Proposed PPP loco factories in Bihar unlikely soon

Written by Rajat Arora | New Delhi | Updated: Feb 28 2013, 10:19am hrs
Indian Railways' plan of building two loco factories in Bihar on a public-private partnership model, which has failed to catch any steam till date, is unlikely to take off anytime soon.

Sources in the know have told FE that the project of coming up with rail factories in Bihar on PPP basis has turned too complex for rail minister Pawan Bansal to take a call anytime soon. The issue has been dealt by five different rail ministers since 2007, when the factories were announced by the then rail minister Lalu Prasad Yadav. The due diligence on matter is going on but the issue is too complex for the rail minister to take a call at present, a source told FE.

Recently, there have been reports in a section of media that top officials of Railway Board and the finance ministry have objected to the proposals of Plan commission to change the Cabinet-approved bidding process and supply conditions for these two pending projects.

The diesel loco factory at Marowhra, Bihar, and electric loco unit at Madhepura have been planned on the PPP model at an investment of R2,000 crore and R1,500 crore, respectively.

The projects have been pending for the last four years because of a deep division of opinion within the railways on whether to build them on their own or through the PPP mode. American giants such as GE and EMD have been shortlisted for the projects, but there is no time line set yet for awarding the projects.

There were issues related to technology transfer, assured off-take of locomotives (a demand of private players), duration of maintenance of locos by the companies and land transfer. All issues are being resolved, said a rail board official.