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There seems no end to the woes of the Marhowra diesel locomotive project which was supposed to be built by General Electric (GE). A day after reports came out that the railways may give the multinational major an option to manufacture electric locomotives as railways is not keen on procuring diesel engines, a senior official said the possibility of giving such an offer is unlikely.
“We are aiming at almost 100 per cent electrification in the next three to four years from the existing level of around 42 per cent. Hence, we are not keen on the diesel plant. But as it was allotted through a competitive bidding process and the prices of diesel and electric locomotives are completely different, it is highly unlikely that this option may work out,” said an official close to the development. However, the idea was discussed in a meeting between Railways Minister Piyush Goyal and GE officials at Rail Bhavan on Thursday. But the exit clause from the project may also cost the railways more.
The plan to wind up the project was mooted in a review meeting of the railways on September 7, after Goyal took charge of the railways ministry. The project was part of the Rs 40,000-crore contract that railways awarded to GE and Alstom to set up diesel and electric locomotive factories at Marhowra and Madhepura, respectively, in November 2015. “Both the contracts were awarded at different rates. Hence, conversion of plant to electric may be a complicated process,” he added.
The Marhowra project alone was set to bring in an investment of Rs 2,052 crore. It was expected to manufacture at least 1,000 diesel locomotives over a period of 10 years. “Indian railways has embarked on a massive electrification exercise for its traction needs with a view to improve the efficiency and mobility of its network and substantially reducing the energy bill. Regarding Marhowra diesel locomotive factory, all aspects of the matter are being examined right now, taking into account the need and various contractual and legal obligations,” said another official.
Though the project was conceptualised by Lalu Prasad during his tenure as the railways minister in 2007, it took eight years for the contracts to be awarded. The project was planned for 4,500 horsepower and 6,000hp diesel locomotives. Railways was supposed to have 26 per cent stake in the project and would have provided land, while the foreign companies would have got the remaining 74 per cent stake. Railways was also offering 200 acres of land for the project, which was touted as the largest in the 100-year history of GE in India.