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Our Bureau

Costs about Rs 86 lakh each; existing coaches to be replaced in phases

Ahmedabad June 21 Public sector "Mini Ratna" Bharat Earth Movers Ltd (BEML), which has supplied coaches to the Delhi Metro, will now manufacture stainless steel Electric Multiple Unit (EMU) coaches for local trains of Mumbai and Kolkata, even as the company is exploring possibilities of exporting these to the Middle East.

The company is designing these coaches with a stainless steel body which would cost around Rs 86 lakh a piece, Mr B.L. Bajaj, BEML's Director (Finance), Mr Prabhu M Kagi, Head, Technology Division, and other officials said here on Thursday.

The existing coaches in the two metropolitan cities' local trains will be slowly replaced by stainless steel coaches.

These coaches would be supplied in phases.

"It is for the Government to decide which of the two cities is going to be the first to get steel coach trains," they told Business Line after announcing the company's Follow-on Public Offer (FPO) to raise about Rs 450 crore to fund its expansion plans.

An equal amount would be raised through internal accruals.

Delhi supply

The company, whose revenue in the railway-related business increased by over 600 per cent from Rs 16.43 crore to Rs 110.87 crore between 2004 and 2005 following orders from the Railway Board and Delhi Metro Rail Corporation (DMRC), had supplied the first batch of 188 modern stainless steel metro coaches to Delhi so far.

"As of February 2007, we have orders from the Railway Board for 300 coaches worth Rs 102 crore, to be completed in the current and the coming financial years.

"We also have letter of intent (LoI) for supply of 875 coaches in the fiscal 2008 and 2009, for which prices are yet to be fixed," they added." Besides, the company is executing an order of 36 air-conditioned EMUs worth Rs 26 crore and for 40 metro coaches for DMRC, to be completed by this month-end.

In all, BEML has a healthy order book position of more than Rs 1,200 crore as of February this year.

Increasing demand

Demand for metro coaches are expected to increase in the immediate future to cater to the upcoming Metro projects in cities like Mumbai, Chennai, Bangalore, Hyderabad, Ahmedabad and Kochi.

BEML being the only indigenous manufacturer of these coaches, it is going to tap this new business.

The company is already expanding its infrastructure to increase production from the existing 150 metro coaches per annum.

A new Metro Fabrication Hanger has been planned at the company's Bangalore unit for manufacturing Metro Cars for DMRC.

In view of the Railways' plans for upgradation of services, including high-speed corridors, BEML is enhancing its manufacturing capacity from 400 coaches to 550 units a year, through the newly-commissioned Rail Products Fabrication Unit at the Kolar Gold Fields (KGF) Complex.

Part of the issue proceeds (Rs 214.51 crore) will fund the metro coach manufacturing facility and another Rs 9 crore would be invested towards the R&D Centre of Excellence for Metro Coaches at Bangalore. BEML is exploring possibilities of exports to the Middle East so as to increase its exports worth Rs 110 crore in 2006 to a projected Rs 150 crore in 2007.

Other projects

Also on the anvil is the Goa Skybus rail system project, an eco-friendly and economic rail-based mass transit system developed by the Konkan Railways and BEML.

Portfolio

The company, whose product portfolio includes 28 products at present, has also planned to invest Rs 150 crore, along with an matching investment by Coal India Ltd, for manufacturing heavy duty tyres for earth moving equipment used by the two public sector companies.

Apollo Tyres and J K Tyres have been approached for technological assistance in this regard.

Production is likely to start within two years.

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