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Rly contractors,IRCTC at loggerheads over tendering policy

Following a Supreme Court directive in its favour,the Indian Railway Catering and Tourism Corporation has decided to tender foodstalls and canteens across the country from November 1,2009.

Written by Kalpana Verma | Mumbai |
November 4, 2009 11:49:02 pm

Following a Supreme Court directive in its favour,the Indian Railway Catering and Tourism Corporation has decided to tender foodstalls and canteens across the country from November 1,2009. According to railway sources,the Corporation will make a whopping Rs 500 crore a year after implementing the tendering policy.

“Two months ago,the Supreme court had given a directive in favour of the IRCTC. The court observed that contractors should not be allowed in perpetuity. It asked the Corporation to uphold the tendering policy and allowed tender process from November 1,2009,” said Rakesh Tandon,managing director,IRCTC.

However,to mark their protest against the Corporation’s decision after the SC directive,contractors had shut stalls and canteens on the railway premises from October 29 to 31.

Suresh Gupta,president of All India Catering Contractors Association,said,“The case is pending before the full bench of the Supreme Court. The court has only lifted the stay. Social activist Medha Patkar had met Railway Minister Mamata Banerjee. She had assured that till the new policy come up,existing stalls of canteen owners should not be removed. Also we are waiting for final judgment.” “The Corporation awarded 80 per cent of tenders while the hearing was going on in the court. The IRCTC has given 100 stalls to a single party who is from outside Mumbai. It means that local people will not be given permission to run stalls.”

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On October 6,2004,the railway ministry rolled out a revised catering policy under which all catering contracts will be processed and awarded by the Indian Railway Catering and Tourism,an autonomous body. However,the revised policy shocked the contractor-politician nexus which always used to get their contracts renewed easily using their influence. The IRCTC was formed in 2000 to manage the catering operations of railways and it started functioning in 2002. On January 15,2002,the railway board amended its catering policy after which th IRCTC took over all its existing services from March 31,2002. However,following this private contractors had moved the Kerala High Court fearing that their contacts would be renewed for higher cost.

“Now,in Mumbai,the licence fee of a stall varies from Rs 50,000 to one lakh per year. A few years ago,the IRCTC got an annual revenue of Rs 71 lakh from 12 stalls at Agra railway station. There are 8,500 railway food stalls in India. Annually,the Corporation gets around Rs 6 lakh per stall. Existing contractors do not want the tendering process to be implemented. They run the stalls for very nominal rates. There are so many contractors who are rich. They rent out these stalls to others,” said a senior official of IRCTC.

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