Ashwini Vaishnaw launches Policy & Portal of e-auction for Commercial earning, Non-Fare Revenue (NFR) contracts

Indian Railways has taken steps to bring Commercial Earning and Non-Fare Revenue contracts under the ambit of electronic auction through Indian Railway e-Procurement System (IREPS), in line with prevailing e-auction of scrap sale. Shri Ashwini Vaishnaw launched e-auction for Commercial earning, Non-Fare Revenue (NFR) contracts in Rail Bhavan today. This will not only increase Railways earning but also bolster efforts being taken by the Government for ease of doing business.

Speaking on this occasion, Ashwini Vaishnaw said, “This policy is in line with the vision of Hon’ble Prime Minister to change the experience of common man by the use of technology. With this new policy, tedious process of tendering would get simplified. Also, it would give opportunities for youth to join the e-auction process. This policy enhances ease of living, promotes transparency and adds to Digital India initiatives in Railways.”

Earning Assets: Parcel Van, Pay & Use Toilets, Advertisement rights on station circulating area and coaches, AC waiting rooms, Cloak rooms, Parking lots, Plastic Bottle crushers, ATMs, Station co-branding, Video screens for content on demand etc. These assets will be mapped location-wise in the portal once, and the system will remember forever if it is covered for earning or not. This will improve monitoring of assets on real time basis and will minimize asset-idling.

Present System: Participation in present e-tendering requires physical registration with the concerned field unit. This makes difficult for potential bidders from the rest of India to compete. It takes time in finalization due to requirement of physical meeting of tender committee members.

E-Auction: Bidder located anywhere in India need to self register once for participating in auctions of any field unit of Indian Railways through the portal. Remotely bid can be placed for management rights of an asset after depositing earnest money (EMD) electronically. Successful bidder would be able to receive acceptance online and through e-mail in very short span of time. Except requirement of financial turnover, as such all the eligibility criterions have been removed. Further, financial requirement has been relaxed to the great extant. There is no financial turnover requirement for annual contracts upto Rs. 40 lacs

Pilot Run: Pilot was launched in 11 Divisions of 9 Zones: total 80 contracts of total value of 128 Crores were finalised during the pilot launch.

Success Stories during Pilot Run:

1. Ahmedabad Division had conducted e-Auction for 2 lots Gandhidham Junction & Himmatnagar (GIMB and HMT) of Parking on 04th June 2022. For Gandhidham Junction (GIMB) 24 bids were received with the highest one being ₹ 12,60,000 (Per Annum)  which is 38% above Conventional Bidding Price. For HMT 26 Bids  were received with the highest one being ₹ 62,500 (Per Annum) which is 72% above price of conventional bidding.
2. On 06.06.22, e-auction was conducted for Mixed Parking near Gorakhpur Airport, in which highest bid of Rs. 8,47,458 was received against estimate of Rs. 5,31,000 which is 59.60% higher than the price of conventional bidding.
3. Parking site – Anand Vihar Terminal, Contract Period – 3 year, Total Bids Received – 74,Offer Price per annum- 75 lakh. Total earning – Total 2.25 Cr. Offer received was 127.33% higher than the conventional bidding price.

Salient Features of New System:

• The Auction will be conducted online through ‘E-Auction Leasing’ module of IREPS: www.ireps.gov.in
• Policy for e-Auction and Standard Conditions of Auction issued by Railway Board:
  • Earlier system of physical registration of contractors Division-wise has been done away with,
  • Only financial criteria – based on self-declaration of past turnovers by contractors
  • Financial turnover criteria rationalized and standardized – No turnover requirement upto Rs. 40 lacs annual contract estimates
  • One time online self-registration of contractors
  • No geographical restrictions for participation in any auction of any Division
• All assets will be fed in the system for better monitoring and ensuring issuing contracts in advance – reduce asset idling
• Auction catalogues with all details of the assets will be published online on IREPS portal, minimum 15 days in advance
• Auctions will be conducted online- bidders will be able to participate from anywhere in India
• Minimum 30 minutes will be given for auction so that all interested contractors can submit their bids.
• Auction of consecutive Lots in any catalogue will be closed after gap of 10 minutes
• In case any bid is received within last 2 minutes of auction closing time, then the closing time for the lot will be extended automatically for 2 minutes. 10 such auto extensions will be permitted to ensure adequate time for all bidders to submit their bids.
• Reserve Price of the lots will not be disclosed and the bidders will be free to offer any bid according to true commercial potential of the assets as per their assessment.
• Bids will be auto decided.
• If Highest bid (H1) is equal or above the Reserve Price then the contract will be finalized on the same day after auction closing.
• Bid sheet and contract agreement will be signed digitally.
• Payment schedule for the contract will be generated immediately.
• All payments by the contractor will be made online
• Entire process will be online & paperless

Benefits:

1. Online mode makes potential bidders from distant location across country to participate in the bidding process.
2. Online payment to Railways post award of contract. Till now provision of daily manual payment in parcel leasing contract is there, which is a tedious process. Now it is made online.
3. Better Monitoring: After mapping, portal prompts when an earning contract of a particular asset is nearing completion and compels to start fresh auction, thus making idle time of the asset minimal.
4. Standardization of eligibility conditions pan-India.
5. Simplification of processes.
   1. Drastically reduces the time taken in finalization of Tenders and will prevent revenue loss on this account.
6. Quick re-award of contract in case of failure of any contractor
7. Breaks the cartel among bidders.  Bidders’ identity will be masked from each other and from IR.
8. Will increase revenue earning by fetching true commercial potential of assets due to higher competition amongst bidders.
9. Will minimize assets’ idling, resulting in maximization of potentials from the assets.
10. No eligibility criteria upto 40 lacs will help in promoting start-ups.