Railway ministry clears Rs2,400-cr loco manufacturing FDIs
09 Mar 2015
Indian Railways opened up for foreign direct investment with railway minister Suresh Prabhu granting approval to two separate diesel and electric locomotive manufacturing units in Bihar, involving total investments of Rs2,400 crore.
The move to prioritise the two long-stalled big-ticket FDI proposals for setting up state-of-the art manufacturing plants in collaboration with multinational companies is in line with Prime Minister Narendra Modi's `Make in India' campaign.
The plan for setting up the two locomotive plants, first announced in 2008 by the then railway minister Lalu Prasad Yadav, got stuck due to delays and repeated revision of bidding documents.
Indian Railways had shortlisted four foreign companies, including Alstom, Siemens, GE and Bombardier, for the proposed electric locomotive factory at Madhepura, while two multinationals, GE and EMD, are in the race for the mandate for setting up the diesel locomotive plant at Marhora.
It has now finalised the financial bidding for the Madhepura electric locomotive plant and Marhora diesel locomotive plant, each of which would require investment of Rs1,200 crore, after due diligence.
Indian Railways will hold 26-per cent equity in each of the plants, while the global players will have 74 per cent equity in the projects.
The bids will be opened on 31 August and there will be two pre-bid meetings ahead of that, railway officials said.
The two projects are also among the top eight infrastructure projects being monitored by the PMO.
When completed, the Madhepura plant will manufacture 800 electric locomotives of 12,000 horse power (HP) over 11 years, while the Marhora plant will produce 4,500 HP and 6,000 HP diesel locomotives using state-of-the-art technology.
In the course of about 10 years after commissioning, the proposed Marhora plant is expected to manufacture about 1,000 diesel-electric locomotives, which is about 100 locomotives annually.
