Procurement of 150 locomotives for Railways: serious questions arise over process transparency

Elements with vested interests are said to have jumped into the arena, as the government has reluctantly given a package of Rs10 billion to the ailing Pakistan Railways for purchase of locomotives.
On the request of Minister for Railways Ghulam Ahmad Bilour, the government has recently released Rs10 billion for purchase of 150 locomotives on urgent basis to run the dozens of passengers and goods trains, which have been taken off the track due to acute shortage of the locomotives.
However, transparency in the purchase of these locomotives from the international manufactures remains a perennial problem, as serious questions are being raised over transparency in the process of procurement.
Therefore, National Assembly Standing Committee on railways is going to meet today (Monday) to deliberate on procurement of 150 locomotives and details of terms and conditions set thereof, evaluation criteria and measures to ensure transparency, besides life cycle cost and calculation of the locomotives.
According to a senior PR official out of these 150 new locomotives, 75 locomotives of 3,000 HP would be used purely for freight trains while the remaining would be used for running the passenger trains. The ministry, after completing the technical evaluation of the interested foreign parties, would try its best to procure the locomotives within 18 months.
It is worth mentioning here that Pakistan Railways had issued a tender for the procurement of 150 locomotives in April 2010 but the matter was taken to the court, as there were serious procedural violations of Public Procurement Regulatory Authority (PPRA) rules 2004.
The superior courts had directed the Pakistan Railways to issue another international tender and invite quotations from all the locomotive manufactures without favouring anyone.
Sources told Business Recorder that Pakistan Railways re-issued the tender for purchase of 150 locomotives on August 2 and September 24, 2011 is the last date for submission of the quotations. Ten parties have so far taken the quotation papers to submit their offers. Sources alleged that last year, PR authorities had given such specifications of the locomotives which suited only General Electric USA. This time the specifications and stipulations for supply of locomotives have been designed in such a way that only suits EMD USA.
In a representation to Secretary Railways GE, USA said that "the revised loco specifications do not appear neutral and transparent. In fact, these changes clearly favour one specific manufacturer. This partiality contradicts the true directive of the court ruling." The major changes that look biased towards one specific manufacture includes: (1) AC/AC option in 2000 HP locomotive (2) Provision of radial bogies (copy of the letter is available with Business Recorder)
However, in a letter to the government of Pakistan, Electro-Motive Diesel Inc. (EMD) said: "We are the largest locomotive producer in the world. We are closely working with the Pakistan Railways on a modernisation project of 27 HGMU 3000 locomotives. EMD can supply locomotives with state of the art, environmentally friendly technology that will support Pakistan Railways' long term interests."
However, some senior retired Railways mechanical engineers and operating officers alleged that the tender specifications were in no way transparent and competitive.
They asked PR authorities to reply to a number of questions such as: 1. Why has a condition of supply experience of 500 locomotives has been imposed outside the home country, whereas in the past this was never included in the tender documents. 2. Why has AC/AC traction been required (never before utilised on PR) for 3000 HP locos, and then kept optional for 2000 HP locos? 3. Why has preference been given to Radial/Semi-radial bogies? 4. Why has the fuel tank capacity of 2000 HP loco been reduced drastically from 6500 to 5000 litres? 5. Why BI-IB type bogie allowed for 2000 HP locos when no such type of bogie has ever before been tried out on Pakistan Railways? 6. Why has EMD Diesel Engine Model 710 been shown as acceptable/approved when this model has never been used on Pakistan Railways tracks? The answers to all these questions, unfortunately, is that this was done to suit EMD USA, they alleged.
They argued that the tender conditions were not open for International Competitive Bidding (ICB) rather they look to be framed to favour only a particular bidder/manufacturer. Moreover, abrupt adoption of AC/AC traction and Electronic Fuel Injection (EFI) system on PR without limiting it for trial on few locomotives will lead to collapse of such locomotives within warranty period. Pakistan Railways has no back-up facilities to commission such a large number of locomotives and then to maintain those according to new technology of AC-AC Traction/EFI system. Back-up facilities are included as one of the tender requirements but such facilities cannot be created overnight and it takes years to nurture and adapt the maintenance staff.
The retired operating officers were also surprised to note that such a large number of locomotives were being procured without looking into the capacity/capability of PR and without keeping indigenisation of the locomotives. All the 150 locomotives are being procured in Completely Built Up (CBU) condition again for the sake of giving favour to some particular bidder/manufacturer and ignoring the facilities available with Pakistan Railways for local manufacture/assembly in Locomotives Factory Risalpur.
According to the details available with Business Recorder, Pakistan Railways have 195 engines out of order with break-up of 52 deleted, 126 ineffective, seven under repair and 12 dead while the PR has a total of 318 engines that are in operational condition. The PR has 515 total engines.