India, Russia spar over control of rail joint venture for making 120 Vande Bharat trains

Money matters and friendships don’t generally go well together. India and all-weather ally Russia are sparring over the control of a rail joint venture that has bagged the contract for manufacturing 120 Vande Bharat trains and their maintenance for 35 years. Metrowagonmash, part of Transmashholding, Russia’s largest transport engineering company, in partnership with Indian public sector undertaking Rail Vikas Nigam Ltd (RVNL) had bagged an approximately Rs 30,000-crore contract. While RVNL owns 20 per cent and Metrowagonmash 80 per cent of the company that won the contract, RVNL now wants a majority share of 69 per cent, leaving 26 per cent for Metrowagonmash. According to reports, RVNL also wants to include a third partner, Locomotive Electronic Systems (LES) with 5 per cent share. In a letter to Metrowagonmash, dated April 25, 2023, RVNL said it “has incorporated a fully owned private company by the name of Kinet Railway Solutions Ltd (KRSL)." The letter further stated this company will act as the SPV (special purpose vehicle) that will sign the Manufacturing-cum-Maintenance Agreement (MCMA) with the Ministry of Railways and thereby, implement the project. The RVNL further said being a government company it was better placed to handle issues like getting clearances and engaging local manpower. “Given the present geo-political situation and the fact that the RVNL is a trustworthy public sector unit having robust standing with public financial institutions, it will be easier for the SPV to mobilise funding from the domestic market at the most competitive rates,” RVNL said in its letter. “It will be a win-win situation for all partners if RVNL plays the primary role in this initiative…” the PSU said. RVNL asked Metrowagonmash to provide its approval for the proposed shareholding, but it protested and took up the matter with the Russian government. A Note Verbale was then sent by the trade representative of the Russian Federation to the Indian government of India on 8 May asking it to direct RVNL to stick to the original contract. As per a report by New Indian Express, the conflict over the issue between the two companies is continuing and the matter is now likely to be settled at the top level of the two governments. Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.