Business News | Railways Tightens Contractor Rules, Opens Freight Wagon Design to Industry in Fresh Reform Push

New Delhi [India], July 14 (ANI): Indian Railways on Tuesday announced a fresh set of structural reforms aimed at improving project execution, encouraging private sector innovation in freight transportation and making logistics more efficient, with Railway Minister Ashwini Vaishnaw unveiling the measures during a press conference as part of the ministry's broader plan to implement 52 reforms this year.

A key reform tightens contractor eligibility for railway projects. Contractors will now have to provide an upfront performance security of 10 per cent before work begins instead of deductions being made from running bills. In addition, contractors whose pending litigation exceeds 50 per cent of their net worth will not be eligible to bid for railway contracts. Professional indemnity insurance and all-risk insurance have also been introduced to strengthen project management.

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Explaining the move, Vaishnaw said, "The more serious people will participate in the work of the railway," adding that the reforms are intended to improve construction quality while discouraging contractors focused primarily on arbitration and litigation.

Railways has also opened the door for industries to develop freight wagon designs based on their operational requirements. The Research Designs and Standards Organisation (RDSO) will evaluate new designs, followed by prototype testing, safety certification and approval before they are inducted into the railway network.

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Among the freight reforms, the Railways have introduced container-based transportation of fly ash, which is currently transported mainly in open wagons.

The ministry said closed containers will reduce pollution during transportation, storage and unloading while making handling easier through equipment such as reach stacker cranes. India generates around 340 million metric tonnes of fly ash annually, of which 96 million metric tonnes are used by the cement industry. However, only 13 million metric tonnes, or about 4 per cent of total generation, are currently transported by rail.

The ministry also announced reforms for transporting petroleum products, fertilisers and agricultural produce through containers to improve handling, reduce contamination and lower logistics costs.

In addition, rules for container train operators have been simplified through a unified all-India licence, a uniform registration fee of ₹25 crore for all routes and the removal of renewal fees after 20 years of successful operations.

Separately, Vaishnaw announced a skill certification framework for railway projects to ensure workers in critical trades such as welding, plumbing, masonry and concrete testing are properly trained. He said, "This project can be implemented across all projects in a maximum of 24 months," while stressing the need for a skilled workforce to support India's large-scale infrastructure expansion.

The Rail Bhoomi portal has also been introduced to streamline land acquisition, with the ministry estimating it could reduce acquisition timelines by 30-40 per cent, depending on the state. (ANI)

(The above story is verified and authored by ANI staff, ANI is South Asia's leading multimedia news agency with over 100 bureaus in India, South Asia and across the globe. ANI brings the latest news on Politics and Current Affairs in India & around the World, Sports, Health, Fitness, Entertainment, & News. The views appearing in the above post do not reflect the opinions of LatestLY)