Indian Railways will now digitise the submission of bills by vendors for payment and issue of inspection certificates by inspecting agencies with the aim of achieving complete digitisation of its contract management.

Besides, the state-run transporter has introduced the letter of credit (LC) mode of payment as an option in supply/works contracts to improve transparency and the ease of doing business.

“It has been decided that all tenders for supply/works having an estimated value of Rs 10 lakhs (over $15,000) and above shall include in tender conditions an option for the contractors to take payment from railways through LC arrangements,” said a senior Railway Ministry official.

It would cost 0.15 per cent of the LC to the contractors.

Indian Railways has already undertaken steps for digitisation of its entire supply chain in a bid to adopt end-to-end paperless working in contract management by eliminating human intervention.

“Now, one does not have to come to the Railways office for submission of bills and getting inspection certificates,” said the official, adding: “Bill approval status can be tracked online.”

The system includes digitisation of processes like bill submission, inspection, dispatches, receipt, bill passing and bill payments, and warrantee monitoring.

With 100 per cent e-tenders and e-auctions already assimilated into the system, the Railways is further planning to build on these initiatives to achieve seamless flow of materials, finances and information.

The Indian Railways has a vast supply chain to maintain, sustain and build its huge asset base, to run the system, and to provide transportation services.

The Railways’ supply chain has a large number of stakeholders and involves huge recurring expenditure of about Rs 50,000 crore annually. This supply chain generates large volumes of business and employment upstream and hence is critical in the Railways’ functioning.

Currently, the Railways has about 52,000 suppliers registered with a huge transaction order of rolling stock, track items, maintenance spares and other such items.

The supply chain digitisation would encompass integration of information flows, physical flows, and financial flows between railways and its supply chain partners. It involves completely digitising the internal business processes of material supply chain and seamlessly integrating processes controlled by different stakeholders digitally to achieve a completely integrated, paperless and digitised supply chain.