The Hindu Business Line : Railways to invite bids for loco unit in Bihar

New Delhi, Oct 17 With global majors EMD and GE expressing their interest with the Indian Railways for setting up the diesel locomotive unit through a joint venture, the Railways is now working towards inviting the bids for setting up the unit in Marhowra, Saran district, Bihar.

The request for proposal is being firmed up now, after which the bids would be invited.

Companies would be asked to bid for the project by quoting the price at which they would supply each unit of locomotive to Indian Railways, said sources in the know.

“They have to quote the price as per the present level of taxes,” said officials adding that the player who quotes a lower per unit price would be awarded the bid.

In terms of human resources for the unit, to avoid poaching of personnel from the Railways’ production units, Indian Railways is trying to provide for deputation of officials from the Railways set-up to the new units.

Land procurement

Indian Railways will facilitate land procurement and provide the land on lease to the joint venture, with the lease charges being eight per cent of value of land. While the Railways would facilitate provision of water and electricity to the location, the joint venture would have to bear the cost of electricity and water.

Indian Railways would provide an assurance to buy a certain number of locomotives from the unit for certain duration. “While the duration is likely to be fixed at 10 years, the exact number of units to be picked up annually are being firmed up,” said sources.

Joint venture

Indian Railways would have 26 per cent equity in the joint venture while the private firm would have the majority stake. “The firms can bid through a consortium while the lead firm needs at least 51 per cent stake,” said sources.

As per the request for qualification document, to which GE and EMD had responded, the Indian Railways had stated that the required manufacturing capacity of the new factory is envisaged to be around 100 diesel locomotives per annum.

The Ministry of Railways is tentatively looking to procure mainline diesel electric locomotives with minimum Horse Power requirement of 4,500 at 22.5 tonne axle load and 6000 at 25 tonne axle load, it said in the request for proposal. Additionally, the Railways may also require provision of maintenance services by the joint venture company for the mainline diesel electric locomotives to be supplied under the project.