Small rail-based transportation projects of 6-10 km stretches have started adopting a new project implementation strategy — contracting out all jobs to one vendor.
Big metro projects
For big Metro projects, multiple contracts are awarded for project execution. For instance, there are different contracts for rolling stock, signalling, electrical and systems integration.
Gurgaon’s Rapid Metro Rail, which is running a 5-km project, started this strategy in India, when it awarded multiple contracts to Siemens Transportation for a 10-year period.
The jobs included procurement of rolling stock, electrical and signalling systems, and integrating these to ensure they function as a total system and provide services. Rapid Metro Rail is following the same strategy for its 7-km expansion, another project awarded to Siemens Transportation.
City and Industrial Development Corporation of Maharashtra, which is implementing a 10-km stretch in Navi Mumbai, is also following a similar strategy. Bidders for this project include a consortium of L&T & Rotem, Hyundai and Thales.
Siemens feels this concept is slowly catching up in India, as Metro authorities are realising its benefits.
“This is evident from the fact that the Navi Mumbai Metro tender is being developed on similar lines,” according to Tilak Raj Seth, Executive Vice-President and Country Sector Lead, Infrastructure and Cities, Siemens Ltd.
But other equipment vendors in the Metro rail equipment segment — Alstom and Bombardier — point out that this mode of project implementation is yet to catch up in India. Delhi Metro, Chennai Metro and Bangalore Metro are being taken on turnkey project management contracts, where lesser number of functions are outsourced for a lower tenure of about five years.
Alstom Transportation’s Managing Director Bharat Salhotra said they were seeing the advent of turnkey contracts, but awarding all contracts to one vendor is yet to start in India.
Harsh Dhingra, Chief Country Representative, Bombardier Transportation-India, echoed the same and batted for turnkey project management contracts. In fact, most of the public procurement contracts were earlier based on item-rate basis, which were more like procuring further subsets of equipment and fixing them all together.
“Turnkey projects focus on optimisation of complete system rather than reducing cost over the lifecycle of the system. Shorter implementation time rather than item rate contract system and a more reliable project delivery schedule,” said Dhingra.
Suits smaller projects
Industry experts say having a single vendor to supply a “track-to-train” solution suits smaller projects well, as it also prevents developers from investing in specialised manpower to keep the complex Metro rail systems running. Moreover, the value of divided contracts for smaller projects may be quite low to get firms to evince interest.
Sanjiv Rai, Managing Director, Rapid Metro Gurgaon, said the firm has signed a 10-year agreement with Siemens “to work with our maintenance team, to maintain the system and do whatever is required to keep the system in running order.”