There have been repeated changes in the SPV structure for manufacture of Vande Bharat sleeper trains by the Russian joint venture partners thereby leading to a revised proposal being submitted in July 2024 only, senior Railway officials told businessline.
“Thus, there has been substantial delay in the finalisation of the structure of SPV by Kinet because of the discussions within the joint venture partners,” they said.
Whiledenying that there was any loss to the CPSE, RVNL, because of the delay in project execution, officials said the technology partners were reluctant to opt for changes in the contract. Hence, the Railways decided to stick to the originally decided upon 120 trainset with 16 coach configuration.
The first prototype train by Kinet (Russian JV with RVNL) is likely to be manufactured by June 2026.
“It is incorrect to say that RNVL has suffered a loss of ₹76 crore as firstly as RVNL has themselves said that it is notional as manufacturing is still to start and secondly as the share holding pattern is on account of SPV,” the official explained.
Repeated Changes in SPV
Officials said the bank guarantee was submitted by the firm (Kinet Railway Solutions) on August 28, 2023 because of the delay in formation of SPV and shareholding of the respective firms. The consortium was accordingly asked to also deposit liquidated damages for the delay.
The contract was finally signed in September 2023.
Thereafter in Oct 2023, the firm requested for change in shareholding pattern of SPV from existing to JSC Metrowagonmash (26 per cent), LES (49 per cent) and RVNL (25 per cent). In January 2024 the firm again submitted a revised proposal in July 2024 for change in share holding pattern to 35 per cent JSC Metrowagonmash (as lead partner), 40 per cent for LES and 25 per cent for RVNL.
Incidentally, the initial letter of acceptance “for manufacture and maintenance of 120 train-sets of Vande Bharat Express” was issued to consortium of JSC Metrowagonmash (70 per cent holding), LES (5 per cent holding) and India’s RVNL ( 25 per cent holding ) in March 2023.
“The firm was asked to submit the performance bank guarantee for ₹200 crore within 45 days of issue of the LOA ( i.e by 13.05.2023). However, the bank guarantee was submitted by the firm on 28.08.2023 because of the delay in formation of SPV and shareholding of the respective firms. The consortium was accordingly asked to deposit liquidated damages also for the delay. The contract was finally signed on 27.09.2023,” Railway officials clarified to businessline.
Configuration Issues
Senior officials also said tender documents “had very clearly specified that that train configuration (16 or 20 or 24 coaches) would be decided based on operational requirement of Indian Railways.
“This was clearly stated in the tender and was accepted by all the bidders. They were clearly told that the basic unit has to be of 4 cars so that trains can be formed in multiples of four,” the official said.
The Railways clarified that “in view of the success of Vande Bharat chair car version, and subsequent traffic projections” the national transporter revised its requirements “to 24 car train sets from existing 16 car train-sets” and both technology partners were asked to submit their detailed proposal in May 2024.
The 24-car configuration also necessitated changes in coach composition, luggage van, pantry and number of toilets in view of operational necessities.
“Technology partners were granted extension of 9 months to deliver the first prototype as per provisions of the contract,” the official said.