<center>
  <p><strong>Virtual Meeting</strong></p>
  </center><center>
  <p><strong>National Council on Railways</strong></p>
  </center><center>
  <p><strong>04:00 P.M. April 10, 2021</strong></p>
  </center>
 
  <center>
  <p><strong><u>Summary Record of discussions</u></strong></p>
  </center>
  <p style="text-align:justify;">A meeting of the National Council on Railways was held through virtual mode on 10th April 2021.</p>
  <p style="text-align:justify;">  Vivek Lohia, Chairman of the Councilwelcomed the members. He was joined by   Sanjeev Kumar, Co-Chairman, and   K N Ramesh, Co-Chairman of the Council.</p>
  <p style="text-align:justify;">Following is the gist of the discussions:</p>
  
  <p style="text-align:justify;">
  Railway development has laggedand hasnot seen any significant development for the past 15 to 20 years. Currently, the Indian railway is handling 30 per centof the overall freight business in India as comapred to 40-50 per cent in 1950. Thedeveloped world like USA &amp; China railway is handling 50 per cent of the freight&nbsp;business.</p>
  
  <p style="text-align:justify;">
  
  The augmentation of track capacity is far behind as compared to major global players in the railway sector becauseglobal players augmented track capacity substantially. In the passenger segment, in the first 20 to 30 years of independence, we were the leaders as compared to Asian neighbours. Thenour Asian neighbours lead efforts for modernization and resulted to provide far better amenities as compared to Indian Railways. Our Government has now realized that the corrective steps should be takenmuch faster. The initiatives should be in terms of privatization of rail cars and in freight sector allowing private sector participation for making freight business more inclusive.</p>
  
 
 
  <p style="text-align:justify;">Track infrastructure is critical for the growth of Railways. It is the backbone for Railways to develop, but there is a huge challenge from the EPC side. To expedite the projects, it must be done at a comprehensive level as has been done in the road projects.</p>

  <p style="text-align:justify;">
  National Rail Plan is key to progress and preparing a National Rail Plan is a humongous task. There have been ideas for creating innovation fundsas there is no right method to buy digital solutions of the innovation of digitization space. A separate innovation fund in Railways will bring key innovation which will help Railways in long term rather than procuring on L1 basis because that never brings innovation in the product.</p>
  <p style="text-align:justify;">Railways is now embarking on major developments like rolling stock, electrification of tracks, and modernization of stations. The work has been done with large developments. It is a huge opportunity for the Indian industry. There is a need to engage with Railways on a constant and regular basis and bring a major change with how the businesses are done.</p>
  <p style="text-align:justify;">
  The National Rail Plan is a vision document and for any organization to grow manifold, hence Railwaysmust work as per its vision document. The NRP is quite comprehensive and modern data built needs to be linked with National Infrastructure Pipeline.</p>
  <p style="text-align:justify;">The underline issue is the ease of doing business that the industry wants from the Government. The other concerning area is vendor management and there is a need to reassess the vendor management at the micro-level,the regional level, and central levelas it is a large gamut. There are too many vendors and confusingclassification which put many MSMEs out of business due tothe L1 concept.</p>
  <p style="text-align:justify;">The availability of funds and payment systems needs to be streamlined as many payments are still pending with authorities. It needs to be reassessed with Railway Board for concrete policies on the fast release of payments.</p>
  <p style="text-align:justify;">The Bank Guarantee management is a major issue&nbsp;for many members like EPC or Rolling Stock Suppliers as bank guarantee lying with Railways has no benefit to them. There must be understanding with Banks that bank guarantee should be automatically lapsed with the document returned or not.</p>
  <p style="text-align:justify;">The Procurement portal of Indian Railways i.e.,Indian Railway E-Procurement System (IREPS)has done a wonderful job with digitization instead of paperwork.The Government of India announced another platform for procurement through mega procurement portal i.e., Government E-Marketplace (GEM) but it has its limitations that commodities price is getting higher as there is no price variation clause in the Government E-Marketplace portal. If Railways want to migrate from Indian Railway E-Procurement System to Government E-Marketplace,this pricing clausemust be looked into.</p>
  
