The Hindu Business Line : Railways flags off e-procurement system

WITH an annual purchase Budget of about Rs 12,000 crore and another Rs 10,000 crore expenditure on planned works, the Railways has decided to take advantage of IT by launching a pilot project on e-procurement.

The Ministry of Railways has already approved the Rs 60-crore project and released Rs 4 crore this year for the pilot project, being implemented at Northern Railway.

"We have already short-listed the vendor. The announcement is likely to be made soon and e-procurement work will commence on Northern Railway. With companies paring off at least two per cent on their procurement costs through the electronic route, we feel that with an annual purchase Budget of Rs 12,000 crore, we will also make substantial savings," a senior Railway Board official told Business Line.

The IT vendor selected by the Railways will not only develop the application software to put in place an e-procurement system but provide hardware for the pilot project.

Depending on the success of the project, the concept would be subsequently extended to cover the entire Indian Railways network, he added.

"The Railways has been working on developing a robust e-procurement model since 2002. We studied different models being followed by State Governments and found that they are rather rudimentary. Ours will be an e-procurement model in the true sense of the term and not just putting our tenders on the Web."

The scope of work includes software customisation, reverse auction and related security features.

All tender documents will be uploaded on a secure and dedicated Web site of the Railways.

Then there would be bid submission, digitally signed to ensure integrity, authenticity and confidentiality.

There will also be a payment gateway for online transactions for bid money and security deposit.

"As against simply putting tender documents on the Internet by most State-owned entities, the Railways would carry out the entire procurement process online. These would also include digital signatures and digital notarisation," said Mr A.K. Goel, Chief Materials Manager, Northern Railway.

As per the proposed project, Northern Railway will start the e-procurement process covering submission of digitally signed bids from pre-approved vendors who are approved as manufacturers and suppliers for the Railways.

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Railways flags off e-procurement system