KAVACH tender is of around ₹7,000 crore and will open on September 19, says RailTel Corporation

RailTel Corporation of India is gearing up to participate in a significant government tender for the KAVACH system in locomotives. The tender, valued at over ₹7,000 crore, is set to open on September 19.

On August 30, the Narendra Modi government awarded ‘Navratna’ status to Satluj Jal Vidyut Nigam (SJVN) Ltd, NHPC Ltd, RailTel Corporation of India Ltd, and Solar Energy Corporation of India Ltd. RailTel Corporation of India, a central public sector undertaking (CPSU) under the Ministry of Railways, has become the 22nd ‘Navratna’ in India.

“Navratna status, per se, many tenders where we are bidding, we might get an advantage there,” said Sanjai Kumar, Chairman and Managing Director of the company, said in an interview with CNBC TV-18.

The current market capitalization of the company is ₹15,822.26 crore.

Below is the verbatim transcript of the interview.

Q: Congratulations on being conferred this Navratna status. Tell us, how does it change things for you about either being a preferred vendor, or you are looking to raise some money, how does it change things for the company?

A: Navratna status has been seen as a special category being accorded by the government of India to its CPSEs, and we are fortunate enough to get this opportunity at this young age – 24 years we are completing this year.

So when we talk of benefits, certainly many tenders where we are bidding – there is a Quality Cum Cost Based Selection (QCBS) kind of evaluation system – we might get an advantage there.

If we talk of investments, yes, investment limits certainly are improved. Now we can do some investments like data centres and all where earlier we had to approach the government of India for investments and then – similarly, we can form joint ventures (JVs) for business opportunities, not only in India but even abroad.

Recently, we have started exploring markets in international business – like South Africa, African countries and Caribbean countries. So this is going to benefit us because sometimes some project is awarded to us. Of course, we may be required to open offices also abroad. So this is certainly going to be a really good opportunity for us. And at the same time, there’s a challenge, and our team is completely ready to take this challenge and to perform not only in the domestic market, but we are ready to launch shortly, sometimes when we get some opportunity from abroad also.

Q: You did mention that you would probably see some amount of preference when it comes to tenders. Can you tell us what are the tenders that you are currently participating in? What is the kind of competition that you see, and hence, the advantage that you could probably see now, potentially because of the Navratna status?

A: I am not very much aware specifically of this, but yes, we are participating in a very big tender of the government of India, which is for KAVACH in loco and which is due on September 19 and we are preparing for the same.

Many other tenders are also coming. We are preparing the most awaited tenders which even the media was also asking many times in previous interactions. So these are the important tenders for us now.

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LTE tender, which was floated sometime back, for now, has been put on hold by the government of India, Ministry of Railways, maybe because they are giving priority to KAVACH tenders finalisation first. But Navratna, per se,  since we were not eligible earlier, we were not looking for such tenders, but certainly now we will be focusing on such tenders also in the future.

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Q: When will you hear about the outcome? Should we expect it in a week, a month or a couple of weeks? Give us a broad timeline, at least.

A: Should take about a couple of months.

Q: What is the size of the tender, and how much would you be bidding for?

A: The size of this tender is around ₹7,000 plus crore. We are vouching for this tender for the first time, and our partner is also newly approved by the Research Designs & Standards Organisation (RDSO). So I can’t comment upon the size of the order we get, but the total size of the tender is ₹7,000 plus crore.

Q: You are bidding with Quadrant FutureTek, and you will be bidding for this entire ₹7,000 crore bid. Is that fair to assume?

A: Quadrant is our partner, but right now I would not like to share this information because this is sensitive information. Competition is already there.

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