  <p style="text-align:justify;">RDSO functioning needs much more ease of doing business and requires a re-look into micro-level as it involves vendor approval system and other systems. On one hand, Indian Railways wants to modernizewith new technologies, and on the other hand, where there are less than 3 vendors, the approval fee is US$ 12000. On one hand,they are willing to provide green carpet for new technology and on another hand,they have put a restrictive fee for approval in the digital platform. So, there are dichotomies thatthe railwayhas to look into and remove anomalies. There must be a system where these things are looked into threadbare.&nbsp;</p>
  <p style="text-align:justify;">The Atma Nirbhar Bharat&nbsp;is an excellent initiative thatneeds to be implemented in letter and spirit by giving MSMEs a share like Japan and Korea developed Railways and other sectors. If such initiatives are taken up by Indian Railways, MSME will play an important role.</p>
  <p style="text-align:justify;">There is a disadvantage for manufacturers as the standards in India by Railways are not comparable with what is being used in the rest of the world.&nbsp; To develop a specific product only for India which cannot be used in other&nbsp;surrounding countries will not be viable from economies of scale point of view. So,to encourage Make in India, Railways should have the same standards as other manufacturers have for exporting to other countries. The Make in India policy is complex and in fact, Railways are not attempting 100 per cent procurement policy the way it should be. we are importing from China and other countries. There is a need to increase standards in the welding department and automatically increase in quality of products with safety.</p>
  <p style="text-align:justify;">Bid or contract documents are one-sided in some clauses, for example in DMRC it is based on FIDIC, but conditions are changed. There is a need to look into the document for fairness and equityfor both parties. As the steel prices are going up,there is a need for escalation formula for compensation of cost increased and client can have an actual change in prices and accordingly change the formula percentage to the extent contractors are compensated. It is a situation where the steel is increased by 23 per cent but the overall impact is 60 per cent.&nbsp; There is a need to draw a parallel between Road and Railway work.</p>
  <p style="text-align:justify;">The new product introduction is extremely difficult for MNCs in India.&nbsp; When the introduction of new technology comes in and is involved in the model of procurement with competition, the lower bidder is given preference, instead, there should be some recognition to new technology with the efficiency. Indian Railways do not provide life cycle cost as it is decided on tender based onthe lower bidder. RDSO and Indian Railways shouldrecognise the contributionofthe industry as it is bringing the latest technologies at the best price which involves engineering investments.</p>
  <p style="text-align:justify;">There is a need to encourage Indian industry and promote homegrown technology. RDSO should consider giving project-based development orders that are to be completed in a time-bound manner rather than supply-based development orders. Once a development order is given on a particular specification, Railway should be accepting it even if they have changed or revised the specification or the procurement criteria (e.g., bundling of various products under one specification by doing revision).</p>
  <p style="text-align:justify;">Railways should consider amending relevant ISO (International Organization for Standardization) document forthe CCA (Controller of Certifying Authorities) assessment. It should be done based onthe existing capability of the firm in terms of existing P&amp;M (Plant &amp; Machinery), existing Testing facilities, and existing required skill in the company and not to ask the company to invest beforehand for setting up of relevant Plant&amp; Machinery and Testing facility for doing CCA. These things are to be checked after the development of the product and not before. Because many a times development takes time and assets sit idle without any return which discourages for making a huge investment into the business.</p>
  <p style="text-align:justify;">Innovation fundsshould be made available for promoting indigenous technology that will be utilized as per ease of doing business. Railways are in a big way going for green technology by 2030. This will also help Make in India initiatives.</p>
  <p style="text-align:justify;">The council should identify themes to create linkage with defined priority areas of ASSOCHAM so that the Chamber&rsquo;s larger agenda is pushed forward throughout the year.</p>
  <p>The meeting ended with a Vote of Thanks to the Chair.</p>