Railways make entry into PPP with two Locomotive Factories worth Rs.32000 Crore

New Delhi:  To make up for its failure in attracting private investment, the Indian Railways is gearing up for a grand entry into the private-public partnership (PPP) space with 2 locomotive factory projects worth INR 32,000 crore set to get off by December.

The railways plan to shortlist firms by July-end after receiving the requests for qualification.

“We received some queries after which a pre-bid meeting was held previous month. We hope to award the projects by December,” Mr. Arunendra Kumar, Chairman, Railway Board said.

In May, the Cabinet had accepted bidding for the projects afresh for an electric locomotive factory at Madhepura and a diesel locomotive factory at Marhowra, both in Bihar.

PPP in railways would be happening for the 1st time in a massive scale with these two factories, Mr. Kumar said.

He said, “It is a novel concept. For us, it will be a success in a sector where we have never ventured before.”

After the shortlisting, bid documents comprising requests for proposal (RFP) would be forwarded for inter-ministerial discussions. The selected private partners would manufacture locomotives and supply these under a graded yearly scale. Over a 10-year period, the factories would give the railways with 800 electric locomotives of 12,000 horsepower (hp) each and a mix of 1,000 diesel locomotives of 4,500 and 6,000 hp with high level performance guarantees, similar to international practices.

Another major project to be undertaken on PPP basis would be the elevated 62.28 kilometer (km) rail corridor in Mumbai that will link Oval Maidan and Virar.

Although work on the corridor should also commence shortly, setting up the 2factories through PPP should not be a trouble since there were no land issues for both the factories, Mr. Kumar said.

The Western Railway and the State Government are discussing issues relating to land acquisition, shifting of underground utilities and commercial use of land between Western Railway and State Government. A detailed financial model is yet to be submitted, though Western Railway has sought commercial exploitation of 130,000 square meter along the route to fund the project.