Railways to set up 3 locomotive units in Bihar

he Indian Railways is setting up its three locomotive manufacturing units in Bihar on a public-private-partnership (PPP) model. It would offer 74% equity to private players in the proposed ventures.

The three facilities include a diesel locomotive manufacturing unit at Marora, an electric locomotive unit at Madhepura and a rail coach factory at Chhapra.

“In accordance with the direction from our minister, the three units will be developed on a PPP model. In fact, with these ventures, the Railways are not even looking at a majority stake in the venture,” said a top Railway Board official.

“There is a growing need for new and advanced locomotives, which need to materialise in the shortest span possible. The answer to which lies in setting up manufacturing units with greater private participation,” the official added. The move seems to be in the right direction and is quite significant for private players, like Bombardier and Siemens and GE, who have shown keen interest in the Indian rail transportation segment.

“We are very keen on this project,” Siemens executive vice president VB Parulekar said. “While the development is absolutely welcome, the only hitch is that it involves investment in Bihar,” he added. Siemens is pretty keen on bidding for the Electric locomotive unit and the rail coach factory.

GE is also expected to invest $100 million in a joint venture. These investments are required for building the Rs 30,000-crore dedicated rail freight corridor. The Delhi-Mumbai-Kolkata freight corridor will be built with Japanese assistance.

The railway minister has had meeting with all the recognised global players, including GE global CEO Jeffrey Immelt. The locomotives, to be manufactured in the units, would be equipped with state-of-the-art technology, capable of hauling longer and heavier trains. The new coach factory would also provide high-capacity coaches.

“We have asked PricewaterhouseCoopers to draft qualification criteria, request for proposal, bidding and selection processes,” an official said. According to sources in Rail Bhawan, the railways need to spend around Rs 80,000 crore in rolling stock by 2010 and 50% of this is expected to be produced by the private sector.