Pipavav Railway Corporation Ltd (PRCL) is under pressure from the railway ministry to abandon its selection of a Chinese company for supplying rails in favour of public sector Steel Authority of India (SAIL) which did not take part in the tender process.PRCL is a company floated by Gujarat Pipavav Port Ltd (GPPL) and the Railways through equal equity participation and is as such free of the ministry’s control. However, sources said the Railways is not allowing PRCL to go ahead with purchase of rails from the China-based Angang Group International Trade Corporation. “In his zeal to be looked upon as a public sector messiah, railway minister Nitish Kumar has given a commitment that the Railways will buy rails from SAIL’s Bhilai steel plant,” said a railway official. However, the Railways some times imports rails as SAIL is not able to meet all its requirements. When contacted, PRCL managing director RC Dubey has said the company board is yet to approve the contract and a meeting on the issue is expected shortly. The PRCL board has 10 directors from GPPL and five from the Railways. According to sources, the price being offered by SAIL works out to be about Rs 10 crore more than what is being offered by the Chinese company. The heavy industries ministry has written to the Railways that this is a deviation from the purchase preference policy followed for PSUs and, therefore, requires Cabinet clearance in consultation with the department of public enterprises. As per a policy guideline, PSUs are given a 10 per cent purchase preference in all government purchases. PRCL had even issued a letter of intent on May 10 to the Chinese company for supply of 35,000 million tonne of 52kg rails. Angang Group submitted a bank guarantee to PRCL after which a supply contract had to be placed with the company within seven days.The Chinese company had also made the required investment at its plant in China. A team from the Railways had even inspected the production facilities there and given the required clearance. The holding back of final order has delayed the port connectivity project which was expected to be completed earlier this year.
