Lalu knocks on CCEA doors for new projects in Bihar, UP

New Delhi, Nov 27 | Updated: Nov 28 2006, 07:48am hrs
After winning the debate over financing of the dedicated freight corridor, the railway ministry has seemingly swung in its favour a proposed project for building a rail coach and a diesel loco factory. The ministry has circulated a note to the Cabinet Committee on Economic Affairs for permission to go ahead with the projects, estimated to cost Rs 5,000 crore.

The railways are now hopeful of getting a go-ahead for the two units in the winter session of Parliament. It wills proceed with setting up the factories this fiscal.

While the coach factory is to be set up in Rai Bareli, the diesel loco unit is to be set up in Chapra.

Recently, the railways faced criticism from the Planning Commission while seeking approval in principle from it for the two projects. The Commission was of the view that setting up a third coach factory at Rae Bareli was not financially viable as the railways already had two factories in Chennai and Kapurthala. Currently, the two factories produce 2,300 coaches annually and will be able to meet the demand of nearly 4,550 coaches by the end of the Eleventh Plan period.

The railways have, however, been unable to get an approval in principle from the Plan panel for its proposed wheel manufacturing unit in Marhaura, near Chapra. While the the Commission feels that the factory will not be financially viable, the railways are sticking to their guns. Sources said the Planning Commission was likely to stay firm on the issue.

But the railway ministry has gone ahead and is in the process of appointing a consultant for the project. It is keen to use private investment for the two units and is engaged in initial talks with various companies. The consultant will prepare a final business plan.