Railways denies Chinese firms’ Locomotive manufacturing projects

New Delhi:  Indian Railways has rejected Chinese firms’ plea to relax the rules for the INR 2,500 crore locomotive manufacturing plants in Bihar.

Two Chinese companies — CSR Corporation and CNR Corporation — had submitted bid for the INR 1,300 crore electric locomotive project at Madhepura and INR 1,200 crore diesel locomotive plant at Marhowra diesel locomotive project that are to be set up on public private partnership (PPP) model.

The firms, which were eyeing contracts valued at about INR 35,000 crore over 10-11 years, had urged the Railway Board to relax the norms that stipulated the companies to have experience of operating in at least three countries.

However, the Chinese companies have supplied locomotives to only two countries.

“We have told those (Chinese companies) that there would be no relaxation as the Cabinet has approved these conditions of the request for quotation (RFQ) in 2010,” Railway Board chairman Arunendra Kumar said.

He added, “Their request would have been considered if there was poor response, but several multinational companies have also shown interest.

The response has been fairly good.” The rejection comes at a time when Chinese companies created a flutter by bidding for a share of the Railways’ locomotive market, which is traditionally dominated by big-ticket American and European players.

There was keen interest whether Chinese firms can make the technical grade to submit financial bids for the projects as that could have set the stage for more competitive bids.

Apart from the Chinese firms, the bidders for the proposed electric loco factory include US firm GE Global and European companies like Bombardier, Siemens and Alstom.

Similarly, for the diesel loco factory, bidders include American firms GE and EMD. CSR, in a letter to the Railway Board, had said unnecessary conditions in RFQ were restricting the project from being uncompetitive.

“It is unfair for us to be prevented to participate in the project from the RFQ stage,” it says. The letter criticized the condition that a company applying for the project should have worked in at least three countries in similar line of operations.