Business Today

Suresh Prabhu gives nod to big-ticket FDI projects in Railways

Rs 2,400 crore to be invested for setting up diesel & electric locomotive plants in Bihar.

Mail Today Bureau | March 9, 2015 | Updated 08:36 IST
Suresh Prabhu flags off FDI plans
Railway minister Suresh Prabhu addresses the CII National Council Meeting in the presence of CII president Ajay S. Shriram (centre) and director general Chandrajit Banerjee in New Delhi.

Railway minister Suresh Prabhu has finally given the go-ahead to the long-stalled, big-ticket foreign direct investment (FDI) projects to set up state-of-the art diesel and electric locomotive manufacturing plants in Bihar in collaboration with multinational giants.

The move forms part of the strategy to boost the 'Make in India' campaign.

The plan for setting up the two locomotive plants was first announced by then-railway minister Lalu Prasad Yadav in 2008 but got stuck due to delays and repeated revision of bidding documents.

A senior railway official confirmed that the Railways has finalised the financial bidding for the projects after a lot of rethinking and prolonged due diligence.

The two manufacturing plants would require an investment of around Rs 1,200 crore each. Financial bidding will be opened on August 31 and there will be two pre-bid meetings ahead of that, the official added.

The Railways will have 26-per cent equity while global players will have 74-per cent equity in each of the plants at Madhepura and Marhora.

The government had approved 100-per cent FDI in the Railways and setting up of the two locomotive plants as a joint venture will help to modernise the public sector behemoth and boost the country's infrastructure.

The two projects are among top eight infrastructure projects being monitored by the Prime Minister's Office.

The Madhepura plant will manufacture 800 electric locomotives of 12,000 horse power (HP) over 11 years. While five electric locomotives will be imported, 795 will be manufactured as per the bidding condition.

The Marhora plant will produce 4,500 HP and 6,000 HP diesel locomotives using state-of-theart technology. In the course of about 10 years after commissioning, the Marhora plant is expected to manufacture about 1,000 diesel-electric locomotives.

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