Railways opens up projects for Rs42,000 cr FDI

Indian Railways has finalised two major projects that will open up investment opportunities for foreign capital of up to Rs42,000 crore.

The two ventures – one for a Rs20,000-crore diesel locomotive unit and another a Rs22,000-crore electric locomotive unit - will come up in Bihar.

The first of the major FDI investments in railway projects will flow into Bihar, where assembly polls are slated for November.

The first project would be a joint venture electric locomotive production facility, to be set up in Madhepura, with an investment of Rs22,000 crore. Alstom, Bombardier and Siemens are vying to be the majority partner of Railways for the Madhepura locomotive factory, financial bids for which were opened on Monday.

The project cost includes the cost of the manufacturing plant and electric locomotives.

The Madhepura locomotive plant will manufacture 800 electric locomotives of 12,000 horse power over 11 years. The project will import the first five of the 800 locomotives while the rest will be manufactured in India.

The railway ministry is expected to make a final decision on the foreign partner within a month, the ministry sources said.

Indian Railways will open financial bids for the other project, a Rs20,000-crore diesel locomotive factory at Marhora, today. It has shortlisted GE and EMD - one of which would be the private partner for the Marhora unit.

The Marhora plant is expected to manufacture about 1,000 diesel-electric locomotives in ten years, that is 100 locomotives annually. Of the total 1,000 locomotives to be manufactured at the plant, 700 will have 4,500 horse power capacity while the remaining 300 will be of 6,000 horse power each.

In both the projects, Railways will have 26 per cent stake, while the selected global bidder will hold the remaining 74 per cent.

The cost of the diesel locomotive factory of around Rs20,000 crore will be inclusive of the price of locomotives and manufacturing plant.