Proposal to shut Bihar locomotive project a jolt to Make in India

The reported proposal being debated by Indian Railways (IR) to wind up the Marhowra (Bihar) diesel locomotive factory, to come up in partnership with General Electric (GE), would be curtains for one of the largest Make In India projects.

It might also cast a shadow on investor sentiment, with the project’s huge foreign direct investment component. 

According to media reports, the plan to shutter the project was mooted at a review meeting by Railways Minister Piyush Goyal on September 7, citing the focus on electrification. The project was once touted as the largest in the 100-year history of GE in India.  

It was in November 2015, just after the Bihar Assembly election, that IR had awarded contracts to GE and Alstom to set up diesel and electric locomotive factories at Marhowra and Madhepura, which together were expected to attract Rs 40,000-crore investment to the state. 

Investment at the Marhowra factory was calculated at a little above Rs 2,000 crore. It was to manufacture at least 1,000 diesel locomotives over 10 years. 

The project was conceptualised during the tenure of Lalu Prasad as railways minister in 2007. It took eight years for the contracts to be awarded. By the agreement, the railways was to have 26 per cent stake in the project and would have provided land; the foreign companies would have the remaining 74 per cent stake. 

The first 100 locomotives were to be imported and rest a showpiece of Make In India. The project was planned for 4,500 horsepower (hp) and 6,000 hp diesel locos. GE has said the project work is on.