The Hindu Business Line : Fast-tracking rolling stock, loco production capacity

In his Budget speech today, the Railway Minister, Mr Lalu Prasad, singled out nine PSUs (public sector undertakings) under the Ministry for a special mention — for performing profitably and contributing substantially to the Railway's kitty. With a combined turnover of Rs 7,034 crore, they earned a profit of Rs 818 crore and made a handsome dividend payment to the Railways. Container Corporation of India (Concor) led the pack with a turnover of Rs 2,489 crore and a profit of Rs 526 crore.

The PPP (Public-Private Partnership) route, so far followed through SPV (Special Purpose Vehicles), is to be made more flexible, the concession period being fixed with "a view to ensure a reasonable return on investment rather than having a predetermined concession period for all the projects." A major attraction for quite a few JVs in the pipeline.

Bonanza for Bihar

Except for the new rail coach manufacturing unit, for which the foundation stone was laid by Ms Sonia Gandhi a few weeks ago at Rae-Bareli in UP, no less than six facilities are planned for Bihar.

A wheel and axle plant near Sonepur costing about Rs 900 crore will be the second such facility, the first one in Bangalore of 1984 vintage.

A diesel locomotive manufacturing plant at Marhowra near Chhapra, estimated to cost over Rs 2000 crore, will supplement the one set up in Varanasi in 1961. A new wagon repair workshop at Samastipur will add to the 13 that dot the 64,000-km network to overhaul the growing fleet of wagons. The existing wagon repair shop at Samastipur will be upgraded to undertake major mid-life rehabilitation of wagons.

The coach repair unit at Harnaut near Rajgir will take the tally of such workshops to 10.

A new repair facility for the DMUs (Diesel Multiple Units) is expected to come up at Sonepur.

A facility to supplement the Chittaranjan Loco Works in West Bengal to meet the growing demand of electric locomotives is to be set up at Madhepura near Katihar, taking the projected investments in Bihar to over Rs 5,000 crore.

Undoubtedly Mr Lalu Prasad's initiative will immensely help the unemployed youth of Bihar, providing them with a vastly improved job opportunities in the otherwise near dormant industrial scenario. The diesel loco unit at Marhowra alone will have an employment potential of over 7,000 while the wheel plant at Chhapra could easily absorb about 1100. A major boost to economy of the much-neglected backward areas of north Bihar would be perhaps invaluable.

Keeping in mind the need to upgrade technology, a change in work culture, achieving optimum productivity, yet keeping the unit cost low, PwC (Pricewaterhouse Coopers) has been retained to provide a roadmap for a liberalised approach for setting up all these new projects in Bihar. Reportedly, a retired Member of the Railway Board is being made part of the PwC team to help it through the maze of data that will have to accessed and evaluated.

Some of the major locomotive manufacturers of both diesel and electric, variety — General Electric, General Motors, Bombardier, and Alstom — will undoubtedly be vying for a piece of cake. Having failed in their earlier attempts about decade back to grab a controlling stake in the Chittaranjan and Varanasi units, they may pull out all stops to enter into a JV with the Railways to set up a base not only for the Indian market, but also for exports to African and Far-East countries.

Of vital importance would be the extent to which the private sector could be involved in joint ventures, if not allowed to set up its own facilities. A move which could also perhaps end up providing invaluable benchmarks in productivity and new technology for the existing seven production units and 52 large and small repair workshops to aim for.

(The author is a former Member — Mechanical — Railway Board. He can be contacted at acharya@bol.net.in)

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