Congress MP Naveen Jindal-owned Jindal Steel and Power (JSPL) on Thursday said Railways could have saved up to Rs 7,000 crore in last five years had there been no fetters on rail procurement, a point strongly disputed by state-owned SAIL.
Speaking at an event organised by Competition Commission of India (CCI), JSPL's Dy Managing Director and CEO (Steel Business) V R Sharma said Railways could have accrued the benefit as their firm was ready to supply the rails at 10-15 per cent cheaper than SAIL, at today's price.
"We are an approved rail manufacturer in the country. SAIL has an MoU with Railways and on the pretext of that MoU, they are buying all the rails from SAIL. We can give rails at least 10-15 per cent cheaper than today's price of SAIL," he said.
"Railways have been buying all these rails for at least past five years. They must have lost Rs 5,000-7,000 crore. We have written this to Railways. Railways says it is interested.
But, how to abolish the MoU?," Sharma added.
Stating that the MoU is an "unhealthy" one, he said, JSPL has already sounded its intention to supply rails to the Steel Ministry and CCI.
"We request CCI they should listen to us and give us a chance. They should ask Railways to buy something from us and create the competition. Who will get the benefit out of the competition? The Railways only," Sharma added.
He said as per the Central Vigilance Commission guidelines, any PSU buying anything for above Rs 50 lakh should go for open tendering and in this case, Railways should follow the suit.
Meanwhile, SAIL's Finance Director Anil Chaudhary said:
"This contention of JSPL is totally unfounded. Who are we to stop them? They had gone to Competition Commission and the CCI has already withheld saying the MoU between SAIL and RAIL is a valid one and nobody should object to that.
"Most of the PSUs are buying the raw material from anywhere they feel like. BHEL, IOC and NTPC are buying through tenders. May be, one or two companies are there who have old constitution and are buying from Tata Steel or SAIL. You go and convince them that you are producing the same steel so that they should buy from them as well."