Railway Minister Piyush Goyal said a locomotive factory will come up as planned at Bihar’s Marhowrah district and it will be set up by US major General Electric.
Addressing a press conference here, Goyal said all decisions on the manufacturing unit will be taken within the contract norms between GE and the Railways.
The announcement comes following media reports that the Railways is contemplating termination of a contract with General Electric (GE) for setting up a diesel locomotive factory in Marhowrah and reports that the company has warned the former against changes to the joint venture.
Goyal further said, the Railways, which is focusing on the electrification process to lower its energy bill and reduce pollution, has decided to speed up the process by electrifying 4,000 km of network a year.
While the Railways is discussing various options with GE, including exporting diesel locomotives from Marhowrah, Goyal was tight-lipped on the details of options being discussed.
“It is an issue between us and GE,” Goyal said on the sidelines, when asked when the Railways will tell GE what kind of locomotives need to be produced, in case there is a change in demand.
“Marhowrah factory work is going on as planned. We have had various discussions with GE and explored various options like possibility of exporting some diesel locomotives manufactured there. But the project will come up as planned,” Goyal said. Minister of State for Railways Manoj Sinha, said the Diesel Locomotive Work (DLW) Varanasi, which is the Railway-owned production unit that makes locomotives, has already started manufacturing electric locomotives. This year, DLW will roll out 30 electric locomotives, to use the excess capacity, as per railways’ production plan.
In August, GE Transportation announced that the Indian Railways' locomotive is the first of 1,000 diesel freight locomotives that the company will deliver as part of a $2.5-billion order.
In November 2015, General Electric had won an order to manufacture 1,000 diesel locomotives and supply them to the Railways over 10 years at 100 locomotives a year. While the Railways maintained that all decisions in case of a changing market scenario will be taken within the contract parameters, the contract of GE and the Railways is not a public document and various clauses of the contract are not yet clear.
Demand for diesel locos Even when the Indian Railways’ network gets largely or fully electrified, there will still be demand for diesel locomotives, as they can run under wire and may be required to serve in case of power failure, it is said.
As per the contract, GE has to supply 100 diesel locomotives next year (2018-19) of which 50 will have to be imported, and another 50 have to be Made in India. In 2019-20, the entire 100 trainsets have to be made in India.