Indian Railways Cancels ₹30,000 Crore Tender for 100 Vande Bharat Trains Awarded to Alstom India Due to High Costs

New Delhi, August 13, 2024 – Indian Railways has announced the cancellation of a ₹30,000 crore tender awarded to Alstom India for the procurement of 100 Vande Bharat trains. The decision to cancel the tender was reportedly due to the high pricing proposed by the French multinational's Indian subsidiary, Alstom India.

The tender was initially part of the government’s ambitious plan to expand the fleet of Vande Bharat Express trains, which are India's first semi-high-speed trains designed and manufactured domestically. The expansion aimed to enhance the country’s rail infrastructure, offering faster and more efficient travel options for passengers across various regions.

However, according to sources within the Ministry of Railways, the bid submitted by Alstom India was considered exorbitant, leading to concerns over the financial feasibility of the project. The ministry had set a budget for the procurement, and Alstom's quote significantly exceeded this threshold, making it untenable for the government to proceed.

The decision to cancel the tender has prompted Indian Railways to reevaluate its strategy for procuring the new fleet of Vande Bharat trains. While the cancellation is a setback, it is also seen as a measure to ensure that the project remains financially viable without compromising on quality and safety standards.

A senior official from Indian Railways stated, “We are committed to delivering world-class rail services to our passengers. However, it is crucial that we do so within a sustainable budget. We will now explore alternative options, including potentially re-tendering the project or negotiating more competitive terms.”

For Alstom India, the cancellation of this tender represents a significant loss, given the size of the contract and the strategic importance of the Vande Bharat project. The company, which has been a key player in India’s rail sector, had been expected to play a major role in the country’s push towards modernizing its railway infrastructure.

Alstom India had previously delivered rolling stock and signaling systems for various projects in the country and was seen as a frontrunner for this contract. The cancellation may affect the company's future business prospects in India, especially in the context of high-value government contracts.

Indian Railways has emphasized that the cancellation of this tender does not indicate a slowdown in the Vande Bharat project. The government remains committed to expanding the fleet, albeit through more cost-effective means. It is expected that a new tender process will be initiated shortly, with the hope of attracting bids that align more closely with the government’s budgetary expectations.

The Vande Bharat Express trains have been a significant milestone in India's rail modernization efforts, offering faster travel times, enhanced passenger comfort, and a showcase of the country’s engineering capabilities. As Indian Railways moves forward with its plans, all eyes will be on how the project evolves in the coming months.

The cancellation of the ₹30,000 crore tender to Alstom India underscores the complexities involved in large-scale infrastructure projects, where financial prudence is as critical as technological innovation. As the government navigates this challenge, the focus will remain on delivering high-quality, affordable rail services to the Indian public.

By: Ritesh Sahu

Published on: August 13, 2024