Rly suppliers seek interest on dues | Coimbatore News

Coimbatore: City-based Railway Suppliers’ Association (RASA) shot off a letter to railways minister Piyush Goyal on Wednesday, demanding interest on pending payments to the micro, small and medium enterprises (MSMEs) that manufacture and supply components such as gears, compressors and other fabricated parts for train coaches.
Pointing out that the railways would collect hefty penalties from suppliers for any delay in supplies, representatives of the association said the suppliers shall also be entitled to receive interest on payment dues as per the Micro, Small and Medium Enterprises Development Act, 2006. “Only then, officials will clear the bills on time.”
According to them, at least 76 MSMEs are supplying to the railways and some of them are to be paid up to Rs2 crore. In total, the railways owes them Rs50 crore. This is despite the railways issuing a circular on June 16, asking officers to clear pending dues immediately.
S Surulivel, president, RASA, says, “We have taken bank loans that too by paying 10% of the order value as bank guarantee to deliver the orders. When payments get delayed, we end up paying more interest. It is not fair. We don’t have money to pay bank guarantee for the next order.”
They said certain zonal and divisional railways were habitual defaulters. They also appealed the railways accounts department to function with full strength, as staff shortage was often cited for delayed payments.
The railways has an effective online system to pay bills of regular stores and stock items. However, such system isn’t in place for non-regular purchases. “We are forced to run pillar to post to get payment for non-stock bills,” Surulivel said.
The RASA has also appealed the railways not to penalize MSMEs for delayed supply as normal production was yet to be restored. “Also, raw materials are often not available and there are frequent delays in transportation. They should wave all penalties for late supply till March 2021,” Surulivel said.