Railways' PPP projects on track, bids to open soon

Winning bidder will have the option of forming a 74:26 joint venture with the railways for the project

Bids for the proposed Rs 1,290-crore Madhepura electric locomotive factory in Bihar will be opened next week, say railway ministry officials.

Siemens, Alstom, Bombardier and GE Transportation are among the short-listed firms, say officials. The award of the tender, an official involved in the planning of public-private-partnership (PPP) projects told Business Standard, should be made by December and physical work to commence by February-March 2011.

The factory, first announced by then minister Lalu Prasad in the 2007-08 Railway Budget, will be undertaken on a Build, Own and Operate basis. The winning bidder will have the option of forming a 74:26 joint venture with the railways for the project. Operating under a procurement-cum-maintenance contract, the facility is expected to manufacture about 120 locomotives every year, over a period of 10 years. The railways’ commitment is to take what is produced for those 10 years.

Work on the proposed Rs 2,052-crore Marhowra diesel locomotive factory, also in Bihar, is also progressing. GE Transportation and Electro-Motive Diesel have shown interest and their proposals are being evaluated.

“Assuming the two firms qualify and are shortlisted, the bid documents should be given to them by early October. On our part, we will hurry up the bid evaluation process. We hope this project can be awarded by May-June (2011),” the official said.

The facility will be executed through a joint venture company (JVC) in which the railways will hold 26 per cent equity. Land for the factory is being acquired by them and woud be leased to the JVC for about 35 years.

The railways will procure the diesel locomotives produced from the new factory for the first 10 years, expected to be 100.

Bengal projects
Manufacturing PPP projects in West Bengal, announced by the present minister, Mamata Banerjee, have also evinced interest from international players. Bids for a couple of these ventures will be opened within the next four months.

Bombardier, Alstom, Siemens, Kawasaki, CAF Spain, Stadler, Hitachi and Rotem have been shortlisted for setting up a rail coach factory at Kanchrapara near Kolkata. The bids for it are expected to be opened in January 2011.

The facility is expected to supply 500 electric multiple units, mainline EMUs and metro coaches per annum, over a period of 10 years. The indicative cost of the factory is Rs 1,000 crore.

Four global firms have also been shortlisted for the proposed electric loco-assembly and ancillary unit of Chittaranjan Locomotive Works at Dankuni on the outskirts of Kolkata, ministry officials said. Siemens, GE, Bombardier and Alstom are in the race for the Rs 860-crore project, bids for which will be opened in early November.

“We will try to award the contract for this as soon as possible. Instead of the usual 90 days, we will try and do this in about 30 days.

Work on the Dankuni project has started. The construction of new quarters has begun, land is being prepared and the roads have already been built,” an official said.