Bhel-Kawasaki mull JV for metro coaches, propulsion system

The venture is likely to roll out in 2019-20, will boost turnover at Bhel's Bhopal unit by a third

Bhel (Bharat Heavy Industries Limited) and Japan-based Kawasaki Heavy Industries (KHI), are in talks for forming a joint venture to make locomotives and steel coaches for metro trains in India. If the two firms join hands, Bhel's Bhopal unit will be able to raise its turnover by Rs 1,500 crore to Rs 2,000 crore, a well-placed source in the public sector company told Business Standard.

"Talks with Japanese firm Kawasaki are going on and are at an advanced stage. Bhel's Bhopal unit specialises in making motors and related systems such as control panels, alternators and propulsion systems. The unit will be given priority for making steel coaches," the source said.

Various Indian states are developing metro rails and two lines of 32 km each have also been proposed in Bhopal and Indore. "As of now, the company supplies motors and other related systems to Indian Railways," the source said.

The Bhopal unit, which is also the mother unit of the Maharatna company, has delivered a profit during a difficult FY16. "The unit recorded a turnover of Rs 3,922 crore which is seven per cent higher than in the previous year. It has also registered a profit of Rs 476 crore," the source said.

The joint venture, according to the source, will take shape by financial year 2019-20. The company is expected to make 1,500 coaches over a period of 15 years, or 100 coaches per year.

"Though other units like Jhansi and Hardwar may also manufacture and supply such systems for metro, the Bhopal has a geographical edge due to its central location. Besides it has an adequate trained workforce, material handling facility and shopfloor. The unit can prune certain existing products and can replace them with the steel coaches," the source further said.

Bhel has supplied motors and other parts to the integral railway coach factory for the Kolkata metro, Diesel Locomotive Works, and Chittranjan Locomotives Works, Varanasi of the Indian railways. It also supplies to various zones of Indian Railways.

Though Bhel's profitability did not meet targets it is mulling diversifying into making panels for solar power plants. "The unit will soon set up a 10 Mw of solar power plant in Bhopal for captive use," the source said.

Clarification:

An earlier version of this article referred to BHEL as a navratna and not a maharatna. The error is regretted.