When you step onto a Railway coach next time, remember that much of the grime laden upholstery and fittings that you see are worth their weight in gold, given the amount of money already spent on them over the years. The dirty floors you step on these days made some suppliers multi-millionaires. The latest form of this age-old racket is courtesy a letter issued under the mandate of ex-Member Mechanical R.K. Rao and ex-Finance Commissioner R. Sivadasan in February 2007. This letter gifted pre-fixed suppliers an approximate cost in some cases more than double the market rate for 7 items labeled 'fire-retardant'. The business has already run close to Rs. 1,500 crores in the last 3 years. Even after accounting for reasonable profits, the scam runs anywhere between Rs 500–1,000 crore. The items upgraded to allow for 100% over-pricing and huge kickbacks are flooring sheets, cushion fillings made from recron, seat covers, suspension washers, silent blocks, and brake gear bushes. This letter is an anomaly within Railways, as it shows that the estimates, usually never given like this, were not prepared independently through a costing analysis, but likely prepared by the suppliers themselves. This letter is itself an open admittance to the scam.
The Fire Retardant Railways Scam
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