and Non-Tariff Revenue (NFR) contracts in Indian Railways.

The e-auction pilot was launched in 11 divisions in 9 zones. A total of 80 contracts worth a total of Rs 128 crore were finalized during the launch of the pilot.

“Electronic auctions will not only increase railway revenue, but also strengthen the government’s efforts to facilitate business,” the Ministry of Railways said.

Under the new system, railway assets such as vans, pay and use toilets, publicity rights on circulation areas and station coaches, air-conditioned waiting rooms, changing rooms, car parks , plastic bottle crushers, ticket vending machines, station co-branding, video screens for on-demand content etc., are included.

These assets will be mapped by location in the portal once, and the system will remember whether they are covered to win or not. This mechanism will improve real-time asset monitoring and minimize asset inactivity.

Participation in this electronic call for tenders requires physical registration with the management unit concerned. This process makes it difficult for potential bidders from the rest of India to compete. In addition, the finalization takes time due to the requirement for a physical meeting of the members of the tender committee.

The new system only includes financial criteria – based on entrepreneurs’ self-declaration of past turnovers and entrepreneurs’ unique online self-registration. Moreover, there is no financial turnover requirement for annual contracts up to Rs 40 lakh.

Additionally, there are no geographic restrictions imposed on participating in an auction of any division, requiring potential bidders from remote locations across the country to participate in the bidding process.

Standardization of eligibility requirements across India and simplification of processes with all payments moved online reduces time to finalize tenders. And the new system would break all existing bidder cartels, as the identity of bidders will be obscured from each other and from officials.