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Mamuni Das

TOP VIEW: A file photo of locomotives at a station

New Delhi June 7 Private firms may end up owning 74 per cent stake in the new rolling stock manufacturing units for the Indian Railways.

PricewaterhouseCoopers (PwC), which is advising the Railways on the strategy for enhancing its rolling stock capacity (currently heavily lagging behind the demand), has suggested that the proposed locomotive, coach and wheel manufacturing plants have majority private participation. The Railways may hold the balance 26 per cent share in these joint ventures.

Currently, the Railways operates as a vertically integrated entity, with locos, coaches and wheels being entirely produced by departmental units. These include loco works at Chittaranjan (West Bengal) and Varanasi, and the Integral Coach Factory at Kapurthala and Perambur (Chennai). It is only the wagon segment that has private players such as Texmaco and Jessop.

PwC has also been entrusted with the job of working out the documents including qualification criteria, request for proposal, bidding and selection processes.

The Railways has announced plans to set up four new factories to meet rolling stock requirements. They include two for manufacturing locomotives (one for 150 diesel locos and another for 120 electric locos per year). The others are a unit for 1,100 passenger coaches and another to manufacture 1,00,000 wheel discs per year.

Eyeing these plans, global players from the French firm Alstom to Bombardier of Canada, US-headquartered GE, German firm Siemens and Russia-based Transmashholding have approached the Railways and are showcasing similar joint ventures undertaken by them in other countries.

These firms, while evincing interest to set up units in the country, have called for duty concessions and assured long-term demand from the Railways.

When contacted, Mr Pratyush Kumar, President and CEO, GE Infrastructure, said that an investment of about $100-200 million would be required to set up a unit that can roll out 200 diesel locos annually.

The Railways would need additional capacity of 200 electric locos and 200 diesel locos each year.

According to demand projections, during the XI Plan period (2007-08 to 2011-12), it would require 62,000 wagons, 1,800 diesel locomotives, and 1,800 electric locomotives.

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