CHENNAI: Citing a steep rise in input costs for copper by 80%, aluminium by 60% and steel by 30%, and the West Asia military conflict, the Tamil Nadu-based Railway Equipment Suppliers Association has urged the Railway Ministry to waive penalties imposed for delayed product supplies.
The association noted that over the last six months, raw material prices have surged multiple times, while the ongoing West Asian conflict has driven polymer and plastic raw material costs up by nearly 100%.
“One of my suppliers in Mumbai uses LPG to manufacture springs for coach production. Due to disruptions in commercial LPG supply amid the West Asia conflict, his deliveries are delayed. This, in turn, affects my supplies to the railways,” S Surulivel, president of the association, said.
Such delays, he said, attract heavy penalties under existing rules. “Small suppliers are already incurring significant losses due to rising raw material costs, especially since the price variation clause (PVC) does not apply to final products,” he added.
According to Surulivel, over 100 MSMEs affiliated with the association are facing losses amounting to several crores due to penalties imposed for delayed supplies. These MSMEs supply components to all three major coach manufacturing units - ICF (Chennai), RCF (Kapurthala) and MCF (Rae Bareli).
He further demanded that all purchase orders for copper and aluminium intensive products, such as electrical motors and appliances, with delivery deadlines falling after September 1 last year, be brought under the force majeure clause, allowing exemption from penalties due to unforeseen circumstances.
He also called for condoning delayed or failed supplies and waiving liquidated and general damages for such orders. “Penalties collected after September 1 last year should be refunded to MSMEs, similar to the relief provided during the Covid-19 pandemic,” Surulivel said.