FDI in railways: Three global cos bid for setting up loco factory

New Delhi: Marking first major FDI offer in the railways, three global companies have submitted financial bids for setting up of a modern electrical locomotive factory in Madhepura in Bihar at the cost of nearly Rs 1300 crore.

Siemens, Alstom and Bombardier have submitted price bids for setting up the factory in a joint venture model to manufacture 80 state-of-the-art locos per year at an estimated cost of Rs 1296 cr, said a senior Railway Ministry official.

The bids will be evaluated by the tendering committee and the lowest bidder will be announced by September-end.

While railways will have 26 percent equity, the successful bidder will have 74 percent equity in the JV project.

Though General Electric had shown interest in the project at the initial stage, it opted out of the price bid later.

Dubbed as first major project under 'Make in India' initiative in the public transporter, the successful bidder will manufacture 800 locomotives after getting contract award in Bihar.

While 5 locos will be imported, the rest 795 will be manufactured at Madhepura as part of the project. Maintenance of the locos will also be the responsibility of the company and for this it will set up two maintenance sheds at Nagpur and Sharanpur.

The factory will produce locos with 12,000 horse power required for heavy hauling of goods in a faster speed on the Eastern Dedicated Freight Corridor. Currently 6000 HP electric locos are operational in the rail network.

The factory will come up at 300 acre of land and it will be the responsibility of railways to acquire the land for the project.

While 120 acre is required for setting up of the factory, 155 acres will be utilised for building township as per the project requirement.

"We will pay compensation under the Railways Act and compensation money has been deposited with the state government," said the official, adding "Till now about 60 acres have been acquired and rest will be in due course."

Railways will sign the land lease for 30 years with the bidder company on normal market rent.
As per the bidding condition, land has to be handed over within 90 days of awarding the contract and the total contract will be for about for 18 years, he said.

There will two maintenance sheds will be set up at Nagpur and Saharanpur for the state-of-the-art locomotives.

The Madhepura unit will also be allowed to export locos after fulfilling railways demands.

Cleared by the Cabinet in 2006 during Lalu Prasad regime, the ambitious project dragged over for eight years before finally the bidding document approved by the cabinet in January 2014.