Bihar locomotive projects to be kickstarted next month

New Delhi: Railways has decided to call financial bids for key public-private partnership (PPP) projects to manufacture locomotives next month, the latest effort to facilitate setting up of factories.

The national transporter will call financial bids for diesel locomotive at Marhaura in Bihar on May 10, while the bids for the electric locomotive unit at Madhepura in Bihar will be submitted on May 11. Incidentally, the bids for the projects have been postponed more than thrice since October 2010.

The two units, to be set up in joint venture at a combined cost of close to R3,300 crore, were announced by previous railway minister Lalu Prasad with an aim to develop the backward areas of Bihar.

However, the present railway ministry and Trinamool Congress chief Mamata Banerjee thinks that the bid documents for the projects were tilted in favour of the shortlisted bidders, and hence, it is in the process of changing the same.

The railway board proposes to instil a clause on technology transfer from private firms for maintenance of the locomotives. It also wants to give railways the first right of refusal in case the private partner wants to exit the project.

At present, the projects are to be set up with 26% equity from railways while the balance will come from the private companies.

“We will have a pre-bid meeting before calling the bids to discuss the changes that we think are suitable,” a senior official in railway ministry told FE.

However, other officials in the ministry raised doubts on railways’ ability to call the bids on the decided dates. “Bidders had asked certain questions in the last meeting in 2010, but railways has still not answered those questions. On the contrary, it is about to change the bid documents. In this situation, I don’t think that bidders will come forward to submit bids on the given dates,” another official said.

Global engineering firms GE, Alstom, Siemens and Bombardier are the four shortlisted bidders for Madhepura plant. For the Marhaura factory, railways has shortlisted GE and Electro Motive Diesel.

The two projects are first of their size projects taken up by railways in PPP mode and they are considered to be a model for other capacity expansion projects planned like a locomotive component unit at Dankuni and a coach unit at Kanchrapara, both in West Bengal. Railways has envisioned procuring 5,334 diesel engines and 4,281 electric engines by year 2020.