Since September 2020, the price of every basic raw material has increased abnormally. RASA are incurring heavy losses currently, to supply the orders placed before September 2020. Railway manufacturing organizations have resorted to impose the option clause in store contracts.
Coimbatore: Railway Suppliers Association in Coimbatore represents about 70 industrial units, in the small and micro sector.
The Railway manufacturing organizations like ICF, RCF, MCF, BLW, CLW, DMW, RWF and Podanur S&T workshop usually release purchase orders 9 to 12 months in advance. Accordingly, the orders being supplied at present, were, in fact, issued during July/August 2020, after the last year Coronavirus lockdown period.
Since September 2020, the price of every basic raw material has increased abnormally. RASA are incurring heavy losses now, to supply the orders placed before September 2020. The recent two months corona virus lockdown closure and hike in transportation cost have added fuel to the fire which is already burning the small and micro units. Now the Railway manufacturing organizations have resorted to impose the option clause in store contracts.
By operating this option clause, the purchase order quantity is enhanced by 30% at the prices prevailing before August 2020. This merciless act of Railway Manufacturing Units is nothing but “getting themselves warmed up, when the small industries are on fire”. The small industries are wounded and limping with the damages inflicted on them. They stated that they are struggling for survival.
They said, "Exercising option clauses and compelling small units to supply 30% increased quantity, at last year's price will be the last straw on our backs, at this juncture. The Railway Board, vide its circular no. 2021/RS(G)/779/5 dt 13.05.2021, has elaborated on the operating option clause in stores contract. Under clause 3.5.1, it has been stated that “reasonable notice as mentioned above is only for the purpose of allowing the contractor suitable time to make necessary arrangements for the supplies and not for seeking any consent from the contractor.” Such a stipulation leads us to feel that “Railway suppliers are simply treated as slaves.”
The statement also added, "The much proclaimed slogan like “the suppliers are our partners” has evaporated into empty phrases. We submit to state that the option clause is totally inappropriate and outdated in respect of small industries under present conditions of unbridled, rampant raw materials price increase. The option clause is absolutely irrelevant, when the store's contract does not have any meaningful price variation clause to compensate for the extensive raw material price increase. The option clause increase is unjustified as Railways has so far not ensured 25% procurement from MSMEs as mandated by MSMED 2006 Act."
The Railway manufacturing organizations like ICF, RCF, MCF, BLW, CLW, DMW, RWF and Podanur S&T workshop usually release purchase orders 9 to 12 months in advance. Accordingly, the orders being supplied at present, were, in fact, issued during July/August 2020, after the last year Coronavirus lockdown period.
Since September 2020, the price of every basic raw material has increased abnormally. RASA are incurring heavy losses now, to supply the orders placed before September 2020. The recent two months corona virus lockdown closure and hike in transportation cost have added fuel to the fire which is already burning the small and micro units. Now the Railway manufacturing organizations have resorted to impose the option clause in store contracts.
By operating this option clause, the purchase order quantity is enhanced by 30% at the prices prevailing before August 2020. This merciless act of Railway Manufacturing Units is nothing but “getting themselves warmed up, when the small industries are on fire”. The small industries are wounded and limping with the damages inflicted on them. They stated that they are struggling for survival.
They said, "Exercising option clauses and compelling small units to supply 30% increased quantity, at last year's price will be the last straw on our backs, at this juncture. The Railway Board, vide its circular no. 2021/RS(G)/779/5 dt 13.05.2021, has elaborated on the operating option clause in stores contract. Under clause 3.5.1, it has been stated that “reasonable notice as mentioned above is only for the purpose of allowing the contractor suitable time to make necessary arrangements for the supplies and not for seeking any consent from the contractor.” Such a stipulation leads us to feel that “Railway suppliers are simply treated as slaves.”
The statement also added, "The much proclaimed slogan like “the suppliers are our partners” has evaporated into empty phrases. We submit to state that the option clause is totally inappropriate and outdated in respect of small industries under present conditions of unbridled, rampant raw materials price increase. The option clause is absolutely irrelevant, when the store's contract does not have any meaningful price variation clause to compensate for the extensive raw material price increase. The option clause increase is unjustified as Railways has so far not ensured 25% procurement from MSMEs as mandated by MSMED 2006 Act."