With one taker for Palakkad coach project, Rlys may relax conditions

Written by Rajat Arora | New Delhi | Updated: Dec 20 2013, 09:48am hrs
Indian Railways plan to build a coach factory on the public-

private partnership (PPP) mode at Palakkad in Kerala has hit a hurdle with only one company CSR China evincing interest in the R600-crore project.

With only one bidder likely after the close of the request for qualification round, the railways may have to look at easing the conditions to make the project more attractive to investors. The factory is proposed to be set up through a joint venture company (JVC) to be formed with a private sector partner selected through international competitive bidding. It will produce 400 stainless steel and aluminum coaches in a year. The estimated cost is said to be around R600 crore.

Companies like Siemens and BEML had also bought the request for qualifications forms, but they did not apply for the project. Only CSR Corp has applied for the project, a railway board official said.

The national transporter issued a global RFQ in September for the project and was expecting to award it within the fiscal. It was expecting global players such as Alstom, Siemens, Bombardier and Hitachi to come forward for the project.

The final shortlisting was to be done in December. We have to see whether we'll go ahead with just one player or not," the railway board official added.

The project would be set up by the JVC in which the railways would hold 26% equity, subject to a cap of R60 crore. However, irrespective of the percentage of equity the railways holds, its rights in the company would be as if it has invested 26%.

The railways has taken over 230.10 acres for its coach factory at Kanjikode in Palakkad.

At present, the demand for railway coaches is around 5,500 a year whereas the supply is around 4,000 coaches.