Procurement in Railways - Issues

Dear all:

Centralized or de-centralized procurement both have their pros and cons.

With this post, we would like to seek your inputs on the key issues you have observed/experienced related to Procurement in Railways. Share as much detail with us as you can. Only when we understand them well, we can do a detailed analysis of Root Causes and develop Solutions that are needed.

We look forward to your inputs!
Ministry of Railways more  

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From: To: Subject: New post "Procurement in Railways -..." in [Make Railways Better] Date: Thu, 2 Apr 2015 06:02:59 +0000 more  
The orders are supposed to be on L1 and L1's are always manipulated. Then again no payment is made as per order terms and here is the maximum corruption. No one is there to question why a payment is delayed. more  
Procurement should be at the discrimination of technical person, not at account persons. If the Engineer wants items from reputed firms such as L&T, Crompton, Usha, Finolex cables Mico accounts persons should not refuse, saying the materials are available elsewhere at a cheaper price. Let accounts decide reputed firms list and circulate to technical engineer. It is technical persons who implements projects but not accounts staff. Technical persons are responsible for any failure but not accounts. II. Keep the amount at the disposable of technical persons so they can procure and complete works at reasonable time. It is Engineers who runs Railways but not accounts or stores persons. Give total responsibility to Engineers and if any fraud is there punish them vigorously. more  
i am surprised by this question as this question arises in railway ministry /board because there are very less management employees are working at key post and also may be due to old mentality of railway working ( involve many employees for unnecessary works instead of the work for which they were recruited so that railway can show the need of more manpower requirement and so that they can justify the generation of new group A , B, C vacancies year by year by ignoring the huge spending on manpower). most of the decision makers are UPSE graduate engineers which are good only for technical work and not for management work so due to this fact it seems that they don’t know the importance of inventory management and cost cutting ( both by optimum utilization of it’s manpower and best cost quality inventory procurement without wasting it’s own manpower energy and time). My suggestion is railway should start management cadre for key post recruitment. I am also surprised by the opinion of E. Shreedharan ( who is also ex. Railway group A and knows very well how railway works and what are the loop holes in the system) on procurement issues which he mentioned in an article published in T.O.I. recently in this april 2015 month. if he knows the ground realities then why can’t he dare to tell/ suggest the nation and railway minister that railway’s main duty work is to run the train and to carry passengers and freight and railway must not involve it's staff in tendering & procurement work. It is a wastage of manpower and misuse of it’s costly employees. Instead of bringing the irregularities in inventory management in railway storages and illogical unnecessary procurement it seems that he is giving emphasis on decentralization. Which will make more and more employees involved in tendering work and will cause more misuse of manpower and also increase the corruption level because it will become difficult to track many small malpractices done by several employees in many small decentralized tender works. I feel Railway should establish a centralized online realtime inventory management room and should connect all the railway departments & it’s stores to this central inventory management room . railway officers who are accountable for inventory supply & maintenance work should register their inventory /good requirement with desirable specification (if possible) online on realtime basis and railway central inventory management team should take decision on realtime basis that which goods are to be procured and in what quantity . they should also take decision on specification of the goods/inventory based on the feedback received from RDSO and the concern official who has lodged requirement of a particular good/inventory. Only This much limited work is needed to be done by railway officials . this work will require hardly 10-15 people if done online and on realtime basis efficiently . then railway ministry should leave the further job for a separate railway procurement commission who will do the procurement job on behalf of railway it will bring accountability and transparency as all member of that panel will be accountable & will be remain under the strict vigilance supervision of many government agencies including cvc . this will save the cost and minimize the manpower requirement and bring the more transparency because all procurement will be done through a single channel which can be easily monitored . inventory cost cutting and efficient and quality procurement at rate contract or through other alternatives will be possible . industrial expert , specialist purchase officers , peoples representatives and vigilance officer should be the part of this commission. i personally feel involvement of railway employees either a railway board member or a phod or a babu in procurement work is a westage and misutilization of manpower of railway in decentralized or centralized procurement it encourage their wasted interest and cause damage to railway by all means ( revenue loss due to manpower misuse , loss due to lack of specialist working in tendering work , loss due to bad quality , loss due small and illogical procurement , loss due to malpractices and costlier procurement,etc.) for bringing railway in to profit , railway must stop further group A,B,C recruitment and must utilize it’s manpower effectively . If such improper utilization of manpower is restricted the railway can be run by only 7 Lakh employees instead of 14 lakh. Because after 7 th pay commission railway is bound to suffer due to it’s employee’s pay hikes and so proper man utilization is essential. One bad example of railway group A , B , C employee improper utilization is sending them on deputation in railways own PSUs and other departments in large quantity ? what is the logic behind it ? how railway can afford to send it’s own staff to other departments by ignoring the fact that such step creates artificial manpower crunch and so railway gets compel to recruit more employees every year . even railway & It’s PSU also gets suffer commercially due to such steps ( sending officers on deputation ) because railway psu needed to pays extra 10% DEPUTATION allowance to these deputation employees and needs to pay foreign service payment to parent cadre and can not work properly /efficiently due to these non management graduate employees. This must be stopped somewhere. more  
1. There is a high level of corruption in Railways. No payment will be released without a small cut. 2. There are cartels for some type of works especially those related to earth work track laying etc. If anyone outside the cartel gets he will not be allowed to execute the works. Works will be shared in rotation/based on values etc. 3. Personally experienced when in one of the divisions, we were not allowed to drop the tender. They would allow only if the rate was high. I don't know the present situation but still feel this is prevalent. 4. Increase transparency and e- tender system. more  
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