RK Forgings emerges lowest bidder for supply of 16 lakh wheels for Indian Railways

New Delhi, India (Urban Transport News): To meet the requirement of forged wheels for the rolling stock, Indian Railways had floated a tender for setting up a manufacturing plant in the country with assured offtake of 80,000 wheels per annum for next 20 years so that the requirement is met from domestic sources. It is an important initiative in the direction Make in India Initiative for Import Substitution.

The bidding process was very transparent and competitive. Tender was opened on 24th Jan’23. Three Bids from following firms have been received from Steel Authority of India Ltd (SAIL), Bharat Forge, Pune, Ramakrishna Forgings, Kolkata. Price Bid opened on 14th March 2023.  L1 is from Ramakrishna Forgings Ltd., Kolkata.  L2 is from Bharat Forge Ltd, Pune, L3 is from SAIL.

Here is details of quoted price by each bidder:-

• Ramakrishna Forgings Ltd, Kolkata: Rs 1,88,100 per tonne (L1)
• Bharat Forge Ltd, Pune: Rs 2,75,000 per tonne (L2)
• Steel Authority of India Ltd: Rs 2,89,500 per tonne (L3)

The successful bidder to set up the manufacturing facility within 36 months from award date and to supply the wheels of various types @80,000 p.a. To consider the learning curve and economies of volume, the price applicable will be reduced by 2% every year upto 3 years and the 4th year onwards the applicable price will be 94% of the quoted price which is valid for the balance period of 20 years.  The pre-determined price variation clause is applicable for the price on quarterly basis.

Presently, SAIL is supplying at an average rate of Rs 1,87,000 per tonne.  Existing Domestic Capacity is SAIL - 40,000 wheels, RINL- 80,000 wheels (yet to start regular commercial production)- Total- 1,20,000.

Indian Railways has been importing various types of forged wheels required for locomotives and coaching stock (LHB) since 1960s from UK, Czech Republic, Brazil, Romani, Japan, China, Ukraine and Russia. In this year (2022-23), 80,000 wheels worth approx. Rs 520 Crore are imported from China & Russia, with remaining 40,000 being sourced from SAIL. Currently, due to Russia-Ukraine Crisis, all the import requirement of wheels is being met from China. Requirement of wheels is projected to increase upto 2 lac by 2026 onwards due to induction of more and more high speed trains.