The Railway Ministry has given green signal to the creation of a Special Purpose Vehicle (SPV), to bring in world-class technologies to set up locomotive, coach and wheel factories in India. To manufacture rolling stock in the country, the SPV would work in a joint venture with private companies.
The Railway Ministry has been approved the draft note and the draft has granted positive views from other ministries such as Finance Ministry and Department of Personnel and Training (DoPT). Now, the ministry is planning to take the proposal to the Union Cabinet for further discussion.
Indian Railways has planned to establish a Rail Coach Factory at Rae Bareli, a diesel locomotive factory at Maraura, a Rail Wheel Factory at Chhapra and an electric locomotive factory but the venue for it has still not been finalized.
The diesel loco factory needs Rs 2,000 crores, the Rae Bareli factory requires Rs 1,550 crores, the electric loco factory needs Rs 1,300 crores and the wheel factory needs investments of Rs 878 crores.
On the other hand, the proposed two loco factories are projected to produce 150 locomotives per year. The coach factory would shell out 1,100 coaches per year while the projected capacity of the wheel factory is about lakh wheels per year.
According to the report, the Railway Minister was not prepared for the partnerships with private players on its own. For that purpose and to bring world’s best technologies to Indian Railways, ministry decided to create SPV to enter into joint ventures with private technology providers.
The Indian Express has reported that the Railways agreed to hold a 26 per cent stake in these joint ventures. The ministry would engage a consultant that would help it to make a strategy for the establishments of the factories. The consultant would also help the ministry to select the best joint venture partners.
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