New Delhi, Feb 25 (KNN) Railways should offer contracts on cost basis to the MSMEs shortlisted on competency and quality criteria and not on L1 basis, as followed by Ministry of Defence for developmental jobs, said an Expert.

The Minister of Railways, Suesh Prabhu, today said that the loco factories will create an ecosystem of many flourishing small and medium ancillary units which will get connected to the global supply chain.

The Railway Minister said they will boost employment potential of the entire Eastern region. Shri Suresh Prabhu said Indian Railways have since initiated a similar bid process for manufacture, supply and maintenance of train sets to be used for Rajdhani and Shatabdi services. It is proposed to increase the current procurement by 30%.

Reacting to this the a senior expert at the leading federation of MSMEs, Federation of Indian Micro and Small & Medium Enterprises, Debashis Bandopadhyay, said, “If Railway is really interested to upscale participation of MSMEs in the supply chain, it should offer contracts on cost basis to the MSME shortlisted on  competency and quality criteria and not on  L1 basis, as followed by Ministry of Defence for developmental jobs.”

“To ward off predatory pricing by large companies, the L1 condition if any should be considered within the MSME suppliers only in Procurement Policy for MSMEs to Railways,” he added.
 
President of Tamil Nadu Small & Tiny Industries Association (TANSTIA), C Muthusami, said that the Loco Factory set up in Chennai can be a boon for the SMEs who supply spare parts to them. (KNN Bureau)