Source: economictimes.indiatimes.com

BANGALORE: India’s fourth-largest software exporter, Satyam Computer Services, is seen as the favourite to win a significant IT outsourcing contract from Indian Railways as the country’s top tech firms intensify efforts in the local market to offset slowing demand overseas.

A senior Railways official told ET that the Hyderbad-based company has bid the lowest for a project to provide an asset management solution based on SAP business software for four locomotive sheds. He declined to reveal the value of the bids but said that TCS, India’s largest software exporter, and Wipro, the third largest, were among the bidders.

A Satyam spokeswoman confirmed that the Hyderabad-based company is the lowest bidder, but declined to provide further details. Officials at Wipro, TCS and Infosys did not comment.The contract will be the first in a series of outsourcing deals worth almost Rs 2,000 crore to be awarded by Railways over the next few months.

This paper reported last week that TCS has emerged as the lowest bidder for the country’s largest e-governance contract, pipping Wipro and Infosys Technologies, India’s second-ranked software exporter.

TCS bid Rs 1,677 crore for a project to computerise the Employee State Insurance Corporation and provide smart cards to around 1.5 crore industrial workers. In October, TCS signed a deal worth over Rs 1,000 crore with the Indian government for a project to improve passport services.

Government departments and state-owned companies are expected to spend nearly Rs 10,000 crore during the year ending March 2009. Next year, this sector will buy IT hardware and software worth around Rs 9,000 crore, said a senior official at a research firm which is working with government bodies to plan their IT spending.

The national e-governance plan is also under review, so estimates for next year could change.India’s software companies, which earn bulk of their revenue from overseas, have been paying increasing attention to the domestic market in the face of a slowdown in their main markets in the US and Europe.

Software industry grouping Nasscom is expected next month to revise lower its growth forecast of 21-24% for software and services exports in the year to March 2009. India exported software and services worth about $40 bn during April-March 2008 while the domestic IT market, including hardware, grew by 43% to $23.1 bn.

While Satyam has bid lower than its rivals for the first of Railways’ planned contracts, bidding will only get more competitive for the rest of the deals. “We plan to have a multi-vendor strategy, and ideally would like to have different vendors,” the Railways official said. “We will spend around Rs 8,000 crore on IT over the next five years.”

Railways plans to outsource three more contracts over the next few months, each estimated to be worth Rs 450-500 crore. The projects will be for automating and integrating its finance and payroll functions, materials management and software-aided train scheduling.

India’s top tech firms are also bidding aggressively for a contract from BSNL, estimated to be worth Rs 400 crore and due to be finalised by the end of this year. The state-owned telecom company is looking to implement a project to automate and integrate its business processes such as finance, payroll, marketing and customer service.