Indian Railways orders 39,000 wheels from Chinese manufacturer
What's the story
The Indian Railways has placed an order for 39,000 wheels for passenger coaches with a China-based firm, Minister Ashwini Vaishnaw said on Wednesday. This comes after ongoing contracts with a Ukrainian company were affected due to the Russia-Ukraine crisis. The Indian Government will be paying 1.68% more to the Chinese manufacturer for the purchase order.
Context
Why does this story matter?
India has been engaged in a cross-border conflict with China since 2020 after clashes with the People's Liberation Army (PLA) led to the death of 20 Indian soldiers at the Galwan Valley. Soon after, India banned multiple Chinese-origin applications and denied clearance to Chinese investments in India. The move is significant due to restrictions imposed by New Delhi on investments from China.
Railways
Chinese firm Taiyuan allotted tender for 39,000 wheels
The Railways has placed an order with Chinese manufacturer Taiyuan, the Minister said in response to a Lok Sabha question. In a written reply, he informed that the purchase order for 39,000 wheels for LHB coaches has been given against a global tender. The present war crisis between Russia and Ukraine affected supplies against the ongoing contracts from Russian and Ukrainian firms, he said.
Tender
Global tender floated after Ukrainian firm cited inability
Indian Railways had granted a letter of acceptance for 30,000 wheels for passenger coaches to a Ukrainian firm that later invoked a force majeure clause due to its inability to supply. Vaishnaw added, "We then floated a tender for 39,000 wheels and placed an order on M/s (Taizhong), Hong Kong with manufacturer M/s Taiyuan, China." The firm is registered under India's Land Border policy.
Quote
What did the Railway Minister say?
"The rate on which the contract has been placed with the Chinese firm was 1.68% higher than the rate per wheel given in the acceptance letter to the Ukrainian firm," Vaishnaw said in the written reply.
Taiyuan
Company registered in Hong Kong
India awarded the global tender for solid forged wheels (rough turned) to TZ (Taizhong) Hong Kong International Limited in May, The Economic Times reported. It is the international trading arm of a Chinese company founded in 1950. The wheels will be manufactured at the Taiyuan Heavy Industry Railway Transit Equipment Company in China's Shanxi district.