Proposal for two locomotive units in poll-bound Bihar picks up pace

New Delhi: A 10-year-old proposal to set up two locomotive factories in Bihar may finally be contracted out, a spokesperson of the Indian railways said on Monday.

“According to the bid documents, the winners of the projects will be announced within a month of opening the bids,” the spokesperson said.

The price bids for two locomotive plants—an electrical unit in Madhepura and a diesel unit in Marhowrah—were opened on 31 August and 1 September, respectively, in the presence of the bidders.

The announcement comes ahead of assembly elections in Bihar this year.

Alstom SA has emerged as the lowest bidder for the electrical unit and General Electric Co. (GE) for the diesel unit, according to a report in The Economic Times.

GE, Alstom SA, Bombardier Inc., Siemens AG, and China’s CNR Corp. Ltd and CSR Corp. are the firms vying for the projects.

The railways spokesperson said it was too early to name the winning bids.

“The bids will go through the process of financial evaluation in terms of whether they include all required terms and conditions and then the final winner will be decided,” he added.

The cabinet gave its in-principle approval to the two projects back in 2006 when veteran Bihar politician Lalu Prasad was Union railway minister.

However, it was only in 2009 that the government approved the details of the proposal.

Since then, the two projects have run into controversies and allegations of corruption, and the opening of price bids for the electric engine project has been deferred many times.

Finally, railways minister Suresh Prabhu last year pushed the projects, according to a report in The Economic Times.

It is also believed that Prime Minister Narendra Modi took an interest in the projects as they gel with the government’s Make in India initiative.

Prabhu has been advocating public-private partnerships to modernize the railway network across the country and has appointed a committee headed by D.K. Mittal, a former financial services secretary and currently the mission director for the direct benefit transfer scheme, to identify factors, issues and avenues for improving the financial health of Indian Railways.

The committee has already submitted its report.

If the winners are announced in the given time frame, it will come just before the Bihar assembly elections, due in November. The projects will add to the string of announcements that have been made for Bihar recently by the Bharatiya Janata Party (BJP)-led Central government, including a special package of Rs.1.25 trillion and anotherRs.40,000 crore for existing infrastructure projects.

The BJP’s political rivals are unimpressed.

“If you talk about the BJP’s railway policies in Bihar, you’ll obviously be disappointed. In the past 15 months, this government has announced a number of schemes. These schemes are the same old ones which the BJP presents in a different manner by stopping the ongoing projects. This again shows fake promises of this government. They were not bothered about Bihar until they realized it’s a poll-bound state. Such announcements are their election propaganda,” said Shyam Rajak, a senior leader of the ruling Janata Dal (United) party.

However, Abhaya Agarwal, a partner at EY overseeing the consultancy’s infrastructure practice, said, “It should be looked at as a developmental issue rather than a political issue. The announcements should not be stalled or mired in controversy because of this reason—because the bidding process had been going on for 3-5 years.”

As per the bidding conditions, five of the 800 electric locomotives at the Madhepura unit will be imported, while the remaining 795 will be manufactured over the next 11 years. The Marhowrah factory will manufacture 900 diesel electric locomotives and import 100. The project investment in locomotives will be around Rs.1,200 crore for the electrical unit and Rs.1,000 crore for the diesel unit.

“Alstom Transport confirms that it has submitted an offer for the Madhepura e-loco contract. As per the Request for Proposal, the bids are being evaluated and the preferred bidder should be announced soon,” said Alstom in an official response.

GE said it is unable to share any information at this stage.

Courtesy: LiveMint