Proposal for two loco factories in Bihar resurrected

Government today resurrected a seven-year old proposal to set up two modern locomotive factories in Bihar, scrapping a tendering exercise initiated earlier and deciding to have fresh bidding.
The proposal for Rs 1293.57 crore modern electric locomotive factory at Madhepura and Rs 2052.58 crore diesel locomotive factory at Marhowra was finalised in 2006-07 during the then Railway Minister Lalu Prasad.
But the proposal faced a number of hurdles, particularly on account of maintenance contract, and was virtually abandoned.
Finance Minister P Chidambaram said the Union Cabinet today decided to launch fresh tendering process from next week for the two factories.

"We are happy to resurrect this... The project is already delayed," he told reporters after the Cabinet meeting.
He said the Request for Qualification (RFQ) will be issued next week and the Request for Proposals (RFP) will be issued in July.

Six leading companies - two for Marhowra and four for Madhepura - were shortlisted in 2010 through pre-qualification bidding process.
However, the projects got delayed for various reasons and finally all issues were resolved and the Cabinet approved the proposal for setting up the factories in joint venture with locomotive manufacturers to be selected through a fresh bidding process with limited equity contribution from railways.

Since railways have made many changes in the scope for maintenance contract in the bidding documents, it was necessary to go for fress tender with changed terms and conditions.
Now there will be fresh bid for shortlisting the bidders for the projects," said a senior Railway Ministry official adding "since there were changes in various clauses fresh bidding documents will be prepared."
Earlier, it was the manufacturer's responsibility to maintain all locomotives but now it was restricted to 250 locomotives each for diesel and electric and rest will be maintained railways itself.