The Indian Railways has canceled a major contract to build 100 Vande Bharat trains, dealing a setback to the semi-high-speed train project. The contract was valued at ₹30,000 crore, and discussions had reached the final stage with the French company Alstom India. However, the deal fell through due to disagreements over pricing.
Vande Bharat trains have been successfully running in many parts of India, but the plan to expand these trains to long routes across the country has hit a major obstacle. The government aimed to build 100 Vande Bharat trains under this project, but the tender was canceled before completion, slowing down the project.
Issue Over ₹30,000 Crore Deal
The cancellation of the tender is a significant setback for the Vande Bharat project. Indian Railways had invited bids from several companies, and negotiations with Alstom India were in the final stage. However, the deal fell apart over financial disagreements, leading the Railways to withdraw the tender.
Alstom India’s Managing Director, Olivier Levasseur, explained that the issue was related to the cost of building the aluminum-bodied Vande Bharat trains. While they considered lowering the cost, the Railways decided to cancel the tender.
Negotiations Stalled
Railway officials said that the French side had demanded ₹150.9 crore per ton, which was too high. The Railways attempted to bring the cost down to ₹140 crore. Alstom eventually agreed to ₹145 crore per ton, promising to complete the 100 trains for ₹30,000 crore. However, the deal was still canceled.
Railway officials believe that canceling the tender will help them better determine the cost and give companies more time to refine their offers. Next time, they plan to involve more companies in the tender to increase competition and reduce costs. In this tender, only two bidders participated. The deal would have included ₹13,000 crore for the delivery of the trains and ₹17,000 crore for their maintenance over the next 35 years.