GE, Siemens in race for electric locomotive unit

Leading manufacturers of railway rolling stock like GE, Siemens, Alstom and Bombardier have been shortlisted for setting up a Rs 1,960-crore (Rs 19.6 billion) electric locomotive manufacturing unit at Madhepura in Bihar.

The facility, to come up on the public-private-partnership mode, will roll out 120 IGBT (insulated gate bipolar transistor) electric locos of 12,000 horse power every year.

"GE, Siemens, Alstom and Bombardier have been selected for the first stage of bidding to set up the factory at Madhepura. We expect the project to be awarded by the end of the year," said a senior GE executive on condition of anonymity.

Railway officials said efforts were on to expedite the bidding process so that the unit could become operational in three years.

At the same time, they are considering applications for setting up a diesel locomotive manufacturing unit at Marhowrah, also in Bihar's Chhapra district.

The railway ministry expects the Rs 2,720-crore (Rs 27.2 billion) unit will manufacture 130 diesel locomotives every year.

The overall investment envisaged for setting up both the facilities and manufacturing rolling stock units at Madhepura and Marhowrah is estimated to be Rs 29,000 crore (Rs 290 billion).

The ministry would procure 1,000 units each of electric and diesel locomotives from the two facilities over an eight-year period.

The railways had floated tenders for setting up both the facilities in April 2008.

On receiving one non-compliant bid each for both the units in February 2009, the ministry had resolved to establish the factories as departmental production units.

The four companies were shortlisted even that time for the electric loco unit. GE and US-based EMD were shortlisted for the diesel loco plant, though GE was the only one to put in the final bid.

The private sector entities entrusted to set up the units would be responsible for maintaining the locomotives for a period of 25 years.

The factory at Marhowrah was approved in 2006 and that at Madhepura in 2007.

A senior official at the ministry informed, "Due to the slowdown last year, we had received feeble response from potential bidders. Initially, the projects were considered to be set up as production units of the railways. Consequently, Railway Minister Mamata Banerjee gave a go-ahead to put the units on the PPP basis."

Both the factories were envisaged for commissioning during the current five-year Plan period (2007-12). They are now slated for commissioning by 2013.

Low budgetary allocations for the projects have raised concern from industry experts.

Of the Rs 2,720 crore (Rs 27.2 billion) required for setting up the Marhowrah factory, Rs 29 crore (Rs 290 million) -- just over one per cent -- has been provided till date.

Another Rs 667 crore (Rs 6.67 billion) is to be raised from private sector entities. The remaining resources have to be provided by the ministry.

Similarly for the Madhepura unit. Of the total requirement of Rs 1,960 crore (Rs 19.6 billion), Rs 63 crore (Rs 630 million) -- about 3 per cent -- has been made available by the ministry, while Rs 667 crore (Rs 6.67 billion) is to be raised on PPP basis.