Rethink in Govt, Piyush Goyal says GE’s diesel locomotive project in Bihar is on track

Responding to Piyush Goyal’s remarks Thursday, Nitish Kumar told The Indian Express he had always maintained that “full electrification of railway engines” was “not practical and possible” at this stage.

Written by Avishek G Dastidar , Santosh Singh | New Delhi/patna | Updated: September 29, 2017 7:36 am
Piyush Goyal, General Electric, GE diesel locomotive factory, Railway Minister Piyush Goyal, Indian railways, indian express Railway Minister Piyush Goyal with MoS Manoj Sinha (left). (Photo: PTI)

Rolling back a move by his ministry to exit General Electric’s diesel locomotive factory project in Marhowra in Bihar, Railway Minister Piyush Goyal Thursday said the project was “on track” and he did not see “any change happening”. “Our government does not make sudden change in policies. I am sure you will not grudge me my internal discussions and the fact that we should have an open mind for improving as we go along continuously,” Goyal told reporters.

On September 18, The Indian Express reported that the Railways had begun discussing a proposal to wind up or exit the diesel locomotive factory project in Bihar in view of plans for near-total electrification of tracks in the future, wherein use of diesel-fuelled traction would be very limited.

The Railways had awarded contracts for the Madhepura electric and Marhowra diesel locomotive factories in Bihar to Alstom and GE respectively in 2015. The two projects were billed as the biggest FDI in the rail sector, together representing around Rs 40,000 crore of investment, according to statements issued by the government.

The Marhowra project was expected to manufacture and supply modern diesel electric locomotives of 4,500 HP and 6,000 HP — in combination, they could operate as 9,000 HP and 12,000 HP multiple units. Madhepura, on the other hand, would manufacture and supply modern electric locomotives of 12,000 HP.

Under the agreements, 1,000 diesel locomotives were to be manufactured over 11 years at a basic cost of Rs 14,656 crore, and 800 electric units over the same period at a basic cost of Rs 19,904 crore.

The proposal to exit the Marhowra project was reconsidered after Bihar Chief Minister Nitish Kumar expressed reservations and the Bihar BJP unit urged the Centre not to change the project. In a statement, GE also underlined that “alteration of this contract will have serious impact on job creation and skills development and cause the government to incur substantial costs”.

Responding to Goyal’s remarks Thursday, Nitish Kumar told The Indian Express he had always maintained that “full electrification of railway engines” was “not practical and possible” at this stage.

“I had reacted soon after the news report (in The Indian Express) was published. I will speak to the Railway Minister when I visit Delhi. In our country, full electrification of railway engines is not practical. What if there is some fault? Our country still has to prepare itself for realising complete electrification of engines. That is why we still have to bank on diesel engines.”

The Bihar BJP unit had also taken up the Marhowra issue with the Centre to ensure “smooth functioning” of the NDA alliance in the state.

Goyal said “fruitful” discussions had been held with the General Electric top brass over the past few days on various options, including possible export of some of the locomotives made in the factory.

“I discussed with them (GE) how their locomotives can be useful for us. Can we explore opportunities wherein some of these locomotives could be exported, can we look at opportunities going forward where we can meet the twin objectives of reducing pollution, saving (fuel) costs in the overall interest of the nation and yet make sure that contracts or agreements that are made by the country or by the Railways continue to serve the people of India in the best interest,” Goyal said.

“The Marhowra factory is being set up, I think it is on track. I don’t think any change is happening,” he said.

He also mentioned that acting on a GE request, the Railways was sending a team of officials for inspection to the Marhowra factory site.

Allaying concerns, Minister of State (Railway) Manoj Sinha said: “GE ke astitva par koi sankat nahin hai (there is no danger to the existence of GE)” in India. He said this was “no rocket science” and a factory making diesel locomotives could easily start making electric engines, if needed.

Earlier, in an email statement to The Indian Express, GE said: “The project creates a robust supply chain ecosystem in India, constituting 60 new local suppliers and 10 global suppliers to achieve over 70 per cent localisation. Roughly 1,000 roles have been hired in the factory and maintenance shed and 5,000 jobs created and sustained in the supplier network. An alteration of this contract will have serious impact on job creation and skills development and cause the government to incur substantial costs.

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