`40,000-cr FDI push for two rail projects

NEW DELHI: In a major FDI initiative, the Railways have attracted foreign investments worth a whopping `40,000 crore for setting up electric and diesel locomotive factories at Madhepura and Marhoura respectively in the eastern state of Bihar under the Public Private Partnership (PPP) mode.

“The GE Transportation System of the US will get the `22,000-crore contract for setting up the Marhoura diesel locomotive plant, while the French Alstom is likely to be chosen for the Madhepura contract worth approximately `18,000 crore. A formal announcement on both the factories will be made within the next few days,” chairman of the railway board, AK Mittal, said. “The letter of acceptance (of the contract) will be handed over for the Marhoura factory first,” railway board member (mechanical) Hemant Kumar said.

The two factories — in which the Indian Railways will have 26% equity — will start production four years from the date of award of contract.

The Marhoura factory will roll out 700 diesel locos of 4,500 horsepower and 300 locos of 6,000 horsepower over 11 years under a transfer of technology agreement that entails a “performance guarantee” clause for the selected bidders. The initial lot of 100 diesel locos will be taken on outright purchase.

The Madhepura factory will supply 800 locos of 12,000 horsepower over an 11 year period and will also maintain 500 of these for five years. Five electric locos will be brought on outright sale.

These next-gen locos are likely to come at a cost of `17 crore per loco, as against the expense of around `9 crore incurred in manufacturing the conventional locomotives.