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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  1. A
    Sep 29, 2017 at 1:04 pm
    Rethink in Govt... the headline is a joke. Has this government ever been thinking? Question of rethink doesn't arise. Here's what really happened: 1.) GE produced a report saying 'Make in India' will be affected if diesel locomotive project is scrapped 2.) Minister had a nightmare where he saw his boss was furious with him for adding to the woes of an already limping 'Make in India'. In his dream he saw his minister's chair rocking, a telephone call being made to him asking him to come to see party president and finally he woke up in cold-sweat hearing a voice, "PM wants your resignation." 3.) Next morning the announcement from the minister, "GE’s diesel locomotive project in Bihar is on track." Pehley sikhaya gaya, sir uthakar jiyo, ab bataya jaa rahaa hain dar dar ke jiyo!
    1. S
      Sep 29, 2017 at 12:56 pm
      With all his supposed brilliance Mr Piyush Goyal ought to keep his personal thoughys to himself and not speak in public unless it is a well thought out govt policy decision. When the country is now eager to receive foreign investment inview of a premier US company like GE which has already invested its money and resources in the manufacture of the latest disel locomotives , statements like the one Goyal made and had to retract do not behove of him.
      1. Ravi Ok
        Sep 29, 2017 at 11:30 am
        Few days back i posted about GE diesel engine fiasco.GE actually spent rs 100 crore in last 10 years to actually develop diesel engine specific for indian railways. Most of Indian railways engines were sourced from american companies which are now owned by GE. Looks like our overenthusiastic PM forced gadkari and goyal to declare ban on all petrol diesel engine vehicles in short span.I mean taking ad hoc instant decisions without thinking of consequences is hallmark of this govt. So Modi BJP govt ordered GE to shut down theirdiesel engine plant and looks like GE squeezed Modi govt's nuts pretty hard.BJP govt would have lost court cases in India-USA for reneging from contract.
        1. C
          Sep 29, 2017 at 7:18 am
          Yes, this is not a rocket science. But the fact is that we still need help to make a diesel engine. Actually except for the shunting engines, most of the bigger units are diesel electric engines. We are simply unable to make powerful engines...
          1. A
            Sep 29, 2017 at 8:35 am
            yes I agree with you , power is either taken from the outside from the over head wires or generated internally. But the biggest irony is something else. Lines which are likely to be electrified last and will remain on diesel traction , are going to be branch lines where normal passenger trains with 8-10 coaches and they too are being replaced with DMU ( Diesel Multiple Units). They will be isolated sections with not much of freight over them. Heaviest freight lines are already electrified or being electrified .Now this factory will produce heavy horse power diesel locomotives which are uses exclusively on the freight ,especially on Coal , Iron and other ores. The contract also says that there is a purchase agreement that Indian Railway will purchase a certain number of Locomotives every year.Because of current situation loading of Indian Railway is almost stagnant or is increasing slowly. With DFC power requirement will come down, where these engines will go ?
          2. T
            Sep 29, 2017 at 6:27 am
            This is how they give in to multinationals.
            1. J
              Sep 29, 2017 at 7:41 am
              without multinationals most countries would be in trouble. They employ lots of people and pay well. Trun would jump at the chance of working of working in a multi national. They pay better. Where would be without Samsung, Hyundai and others
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