The Prime Minister’s Office (PMO) has stepped in to ensure all government departments stick to official policy on procurement of locally produced steel for key infra projects. The move follows objection by domestic steel producers against Railways decision to buy rails through a global tender on December 18 for the first time. This move led to the rail and steel ministries locking horns over the issue.
The latter felt decision to float a global tender went against the “Make in India” policy of Prime Minister Narendra Modi. Incidentally, the Domestic ally Manufactured Iron & Steel Products (DMI&SP) policy and Public Procurement Order 2017 were notified by the government earlier this year with a larger objective to facilitate domestic manufacturing.
In a recent letter to heads of various departments, Nripendra Misra, principal secretary to the PM said: “It is very disturbing that the broad message has not been appreciated by various departments. It should be the responsibility at the highest level in each department to ensure that the tender conditions are strictly in sync with the public procurement order and each tender must be examined from the point of view of the interest of Indian manufacturers.”
“The requirement of significant global experience in terms of trade performance may eliminate many domestic manufacturers. Any tender which is not sensitive to ‘Make in India’ message deserves scrutiny. There has to be a strong justifiable reason for incorporating any restrictive provision” Misra’s letter added. A copy of the letter has been uploaded on the steel ministry’s website.
The two main contenders for supply of rails include, state run Steel Authority of India Ltd (SAIL), which has been the sole supplier of rails to Indian Railways all these years, and aspiring entrant Jindal Steel and Power Ltd (JSPL).
On Thursday, a government committee on the use of locally-made iron and steel in government projects headed by Aruna Sharma, union steel secretary met and gave Indian Railways “one time exception” to buy 4.87 lakh tonne (lt) of rails under the global tender. The railways had earlier sought to buy 7.17 lt under the tender. As per minutes of the meeting, Railways’ requirement of rails in 2017-18 and 2018-19 is 14.59lt and 14.78 lt respectively. While SAIL has supplied 5.55 lt till November 2017, it would be able to supply 9.5 lt in 2017-18 and 15 lt in 2018-19. JSPL had indicated their rail making capacity at 7.5 lt and can supply 6 lt per annum to Railways.