Railways Undertaken A Multi-pronged Strategy To Save Rs 1,500 crore In Procurement Of High Value Goods

Railways Undertaken A Multi-pronged Strategy To Save Rs 1,500 crore In Procurement Of High Value Goods

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New Delhi: The Railways has undertaken a multi-pronged strategy to save about Rs 1,500 crore (approx US$ 234.38 Million) in the procurement of high value goods, including diesel, in the current fiscal.

The Railways procures material worth more than Rs 50,000 crore (approx US$ 7812.5 Million) annually to cater to needs for production & maintenance of rolling stocks, signalling, tracks & fuel.

More Details:

  1.  The Indian Railways has launched a mission for procurement & consumption efficiency, aiming at significant savings in procurement.
  2.  A senior railway ministry official said,”The mission has been launched with a goal to capture significant savings and improvement in the quality of goods and services for which it is imperative to bring our procurement practices in line with international best practices.”
  3.  The public transporter has identified a few high value items where significant savings can be made.
  4.  The goal is to achieve at least 10% cost savings in the year 2017-18 & for this purpose, a total of 20 items have been identified include – HSD (high speed diesel).
  5.  He said,”The Railways have been striving hard to increase its revenues while at the same time reducing our expenses.”
  6.  The Railways procure HSD worth Rs 15,000 crore (approx US$ 2343.75 Million) in a year as it is the highest single buyer of diesel in the country.
  7.  It intends to reevaluate & rework the consumption & need of fossil fuel to achieve a sustainable reduction.
  8.  Cost reduction is being planned for diesel, which is the single most expensive item, by way of more efficient stocking, transportation & distribution.
  9.  The official said, long term contracting is also one of the strategies for leveraging benefits of long term commitment with oil PSUs.
  10.  Also, the railways is looking at the feasibility of adoption of an alternate form of diesel.
  11.  Besides, it has taken measures for enhancing vendor base, digitising procurement process & review of consumption pattern & modification in design to reduce procurement cost in high value items.
  12.  It was felt that along with looking for alternatives for the high value materials Railways procure, it may also look to revisit the consumption norms that are being followed as improved consumption would eventually mean lesser need to procure items.
  13.  It was decided to target both consumption norms & cost reduction without compromising safety & reliability, to make meaningful progress in the direction.

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