Indian state-run transporter Indian Railways (IR) will launch a scheme to procure steel rails for its projects through ‘reverse auction’, Jindal Steel and Power Limited (JSPL) managing director V R Sharma, said on May 4.
Mr. Sharma said that the company has been informed by IR that steel rail procurement will be launched in the current fiscal year through the reverse auction route.
JSPL along with state-run Steel Authority of India Limited (SAIL) are the only two domestic producers and suppliers of steel rails to IR.
According to Mr. Sharma, until recently SAIL had been the sole supplier of steel rails to IR but, with JSPL acquiring production and supply capabilities, the government decided to adopt the reverse auction route for its procurement policy.
Under reverse auction, unlike in a regular auction, suppliers start bidding from the ceiling and move down until the supplier agreeing to commit supplies at the lowest bid wins the contract.
Sharma said that IR had last year floated global tenders seeking to import steel rails for its project but, with the combined capacities of SAIL and JSPL available, there will not be any need for the transporter to resort to imports.