New Delhi: Indian Railways has started negotiations with public sector Steel Authority of India Ltd (SAIL) for a Cabinet-approved project to construct a coach manufacturing factory at Kanchrapara. In what amounts to a deviation from the Cabinet approval, the national transporter has suggested a new shareholding ratio for the unit, wherein the Railways will own only 10% and SAIL 90%. In 2010, the Cabinet had approved a 26% ownership by the Railways.

Clauses on price discovery, procurement and maintenance are also to be discussed with SAIL. The project that got Cabinet nod included setting of the factory and procurement of 5,000 coaches over 10 years. The overall cost of setting up the factory and procurement thereafter is close to R11,000 crore. However, all that is to change as the Railways and SAIL are close to signing a memorandum of understanding on the project.

Senior government officials told FE that the MoU was to be...