labels: Alstom Power , General Electric, Indian Railways, Siemens Limited
BHEL in joint venture talks with Alstom, GE, Siemens for Indian Railways' 660-locomotives tender news
25 July 2008

Mumbai: Bharat Heavy Electrical Ltd (BHEL) is in talks with Alstom SA, General Electric Co and Siemens AG for a joint venture with Indian Railways to manufacture high horse power locomotives, chairman K Ravi Kumar said.

BHEL plans to jointly bid for a plant in Bihar to supply 660 locomotives of 12,000 horsepower for eight years and provide maintenance for two decades. The Railways will own 26 per cent of the venture that may need investments of about Rs1,000 crore.

''In every venture we look for a three-way combination: a technology provider, a manufacturer like us, and a user,'' Ravi Kumar said, adding, BHEL will finalise the partner by the end of the year.

The Indian Railways has floated a tender, the largest of its kind, to procure 660 electric locomotives, at an estimated cost of Rs25,000 crore. The price bids, for supply and maintenance of these locomotives for a period of 20 years, also includes jointly setting up an electric locomotive factory in Medhepur, eastern Bihar, at an estimated cost of over Rs1,000 crore.

Besides BHEL, other global companies such as Siemens AG, Alstom SA, Toshiba Corp., CSR Zhuzhou Electric Locomotive Works Co. Ltd of China and Mitsubishi Heavy Industries Ltd have also likely to bid for the project. The bids will be accepted till 30 July.

BHEL expects a big boost to passenger and freight traffic on the Indian Railways, the second largest rail network in the world, with the new freight corridors.

Ravi Kumar is looking at rail engines and oil-rigs to boost his company's annual sales to $11 billion in the next four years. His main competitors for the bid are Larsen & Toubro Ltd. and Mitsubishi Heavy Industries Ltd.

BHEL, which makes diesel and electricity locomotives at its plant in Jhansi Uttar Pradesh, has an annual capacity to make about 50 engines each of 5,000 to 7,000 horsepower. What they don't have is the technology for higher horsepower locomotives. BHEL is also looking for rail coach prototype of German origin and may shell out as much as Rs200 crore to acquire it. Ravi Kumar, however, declined to name the German company.

The Railways has planned a 2,700km-long dedicated freight corridor project running through 12 states to ease traffic on the country's busiest freight routes. The corridor will connect New Delhi in the north to Mumbai in the west and Kolkata in the east. These routes account for 60 per cent of the freight transported by the railways, which had initially estimated the project to cost around Rs28,000 crore.

Besides the number  of  projects in India , the railways are also considering the freight corridors linking India to some of its neighbors in the next few years which will bridge important gaps in the Trans-Asian Railway (TAR). India is planning a rail link with Myanmar, which involves constructing the Jiribam-Imphal-Moreh line in Manipur and the Tamu-Kalay-Segyi line in Myanmar, as well as rehabilitating Myanmar's existing Segyi-Chaungu Myohaung line.

According to Rail India Technical and Economic Services Ltd, which conducted the feasibility study of the proposed freight corridor, the Jiribam-Imphal-Moreh rail link would cost $649 million, while the Tamu-Kalay-Segyi link in Myanmar would cost $296 million. Refurbishing the Segyi-Chungu-Myohaung line has been pegged at $62.5 million.

The railways estimates it will need nearly 1,800 locomotives over the next five years, which is beyond the current capacity of the Chittaranjan Locomotive Works, which  currently has a capacity to manufacture about 150 electric locomotives a year, which may go up to 200 a year.

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BHEL in joint venture talks with Alstom, GE, Siemens for Indian Railways' 660-locomotives tender