"Tough" terms on tender for procurement of 1,100 cars for needs of Serbian Railways

“Serbian Railways” has announced tender for procurement of 1,100 new cars under the terms that exclude domestic bids. The project is financed by the European Bank for Rehabilitation and Development.

The Chamber of Commerce of Serbia has recently reacted stating that "Serbian companies have not deserved that”. The most insurmountable condition for participation in the tender is financial power of a bidder.

Not even uniting into domestic consortium will be of help, because the manufacturers have to have minimal annual income of 30m EUR and volume of production of 100-200 cars per series.

Vojislav Maksimović, the assistant of the Manager of Car Factory Kraljevo, points out that the domestic companies do not have annual incomes larger than few million euros. According to his words, the tender is such that certain types of cars can only be supplied by "Siemens" or "Bombardie". Therefore, domestic manufacturers are focused on arrangements with foreign manufacturers, and the Car Factory is currently negotiating with "Tatra Cars" from Slovakia.

"Goša" is in somewhat better position because it will bid on this tender together with its owner "Žos" - manufacturer of cars from Slovakian city of Trnava.

Tomislav Stefanović from "Goša" points out that the Railways divided tender into 5 lots, which enables competing for some of the lots. Depending on the part of the tender for which a company applies, it has to have income between 16 and 24m EUR in the last three years. When a company competes for more than one lot, the required incomes for each lot are summed up, which can lead to the situation where a bidder is required to have income of 50-60m EUR.

EBRD and Railways have also issued another term, which, according to Stefanović, "is not good", because, although the Law on public procurements stipulates that the bids of domestic bidders must be 20% more favorably evaluated, that is not applied in the case of this tender.

The race has begun.