Locomotive Factories in Bihar: In cold storage for years, two Railway projects to start soon

Sources said the Railways is giving finishing touches to the formalities and awaiting the conclusion of the Bihar Assembly elections to make the announcement for locomotive-factory projects at Madhepura and Marhowra.

Written by Avishek G Dastidar | New Delhi | Updated: December 25, 2015 10:51:26 pm
indian railways, indian railways locomotive factories, Indian railways factories in bihar, bihar indian railways factories, bihar polls, Madhepura Marhowra railway factories, Madhepura and Marhowra indian railways, Madhepura Marhowra railways locomotives, bihar news, business news, industry news, india news, latest news The deal is that the factories will provide Indian Railways with 800 electric locomotives of 12,000 horse power each and a mix of 1,000 diesel locomotives of 4,500 and 6,000 horsepower each with high level performance guarantee similar to international practices.

Years of red tape, indecision by bureaucrats and seven railway ministers later, the mammoth locomotive-factory projects of Indian Railways at Madhepura and Marhowra in Bihar are finally ready to see the light of day.

Together, the projects represent a foreign direct investment of Rs 3,300 crore in railways under the ‘Make in India’ banner — the biggest ever for the sector. American multinational General Electric and French giant Alstom have qualified as lowest bidders for the diesel and electric loco factories, respectively. The diesel loco factory will cost Rs 2,052 crore, while the electric one will cost Rs 1,293.57 crore.

Sources said the Railways is giving finishing touches to the formalities and awaiting the conclusion of the Bihar Assembly elections to make the announcement.

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Conceived and announced by former Railway Minister Lalu Prasad in 2006-07 (Marhowra) and 2007-08 (Madhepura) in the Rail Budgets, the projects faced delay with successive governments and dispensations within the ministry undecided on the utility and the route chosen for setting up the factories. Lalu Prasad’s tenure itself did not see significant movement on the matter following the Budget announcements.

The Railways will provide land and own 26 per cent equity in the factories while agreeing to procure locomotives from these factories over 10 years. The two chosen companies, while supplying the engines, will also vouch for its maintenance. The deal is that the factories will provide Indian Railways with 800 electric locomotives of 12,000 horse power each and a mix of 1,000 diesel locomotives of 4,500 and 6,000 horsepower each with high level performance guarantee similar to international practices.

Historically, Rail Bhawan bureaucracy has been divided over the projects, which accounts for the inordinate delay. Concerns have been raised at all levels in the past on the “assured offtake” clause in the deal and whether the very model of the joint venture was giving an unfair advantage to the private parties at the government’s cost.

But towards the fag end, the UPA government in 2014, and significantly towards the beginning, the present NDA government resolved all the concerns and decided to go full throttle on the big-ticket projects. The factories are expected to provide employment opportunities in North Bihar, adding to the thrust on industrial development of the Eastern region.

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