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Foreign investment flows into Indian rail as GE & Alstom deals booked.

Posted by Luke Upton on Nov 11, 2015

GE_Rail_IndiaGovernment plans to modernize the vast Indian rail network have received two major boosts this week with significant contracts given to Alstom and GE to supply new locomotives. These are the largest ever deals penned by foreign firms for Indian rail contracts. And follows the opening up of the network last year with the passing of legislation allowing foreign direct investment (FDI) in the railway sector for the first time.

French engineering company Alstom has won a contract worth around $3 billion to supply Indian Railways with 800 electric locomotives and set up a local manufacturing plant, a railways spokesman said on Tuesday. Whilst this week also saw GE announce it will invest $200 million to develop and supply Indian Railways with 1,000 diesel locomotives and secured a locomotive supply and maintenance contract, worth approximately $2.6 billion over 11 years.

The first contract this week is from Alstom has received a Letter of Award from the Ministry of Railways to supply Indian Railways with 800 double section freight electric locomotives with associated long-term maintenance. The total contract is worth above €3 billion. This project includes the set-up of a plant at Madhepura (Bihar state) and two maintenance depots at Saharanpur (Uttar Pradesh state) and Nagpur (Maharashtra state). The delivery of the locomotives will spread between 2018 and 2028.

The Prima locomotive for Indian Railways will be 9,000 kW at the wheel rim and will run at a speed up to 120 km/h. This contract positions Alstom as the number one on heavy-haul electric locomotives segment with now over 1,200 double locomotives ordered for the last decad

This project, one of the biggest in Alstom’s history, is a breakthrough for our presence in India and demonstrates the success of our global customer proximity strategy. We are extremely proud to be partnering with Indian Railways for this ambitious project which will be a game changer for Indian railway sector” declared Henri PouRail Asia Magazine (SmartRail World)part-Lafarge, Executive Vice President, Alstom. 

Whilst this week has also see GE announce it will invest $200 million to develop and supply Indian Railways with 1,000 diesel locomotives. The company received a Letter of Award from the Ministry of Railways for a locomotive supply and maintenance contract, worth approximately $2.6 billion over 11 years.

The largest deal in GE’s 100-year history in India, the company will build a diesel locomotive manufacturing facility in Marhowra district in the Indian state of Bihar, as well as maintenance sheds at Bhatinda in Punjab and Gandhidham in Gujarat. This effort is a major boost to India’s railway modernization efforts, and will provide skill development opportunities for local talent.

“This infrastructure project is further evidence of India’s position as a growth engine for Asia,” said GE Chairman and CEO Jeff Immelt. “It is a major advancement and milestone for India and for GE, and a symbol of our commitment and support of the ‘Make in India’ initiative.”

Last year, the Government of India allowed 100 percent Foreign Direct Investment (FDI) in the railway sector. The Marhowra diesel locomotive project marks one of the first major instances of FDI in enhancing India’s rail locomotive capacity.

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Topics: Rolling Stock, projects

Luke Upton

Written by Luke Upton

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