Railways buys more than 98% of its goods and services in India and moving this purchase to the GeM platform in the next “probably 8-12 months” will help in making procurement process more transparent, says Mr. Goyal
Indian Railways is committed to integrate with the government e-marketplace (GeM) portal to move all its procurement to the platform, Union Minister Piyush Goyal said on Sunday.
The railways’ direct procurement of goods for its operations or its public sector undertakings or production units stood at about ₹70,000 crore-₹75,000 crore, the Commerce and Industry and Railways Minister said.
“I am happy to share that GeM and Indian Railways are burning the midnight oil, working day and night to ensure this entire ₹70,000 crore procurement on the GeM platform,” Mr. Goyal said at the GeM-CII National Public Procurement Conclave 2020.
“Our own belief is that it will save railways not less than 10%-15% and that could be a saving of as high as ₹10,000 crore,” he added.
Railways buys more than 98% of its goods and services in India and moving this purchase to the GeM platform in the next “probably 8-12 months” will help in making procurement process more transparent, seamless, efficient and faster, Mr. Goyal said.
“The railways has committed itself fully to integrate with GeM and move all procurement there (GeM)…Imagine we will save 1000s and 1000s of man hours of procurement time.
“The amount of elaborate tendering, advertisements, bids, bids opening, reverse auction, all of that become so seamless that our digital system of the railways will flag the requirement on the GeM portal, and it will be available for the whole world to see and more and more people will be enticed to register on GeM as suppliers,” Mr. Goyal said.
He added that if any supplier or vendor provides bad quality goods, it will be black listed not only on GeM, but throughout the government system.
“We will ensure that the entire government system does not entertain that company anymore,” he said, adding that at a later stage, GeM will move from goods and services to contracts.
The Minister said the government’s public procurement would be in the range of $100-150 billion (about ₹7.5 lakh crore-₹11.25 lakh crore), and probably more if one combines all the PSUs, State government and local bodies.
He said GeM should play a role in publicising all those products which are not made in India, but are required in India in a big way so that “we can encourage” entrepreneurs to plan to make those products in India, as is being done by railways.
He said railways has identified the products which are imported and is working through RDSO (Research Design and Standards Organisation) to develop new vendors for those products.
“We have taken certain game changing reform measures in railway vendor registration also. Number of products have been moved out of vendor registration.
“So mostly safety items are being kept for vendor registration…If you are registered in any one organisation, you are deemed to be registered throughout the railways,” he said.
He said the number of products that need RDSO approval have been reduced from 660 to about 400, and “now we are examining these 400 to reduce it further“.
He said railways’ goods sheds are being upgraded and all private sidings are being given full permission to convert to a public siding to have as many users as they want without restrictions and “it will be notified in the next few days” and there will be no extra charge for converting to public siding.
Sidings are constructed to eliminate handling of goods at stations and facilitate local haulage between the place of production/consumption and railway station.
Mr. Goyal said freight trains will now have a timetable, and “you will get goods moving from lets say Mumbai to North East in 2-2.5 days compared to 7 days earlier. That kind of transformation, we will commit to our customers”.
“At some stage later, I am going to have committed timelines delivery with a cash back, if you do not deliver on time, somewhat like Domino’s pizza. We have parcel trains running on several routes across the country and I would encourage people to use our parcel trains,” he added.
The Commerce Ministry launched GeM for public procurement in August 2016 with the objective of creating an open and transparent procurement platform for the government.