India, US set to sign pact for setting up Rs40,000-cr locomotive JVs

30 November 2015

India and the United states will formally sign an agreement for the setting up of two high horse power modern locomotive joint venture projects involving investments to the tune of  Rs40,000-crore. These include an electric locomotive factory at Madhepura and a diesel locomotive factory at Marhowra, both Bihar on Monday.

This signifies a giant leap for the nation's biggest ever `Make in India' initiative, a railway ministry release said, adding that the signing ceremony will take place in New Delhi.

Earlier this month, Indian Railways awarded letters of acceptance (LoA) for setting up the locomotive factory (DLF) at Marhowra and the electric locomotive factory (ELF) at Madhepura. These two factories are the excellent example of biggest ''Make in India'' initiative ever undertaken by Indian Government, an official release said.

While the contract for DLF Marhowra has been awarded to a USA–based GE Global Sourcing India Pvt Limited, the contract for Madhepura ELF has been awarded to a France–based Alstom Manufacturing India Limited. These two factories also mark the flow of FDI in the railway sector.

DLF Marhowra will manufacture and supply modern diesel electric locomotives of 4,500 HP and 6,000 HP (which in combination can operate as 9,000 HP and 12,000 HP multiple units).  ELF Madhepura will manufacture and supply modern electric locomotives of high horse power namely 12,000 HP. 

Under the agreement, 1,000 diesel locos will be manufactured in a period of 11 years with a basic cost of Rs14,656 crore and 800 electric locos will be manufactured in a period of 11 years at a basic cost of Rs19,904 crore.  Taking into account the cost of setting up factories and maintenance facilities, these two projects together are worth Rs40,000 crore.

These modern powerful state-of-the-art locos will be useful for heavy haul freight operations and mega freight operations in the dedicated freight corridor and for pan India operation. These factories would lead to substantial development of ancillary manufacturing units, generation of direct and indirect employment and substantial development in the region, the release added.

These two factories are joint ventures of the ministry of railways. The fair, transparent and competitive bidding process adopted in selecting the JV partner received wide-spread appreciation from all stakeholders. These projects will usher in new technologies into the Indian industry at large through high paced indigenisation, the release pointed out.

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