Special Purpose Vehicle for manufacturing of train wheels! Know all about this in detail

For manufacturing of train wheels, a consortium of Titagarh Wagons and Ramkrishna Forgings will form a special purpose vehicle (SPV), an official said on Wednesday. At Rs 1,000 crore, a greenfield plant for making train wheels will come up.

The development has come after the consortium emerged as the lowest bidder for the tender of the Railways, reported news agency PTI. The Indian Railways had floated the tender. In the country, it invited bids for setting up a wheel manufacturing plant. To reduce its dependence on imports, there is an assured annual offtake of 80,000 wheels for the next 20 years.

The consortium put in a bold bid of Rs 12,226 crore. This left the other competitors behind by a huge margin, the official said.

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“Our consortium has emerged as the lowest bidder for the tender of wheels,” said Titagarh Wagons vice-chairman and managing director, Umesh Chowdhary, and added that the project will go a long way in making India self-reliant with train wheels, which are mostly imported.

After receiving the receipt of the Letter of Award (LOA) for the contract, the SPV formation process will commence.

After discussions with Ramkrishna Forgings, the location of the project will be determined. It will depend on many factors like the market, raw materials, closeness to the port, and other project-related aspects.

Reportedly, the shareholding pattern between both companies will be equal. Officials informed that both companies are listed entities. They will need clearance from their board members. 

(With inputs from PTI)