Railways Tightens Contractor Rules, Boosts Project Quality

Indian Railways has rolled out a fresh set of reforms to improve project execution, strengthen contractor accountability and speed up infrastructure delivery across the network. The new rules are aimed at curbing weak bidding practices and ensuring that only financially and operationally sound firms take up railway projects.

Under the revised framework, contractors will now have to furnish an upfront performance security of 10% before work begins, instead of having the amount deducted from running bills. Companies with pending litigation exceeding 50% of their net worth will also be barred from bidding for railway contracts.

Insurance and compliance steps

To further reduce project risk, the Railways has introduced professional indemnity insurance and all-risk insurance requirements. These measures are intended to improve execution quality and provide stronger safeguards during construction and delivery.

The ministry said the reforms are part of a wider push to implement 52 changes during the year, with a focus on faster project completion, better governance and more efficient logistics.

Wider freight reforms

Alongside contractor rules, Indian Railways has also opened freight wagon design to industry players, allowing firms to develop designs based on their operational needs. The Research Designs and Standards Organisation will evaluate the designs, after which they will undergo prototype testing, safety certification and formal approval before induction into the network.

The reforms also include changes for container-based transport of commodities such as fly ash, petroleum products, fertilisers and agricultural produce. Railways has simplified rules for container train operators as well, including a unified all-India licence, a uniform registration fee of ₹25 crore and no renewal fee after 20 years of successful operations.