Rs 42,000 crore railway locomotives unit project in Bhar

MUMBAI: Ahead of the Bihar elections, the government is trying to expedite the much-delayed order for setting up two manufacturing units for railway locomotives that will attract an investment of Rs 42,000 crore in the state and two international majors are leading the race for it.

According to people close to the development, US-based GE has emerged the best bidder for diesel locomotives manufacturing plant proposed to be set up at Marhowra, and French major AlstomBSE -1.79 % is leading the race for setting up the manufacturing unit for electric locomotives, making these projects the first instance of major foreign direct investment in Railways.

"The projects have languished for almost 10 years now, but we are confident of awarding them by the end of September The interest shown by foreign companies was very encouraging. This will attract foreign investment and give the railways a big boost," a senior executive from the Railway Board, which is handling the tender, told ET.

Interestingly, the project was first announced in 2006 by the then railway minister Lalu Prasad Yadav but is now being pushed by the BJP government as the party gears up to fight Yadav & Co in the upcoming state elections. The two projects would be a big employment generator for the state.


The projects are being set up under the public-private partnership model with the Railways owning 26% and the private developer controlling the rest 76%.

The bids for the Rs 20,000- cr electric locomotive unit, which opened on Monday saw three global engineering heavyweights — Siemens, Alstom and Bombardier— in the race. It includes an assured procurement of 800 locomotive units by the railways over the next 10 years. The bids for the Rs 22,000-crore diesel fuelled locomotive unit opened on Tuesday.

It entails an assured off take of 1,000 units over the next 10 years. GE beat the second bidder, Electro-Motive Diesel, people familiar with the matter said.

Global majors have been eyeing the Indian transport sector due to the opportunity which comes at a time when their local economies are going slow on building transport infrastructure.