Make In India Gets Metro Boost; Local Procurement Made Mandatory

Posted By: Religare
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With rapid expansion of metro rail projects in the country, Ministry of Urban Development has taken several far reaching decisions to promote Make in India campaign. These include stipulating certain mandatory conditions to be incorporated in tender documents of metro companies for procurement of metro cars and related critical equipment and sub-systems, procurement of only Made in India signaling equipment besides standardizing technical parameters for rolling stock (metro coaches) and signaling equipment.

Make In India Gets Metro Boost; Local Procurement Made Mandatory
The new mandatory Tender Conditions and standardized norms for a wide range of equipment, approved by the Minister of Urban Development M. Venkaiah Naidu have been circulated to all the metro companies on Friday this week making them effective immediately.

These initiatives will incentivize setting up manufacturing facilities in the country by increasing the volumes of procurement of rolling stock and all kinds of equipment by removing variations in the present technical norms for rolling stock and signaling equipment. This will in turn result in reduction of cost through economies of scale.

The ministry has stipulated mandatory conditions such as minimum 75 per cent of the tendered quantity of metro cars shall be manufactured indigenously with progressive indigenization of content, for which the contractor may either establish independent manufacturing facility in India or partner with Indian manufacturers, if the procurement is more than 100 cars.

In a bid to facilitate ease in maintenance through easy availability of spares beyond the warranty period, an identified list of critical equipment and sub-systems shall be included in the Tender Document for ensuring indigenous manufacturing of a minimum of 25 per cent of such equipment, either by original equipment manufacturers themselves by establishing a wholly owned subsidiary in India or through Indian manufacturers;

While the requirement of metro cars at State level shall be clubbed to enable applicability of local procurement norms, and to develop in-house expertise on long term basis, metro companies with large size fleet to undertake in-house maintenance.

A total number of 1,912 metro coaches are currently operational in the country with another 1,420 under procurement. Over the next three years more than 1,600 metro cars would be required. Each metro coach is estimated to cost about Rs 10 cr.

Further to these initiatives, Ministry of Urban Development will soon evolve common eligible criteria for suppliers of rolling stock and other equipment doing away with the present variations across different metro companies.

Presently, metros are operating in 7 cities of Delhi, Kolkata, Mumbai, Jaipur, Gurgaon, Bengaluru and Chennai with a total route length of 326 kms. Metro projects with a total route length of 546 kms are under construction in 11 cities and projects with a total route length of 903 kms in 13 cities are under consideration.

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