The government’s plans to both create investment in Bihar ahead of the elections as well as create more competition in the Railways got a boost with French major Alstom emerging as the lowest bidder for the production of electric locomotives in Madhepura. Sources say the bid was for under Rs 30 crore each, taking the size of the contract to Rs 25,000 crore over 10 years. Apart from manufacturing 80 locomotives a year, the contract envisages maintenance for the locomotives for a period of 12 years. Setting up the factory is likely to cost around Rs 4,000-5,000 crore. FE was the first to report the financial bids on Monday, but exact details of the quotes were not known yesterday.
The bid is much lower than what the Railways had envisaged. In 2009, for instance, the Railways internal estimate was that a bid of around Rs 28 crore would be acceptable.
The government has been trying to set up the factory since 2005, but has been unsuccessful so far. In 2008, when the final groundwork was done and the bids called, vested interests in the Railways managed to scuttle the project on grounds there were too few biddders.
Three global companies; Alstom, Bombardier and Siemens had been shortlisted for the financial bid which opened on Monday.
The financial bid for the Marhora diesel locomotive plant is going to open today with GE and EMD being the shortlisted candidates. The Marhora plant is expected to manufacture about 1,000 diesel locomotives in ten years, that is 100 locomotives annually.
