Joint Venture of Railways with Foreign Companies

Ministry of Railways Agreements have been signed with ALSTOM (France) and General Electric (USA) for manufacturing and maintenance of electric and diesel locomotives. As per contract 800 electric locomotives and 1000 diesel locomotives are to be manufactured and supplied from the factory set up by the companies at Madhepura (Bihar) and Marhowra (Bihar) respectively over a period of 11 years. Two Joint Venture (JV) companies have been set up for this purpose. Ministry of Railways is a 26% stakeholder in these two JV companies. The companies would also undertake maintenance/supervision of the first 500 locomotives by setting up maintenance facilities at Saharanpur, Nagpur, Roza and Ghandhidham.

The project envisages transfer of technology for maintenance to Indian Railway staff in terms of providing benchmarking of maintenance facilities as well as global practices in undertaking maintenance of these locomotives. The maintenance facilities would revert back to the Indian Railways on completion of the maintenance obligations following which the maintenance would be carried out by Indian Railways staff. These projects were approved by the Cabinet in 2010 and subsequently the bidding documents were also approved by the Cabinet in 2014. The companies were selected through an international competitive bidding process. Compliance to the requirement of national security and public interest is a part of the eligibility criteria.

The Department of Industrial Policy and Promotion (DIPP) of Government of India had issued the consolidated Foreign Direct Investment (FDI) Policy which allows FDI in Railway Infrastructure sector on automatic route in the areas namely :-

(i) Suburban corridor projects through PPP;

(ii) High speed train project;

(iii) Dedicated freight lines;

(iv) Rolling stock including train sets and locomotive/coaches manufacturing and maintenance facilities;

(v) Railway Electrification;

(vi) Signalling systems;

(vii) Passenger terminals;

(viii)Infrastructure in industrial part pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line; and

(ix) Mass Rapid Transport Systems.

Further, the Indian Railways undertakes outsourcing of certain facilities like cleaning, pay and use toilets, retiring rooms, parking etc. on need based manner to improve efficiency.

Interest of the railway staff is taken into consideration while outsourcing.

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