The Hindu Business Line : Rlys on track for diesel loco unit

New Delhi, Feb 5 Indian Railways appears to be on track to establish the first diesel locomotive unit on a public private partnership (PPP) basis, having almost finalised the financial bid document.

For firming up the financial bid document or the request for proposal, Indian Railways had taken advisory services from consulting firm PricewaterhouseCoopers.

But before inviting the financial bids, the Railways wants the documents for diesel locomotive unit to be “internationally validated”.

“Since these are long term projects with private partners, we would want the bids documents to be examined by another international firm with procurement contract expertise,” said sources in the know.

While the Railways would be providing guarantees to buy about 800-1,000 locomotives over the next eight-year period, it would not be extending any fiscal benefits. “We may also need to get a Cabinet approval before inviting the bids,” said official sources.

American majors GE and EMD had earlier bid for the technical qualification process for setting up a new mainline diesel locomotive factory at Marhowra, Saran, Bihar.

However, there were some “inaccuracies” in the bid document of one of the bidders, it is learnt.

Thus, now the Railways has decided to combine the technical and financial bids and opt for a single bid.

Demand projections

The need to have these additional units is driven by the gap between demand for rolling stock and lower production capacity in the country. According to demand projections of the Railways, during the XI Plan period (2007-08 to 2011-12), it would require 1,800 diesel locomotives. The current production capacity is about 200 locos per annum.

Incidentally, the Railways has just started the process to appoint a consultant which would advise it for preparing the financial bid document for setting the electric locomotive factory at Madhepura, Bihar.

For the electric locomotive unit, the Railways has proposed that it would buy 1,000 locomotives over an eight-year period.

On its electric locomotive requirement, the Railways said it requires about 1,800 high power locomotives during 2008-13 for haulage of the projected freight traffic.

So far, it has been meeting the requirement of electric locomotives almost entirely through in-house production at the Chittaranjan Locomotive Works (CLW), located at Chittaranjan, West Bengal. CLW currently has a capacity to manufacture about 150 electric locomotives annually.

This is being augmented to 200 locomotives per year.