After conducting successful trials on the Delhi-Mumbai Rajdhani route, Talgo is keen to manufacture its coaches under the Make in India initiative.
After conducting successful trials on the Delhi-Mumbai Rajdhani route, Talgo is keen to manufacture its coaches under the Make in India initiative. José María de Oriol Fabra, Talgo’s CEO, told FE Online’s Smriti Jain and Arunava Biswas that if Talgo makes its coaches in India, the cost of procurement for Indian Railways would be comparable to that of Shatabdi. He spoke extensively of Talgo’s India plans and revenue potential. Excerpts:
When is Talgo coming to India? Will you lease or Make in India?
We decided to come to India two years ago. The best approach was to convince the government that our technology suits the need of Indian Railways. India is one of the biggest markets worldwide. We haven’t signed a contract yet, but are on track according to our expectations. It is always difficult to penetrate a new market. Our technology is different from conventional ones.
For Indian Railways to have our technology as soon as possible, the only way is to buy or lease existing equipment. We have certain equipment that can adapted to Indian needs. That is the fastest way to have 2-4 train sets in India as soon as possible. But for the long term, we expect Indian Railways to float tenders in which we will participate. If we win, we can start manufacturing here.
Watch: Exclusive Interior Preview Of Talgo’s Train
Are you also open to manufacturing your latest Avril train that can run at a speed of 380 km/hr?
Of course. I don’t know by when Indian Railways will have a dedicated network for high-speed trains, because you need infrastructure. I have heard that certain corridors will be opened. As and when that happens, we would like to participate in the tenders. The main advantage is that our coaches are 25% to 30% lighter than competitors. This lowers energy consumption.
We just bid for a very high-speed train project in Spain, in which we competed with Siemens, Alstom and a host of other companies, and we won. We won on economic and technical parameters. Whenever Indian Railways decides on a tender process for high-speed trains, we will be ready to participate. My opinion is that this will take time, because first you need to put a track in place. This requires a huge amount of funding.
With Hyperloop and Maglevs in focus, where does Talgo see itself fitting in Indian Railways’ long-term plans?
India has a huge rail network, and not all of it can be improved simultaneously. We can provide an enormous advantage with our tilting, light-weight technology. We are not planning to develop a Maglev. For the long-term, we are in talks with Hyperloop. We are developing new future concepts. These technologies will take some years to come. But in India, the traditional network needs to be upgraded first and that is our focus area.
How much would a Talgo train cost to the Indian Railways compared to Shatabdi?
In terms of pricing, it would be similar, if made in India. If we don’t produce in India we will not be competitive. We will go through the tender process, but there are economic and technical parameters involved. Indian Railways may buy a train for the Delhi to Mumbai route that is cheaper than Talgo, but it may not be able to reduce the time by 5 hours, something that we have demonstrated.
What is the revenue potential of the Indian market? Are you open to a PPP model?
It is huge. We know that in order to be successful in India, we need to establish ourselves here. We need to produce as much locally as possible. If we produce our product in Spain, then by the time we offer it to Indian Railways, it is too expensive. Around 1,000 cars will be enough to start an establishment here. We are open to either establishing a plant from scratch, or partnering with an existing player. The market in India is huge, to expect a demand of 5,000 to 10,000 cars over the coming years doesn’t seem unrealistic. We are open to the option of PPP as well.
How do you plan to modify Talgo trains for Indian conditions?
There are not many modifications needed. There are only three aspects that we need to modify, that is the height, toilet and platform distance. This is not something that is difficult to achieve. It is important to mention that we have the same gauge, or very very similar to the one in India. In the beginning it would be a chair car, but later on, if Indian Railways wants sleeper cars, that can also be made. Changing the interior is not a problem.
How has your experience been in terms of ease of doing business in India?
We would say that it has been positive. I think it is a combination of two factors, we decided to go through a path of trying to demonstrate to Indian Railways the advantage of our technology by testing it here. What I learnt recently is that we have been quite successful in persuading the government and authority. It took us one year to do that, which I think is quite reasonable. We are quite happy with the evolution and our experience during this trial test in a short period of time. It is also important to mention that we decided to pay all the costs linked to this test trial which was something innovative to Indian Railways. Up until now we are happy with our experience, but it is just that we have still not signed any contract. Everything that we have done here till now has been to invest because we believe in this market.
How much have you invested?
We have invested a nice figure, but I prefer not to disclose the number. Imagine the cost of shipping a train from Spain to here, with mechanics. The train was here for 6 months. So it is quite an investment for us. But again, I don’t think we would do that kind of investment in a market which we do not find attractive. It is easy to justify such an investment for a market like India.
Have you ever done this for another country before?
We have done this in other countries. In some places they pay for us to bring and run the train for trial runs, in others we have paid ourselves. We do this because our technology is unique and it is difficult to penetrate a new market. It is difficult to explain why our technology is different from others. Demonstrating its use helps us explain how the technology works. Many of the people that we spoke to before found it difficult to believe that we will be able to achieve such a reduction in journey time.
What do you think has been the biggest achievement of Railway Minister Suresh Prabhu?
I think he has a lot of challenges, not only him, but anyone who heads Indian Railways. What is positive is, and this is something I also learnt about a year ago, is the willingness of the government to invest heavily on railways. I think that is very important. The willingness to invest is the best thing that I have heard.