17 March, 2018

Indian Railways to Implement Electronic Reverse Auction for All High Value Procurements of Goods, Services and Works

Indian Railways to Implement Electronic Reverse Auction for All High Value Procurements of Goods, Services and Works

Policy Decision to Improve Transparency and Competitive Bidding and Provide a Level Playing Field to the Industry

Even 10% Cost Savings with Improved Competition May Result in Overall Annual Saving Upto Rs. 10,000 Crores


Indian Railways as a major reforms initiative has decided to implement Electronic Reverse Auction for all High Value procurements. A policy decision to this effect has been taken to include supply of Goods, Services and also for Projects and Works. The Reverse Auction will be applied to all Zonal Railways, Production Units and by all Railway PSUs.

Implementation of Electronic Reverse Auction will improve Transparency and Competitive Bidding and provide a level playing field to the Industry engaged in supply of Goods, Services and Works. New Software is being developed by CRIS, Railways own IT Wing and is expected to be ready to be adopted soon.  Initially all Supply Tenders of over 10 crores each shall be covered through Electronic Reverse Auction. Similarly, all Services and Works above Rs. 50 crores each shall be covered through Electronic Reverse Auction.  This shall cover bulk of Goods Procurements value wise.

Indian Railways procures Goods worth Rs 50,000 crores annually, needed for Production and Maintenance of Rolling Stock and for operation of Passenger and Goods, Services and other safety related works.  In addition, Rs 10,000 crores worth of Track supply materials are procured. Projects and Works over Rs.one lakh crores are taken up for expansion of Railway infrastructure and upgradation.

Electronic Reverse Auction is expected to offer Industry greater ‘Ease of Doing Business’ as it will eliminate human intervention and will provide paperless transactions. Such electronic auction is expected to offer more competitive bids for Railways supply items and for Works.  Even a 10% saving in cost due to improved competition may result in overall annual saving of upto Rs. 10,000 crores for procurements of Goods, Services and Works.

 Reverse Auction software shall be easy to operate by all without charging any fee and with this, decision Making in high value purchase process will become digital and online.  Reverse Auction shall also cover the Government of India policy initiatives taken such as “Make in India Policy”, MSME Policy and will also permit New Vendors with capabilities to develop.