Two Chinese companies back out of locomotives projects in Bihar

New Delhi: Two Chinese companies, which had bid to set up two modern locomotive factories in Bihar, are now out of the race with Railways finalising the request for qualification and shortlisting global bidders.

CNR Corporation and CSR Corporation, both based in China, had submitted qualifying bids for the electric locomotive factory at Madhepura and diesel locomotive factory at Marwhora worth Rs 1,300 crore each.

After considerable delays, re-thinking and prolonged due diligence amid repeated revision of bidding documents, Railways has at last finalised the request for qualification (RFQ) for both the plants and rejected the two Chinese companies’ bids as they did not meet the criteria.

As for the diesel locomotive factory, GE and Electro Motive Diesel have been shortlisted, while Alstom, Siemens, GE and Bombardier got the nod for electric locomotive factory. The Chinese companies did not qualify and that is why they could not be shortlisted for RFQ in both the projects, said a senior Railway Ministry official.

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The next step is the financial bid and request for proposal (RFP) is likely to be issued soon, he said. Railways has to provide land on 30 years lease and factories are to be set up within three years of awarding the contract.

While Madhepura factory is expected to manufacture 12,000 HP electric locomotives, Marwhora plant will produce 4500 HP and 6,000 HP diesel locomotives using state-of-the-art technology.

Though the Cabinet had given in-principle approval to the two projects in 2006, the proposal courted controversy amid allegation of corruption. As a result of which the project moved at a snail’s pace and price bids were often deferred.

Scope of maintenance work for the proposed factories was revised significantly and changed bid documents were approved by the Cabinet on January 20 and subsequently RFQ for both plants were finalised now, the official said.

In the course of about 10 years after commissioning, the proposed Marwhora plant is expected to manufacture about 1,000 diesel-electric locomotives, 100 locomotives annually.

While 700 diesel locomotives will be equipped with 4,500 horse power (HP), 300 diesel locomotives will be manufactured with 6,000 HP, said the official.

The Madhepura factory is projected to complete some 800 electric locomotives over the same period.

With the government allowing 100 per cent FDI in rail sector, setting up of the two factories is crucial for Railways to give a boost to infrastructure sector.

PTI