Indian Railways has cancelled its ₹30,000-crore tender with Alstom India for the production and maintenance of 100 Vande Bharat trains. The decision, confirmed by Alstom India’s Managing Director Olivier Loison, highlights the ongoing challenges in balancing cost and innovation within large-scale railway projects.
Alstom India, which was the lowest bidder, had proposed a cost of ₹150.9 crore per train set. However, the tender panel found this price too high and urged the company to lower the bid to ₹140 crore per train set. Despite Alstom India’s willingness to negotiate at ₹145 crore per train, the deal did not materialise. The other bidder, a consortium of Stadler Rail from Switzerland and Hyderabad-based Medha Servo Drives, had quoted ₹170 crore per train set.
This cancellation follows a previous contract awarded at ₹120 crore per rake for 200 Vande Bharat sleeper train sets. The decision underscores the importance of competition in securing the best price for such significant projects. According to officials, the next round of tenders will likely invite more participants, unlike the current tender, which only saw two contenders.
Eligibility criteria for the tender include having a research and development (R&D) facility capable of producing a prototype and the capacity to assemble at least five train sets annually. The winning bidder was set to receive ₹13,000 crore upon delivery of the train sets, with an additional ₹17,000 crore allocated for maintenance over 35 years.
Alstom spokesperson clarified, “Alstom’s offer for the 100 Aluminium EMU’s was a very competitive offer, and the lowest when benchmarked against similar trains produced globally. With a 220kmph design speed, the manufacturing of these state of the art aluminium trains requires substantial initial investments in the product design, being the first such product for the Indian market. It also involves the creation of a local supply chain and eco-system to make India completely self-reliant in the production of such trains in line with the ‘Atma Nirbhar Bharat’ vision.
While being the lowest bidder, Alstom worked on Indian Railways’ request to further optimise its offer. Alstom strongly believes that aluminium based trains will lead India into the future of efficient and sustainable rail mobility. With its strong local knowledge and its investments in industrial and human capital over the years, the company is well-positioned and committed to support the realisation of this vision. Alstom is already advanced in the development of this product for the Indian market which promises the nation a highly safe, comfortable, efficient and reliable passenger train and, looks forward to any new tenders that may come up in this space.”
The cancellation opens the door for broader competition in the next tender round, aiming to secure better pricing and terms for the manufacturing of these critical train sets. This move is seen as a strategic step to optimise costs while meeting the ambitious goals of modernising India’s railway infrastructure.
