Railways Tightens Contract Execution

Indian Railways has made changes to improve construction quality, reduce touting, and make travel easier for passengers. The main change is a new contract execution framework.

New Rules for Contractors

Contractors bidding on projects worth over ₹10 crore must prove they have the labor, equipment, and finance to complete the job. This is called a “bid-capacity” audit.

60% of the contract value must be done by the main contractor’s own workers. This means they can only hire 40% of the workers from other companies.

This change is expected to stop delays in projects, like track-doubling jobs, which have been delayed by an average of 18 months.

Changes to Refunds

Refunds for cancelled tickets will no longer be given within eight hours of departure. This is up from four hours before.

Passengers can now cancel tickets at any counter nationwide, and don’t need a special receipt to get a refund.

Passengers can now cancel tickets at any counter nationwide, and don’t need a special receipt to get a refund.

Refunds will be automatic after the train’s schedule is finalized.

These changes are part of a broader effort to reduce touting and make travel easier for passengers.

Changes to Passenger Convenience

Passengers can now change their boarding point until 30 minutes before the train leaves its origin. This is a significant change from the previous 24-hour deadline.

Changes to Passenger Convenience Passengers can now change their boarding point until 30 minutes before the train leaves its origin.

This change can be made through the app, counter, or 139 call, and the seat will be held in the same quota to prevent multiple ticketing.

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This change is expected to benefit commuters in satellite towns like Thane, Dadar, and Navi Mumbai, where 42% of platform changes were rejected last year due to the rigid window.

Challenges Ahead

Railways’ capex is budgeted at ₹3.05 trillion for FY27, with 63% riding on external contractors. The new execution rules are expected to be a key factor in determining the success of these projects.

The penalty escalation formula has also been stiffened, with each month of slippage beyond 10% of sanctioned time now costing 1% of contract value, up from 0.5%.

As the Railways navigates these challenges, it is clear that the tightened contract execution framework will play a critical role in determining the success of its reform efforts.

Industry feedback has warned that the 60% self-execution floor could disqualify mid-tier firms, risking bid participation. The ministry has hinted at a 50% threshold in “special terrain” for Himalayan and Udhampur-Srinagar links.

As the Railways navigates these challenges, it is clear that the tightened contract execution framework will play a critical role in determining the success of its reform efforts.

Whether this will be enough to drive long-term growth and success remains to be seen, but for now, it is a crucial step in the right direction.