Golden Rock Workshop takes e-auction route to sell scrap

In a bid to ensure transparency, the Stores Department of the Golden Rock Railway Workshop here has introduced an e-auction system for selling railway scrap materials.

The new system provides a common platform for scrap purchasers all over the country to offer their bids online in a fair and transparent manner.

A valid class III digital signature certificate; payment of online registration fee of Rs.10,000 and payment of 10 per cent of the bid lot; possession of SBI account with online banking facility are among the prerequisites laid down for the buyers for taking part in the bidding process under the e-auction system.

E- auction has been hosted in the e-procurement site and is maintained by the Centre for Railway Information Systems. The new system provides user name and password for the registered purchasers who can log on to the site and make their bidding. It also provides for e-payment gateway for online payment of Earnest Money Deposit.

The new system will ensure better competition and reduce scope for cartelisation, say workshop authorities. It would fetch more revenue for the railways as the competition would be wide open and simplify work for the officials. For the purchasers, the system would ensure transparency as the bidder can view the amount quoted by his competitor. The traditional system of auctioning would continue till such period the new system is well established, authorities said. Auction of scrap materials takes place once or twice every month in the workshop, a senior official said adding that the workshop had been selling scrap materials to the tune of Rs.120.50 crore per annum.

Engine blocks, plate off-cuts, used brake blocks, released cylinder liners, bazaar scrap and over-aged rails and sleepers are the scrap materials sold time to time by the workshop.

The first e-auction conducted on Friday fetched Rs.27.54 lakh for the workshop which is engaged in myriad activities including periodic overhaul of diesel locomotives and manufacture of container wagons and steam engines.

The new system was inaugurated by the Controller of Stores, Southern Railway, B.K.Sinha in the presence of Chief Workshop Manager P.Mahesh and senior officials.

S. Rly switches track to e-auction of scrap

Southern Railway, which is moving to e-auctioning of scrap, believes that it will be a win-win situation, both for itself and the buyers.

The transparency in transactions is expected to lead to better price realisation for the Railways, and cost saving for the end users due to the elimination of middlemen.

Railways expects to garner about Rs 312 crore during this year from the sale of scrap compared with about Rs 340 crore last year when traditional auctioning was in vogue, mostly used by dealers in scrap.

A senior Southern Railway official, briefing the media after an interactive session with members of the Coimbatore District Small Industries Association (Codissia) here, said

Southern Railway disposes of scrap such as cast iron sleepers, rails and other melting bars and the auctions were conducted at Golden Rock, Tiruchi, the General Stores Depot at Perambur, and the Signal Stores Depot at Podanur.

It ranked third among the railway zones in the country last year in the sale of scrap with the all-India sale value of scrap being Rs 3,500 crore.

Scrap sale target

Southern Railway generated sales of Rs 340 crore through sale of scrap last year and this year’s figure could be around Rs 312 crore due to lower availability of scrap.

While predominantly, iron and steel would constitute the scrap, there could be other materials – non-ferrous items, paper, batteries, waste oil, etc. On an all-India basis, the target was to achieve sales of Rs 3,750 crore through sale of scrap this year.

Southern Railway could benefit from higher floor price while the actual users, by directly participating in the auction, could see their acquisition cost coming down as no middlemen were involved.

This did not rule out entirely the participation of scrap traders but their role could be less. The e-auction would be more transparent and as buyers directly participate in the online auction, there would be no cartelisation impacting prices.

Negotiations with banks

A trial e-auction would be held on August 10 with limited number of items and in about three months, the entire scrap sale process is expected to move to the online mode, depending on the response.

Negotiations were going on with banks to facilitate e-payment. He said five railway zones had been selected to hold e-auction and Southern Railway is the first to launch it in the public domain and has taken steps to propagate the concept in its jurisdiction.

While e-tendering took about two years to stabilise, he was confident of e-auction becoming a success in a much shorter time frame of three months, to facilitate which Southern Railway has made its Web site user-friendly and is ready to conduct free classes.

While the 10 per cent EMD will be transferred immediately after the auction was closed, the successful bidders would be given time to remit the balance money.

During last year, North Western railway topped the charts in selling scrap by earning Rs 350 crore followed by Northern Railway with Rs 342 crore sale and Southern Railway was third with Rs 340 crore.

He conceded that buyers would face issues such as arranging for lifting of the scrap from where they were stored at their own cost rather than getting them delivered at their doorstep by dealers and making upfront payment for their purchase rather than enjoying some free credit period.

But the saving in price due to direct purchase of scrap would be good enough to attract the actual user industries to participate in the e-auction, making it a win-win situation for both the railways and the buyers.

He said the response from the Codissia members was good as many were actual users.

Published in: on August 15, 2010 at 6:23 am  Comments (3)  
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