Bangladesh Railway's move to buy 70 meter-gauge diesel-electric locomotives has been delayed by over a year due to lobbying by potential bidders to change a criterion of the tender that favours only one company.
The companies argued that the locomotives railway authorities were trying to procure were of half-a-century-old technology and their production was ceasing with the emergence of new generation locomotives that were cheaper, faster, more powerful and environment friendly.
Over the years, the number of railway locomotives has reduced to 295 from 486. Most of them are 40 to 50 years old. The railway desperately needs new locomotives.
The companies complained that a technical specification of the tender restricts most globally renowned locomotive manufacturers to take part in the bidding while it favours a certain company from which the railway had been buying locomotives since the 50s.
The railway in September, 2011, floated an international tender to buy the locomotives that have engine revolution capacity of 900 to 1,000 per minute (RPM) for around $250 to 285 million. But most locomotive manufacturers make engines that run at higher RPMs, up to 1,900 RPMs.
Reputable companies like GE (General Electric), Cummins, Bombardier, Malaysia-Thailand Umbrella (MTU), Siemens and Caterpillar were urging the rail authorities to increase the RPM limit so that all companies could take part in the bidding.
They said the companies used to produce low RPM locomotives but gradually moved to higher RPM engines as they have more torque, power, besides being fuel efficient and environment friendly.
They said only General Motors produces low RPM locomotives. General Electric also produces some low RPM locomotive engines but it was switching to higher RPM ones.
The representatives of the companies also argued that restricting the RPM would only favour Korean Hyundai Rotem that has sold nine locomotives to the railway in 2010.
Hyundai Rotem brings parts of locomotives from the USA and assembles them in Korea. It would supply 11 more locomotives to Bangladesh in 2013.
“If the RPM limit is increased, the bidding will be competitive and ultimately the price would be low. If not, then only one company will be eligible and railway will have no way but to buy the locomotives at whatever price the company quotes,” said a representative of a company.
However, the railway has been arguing for the low RPM engines as they have a proven track record in the country.
“We have workshops and expert manpower to maintain the locomotives,” said Bangladesh Railway Director General Md Abu Taher.
He claimed that the higher RPM engines were very light and not durable for railway. He did not agree that higher RPM engines would consume less fuel and be environment friendly. “It will increase maintenance cost,” he added.
But many countries across the world now use higher RPM engines for faster rail services.
The companies said the railway could save $1 million per locomotive if it buys higher RPM locomotives. It is cheaper because the locomotives are mass-produced.
“The pulling strength will increase with higher RPM engines. The low RPM locomotives can't pull if several extra coaches and wagons are added,” claimed a company representative.
He said railway would not face any trouble as spare parts would come with the locomotives and railway people would be trained under the project. “Rather the railway would in near future face problems if production of low RPM engines stops,” he added.
The companies said whenever they push for changing the RPM limitations, railway officials bring in the Hungarian case as an excuse.
Railway had bought 80 diesel-hydraulic locomotives from Hungary in 1980-82 which became obsolete within a few years. The railway DG referring to that said the locomotives had become a liability for the railway.
But the reality is that the locomotives were diesel-hydraulic and of low quality. Railway knew about the locomotives but they had to buy them due to pressure from the then government.
The companies said their quality high RPM engines were not comparable with the Hungarian engines.
In the face of pressure from potential bidders, the railway authorities recently increased the RPM limit of engines in the tender specification to 900-1,100.
However, this increase has no meaning as Hyundai Rotem could only manufacture locomotives that have engines of 1,100 RPM.
The representatives of potential bidders claim that the railway has been giving excuses for 30 years just to buy locomotives from a single company.