After making inroads into the energy market, French engineering and transport major Alstom now plans to give a major push to its transport business in India. The Narendra Modi government’s plans to develop 100 smart cities and high speed train corridors have raised the company’s ambitions in India. In an interview with FE’s Subhash Narayan, Alstom Transport India managing director Bharat Salhotra talks about the new opportunities for the company. Excerpts:
Do you think high speed train projects are feasible for a price-sensitive country like India?
High speed trains are definitely feasible. But to attain economies of scale, the government should not be talking about developing just one section but; say, 15. That is really the critical part, because when you talk about 15 sections or a larger number of sections, an entire ecosystem of suppliers and contractors starts to get developed. But if you are talking about one section, the cost competitiveness may not be much. And in a country like India, the focus should be on bringing down the cost of transportation. This can only be achieved through volumes.
Is this the reason why Chinese high speed trains cost the lowest?
Yes, it is and the costs are lowered only when you have large volumes. China has achieved R89 crore per kilometre for high speed trains, with a speed of 160 to 200 km/hour. If we talk about 350 km/hour speed, the cost could go up to R130-140 crore. Smaller networks would be expensive as the fixed cost for the project remains the same whether you manufacture five trains or you manufacture 500 trains.
How geared is Alstom for bidding of these projects in the face of stiff competition from the Chinese and the Japanese?
Technologically Alstom is a global leader in high speed rail. We have immense capability and competence to deliver these projects and have already running systems in several countries in Europe. When it comes to financing, it’s different, because we are an engineering company. We can design products, deliver projects, maintain them, even operate, but bringing in the funding, that’s a different chapter. Ultimately, a project has to be based on a sustainable model.
Do you also think that higher volumes would propel companies like Alstom to consider setting up a manufacturing base here for high speed train?
Transfer of technology, transfer of manufacturing, transfer of engineering skill-sets, all that happens when you have large volumes, unless there is a plan