Mumbai: Indian wagonmaker Titagarh Wagons Ltd’s plans to set up a joint venture with a Japanese firm will take longer than expected due to the massive earthquake that rocked Japan earlier this month, a senior official said.
Titagarh has signed a memorandum of understanding with Japan’s Kawada Industries Inc to manufacture steel bridges in India. The two firms plan to make two-lane modular bridges with steel composite decking, according to Titagarh Wagons’ website.
“The JV would be subject to a preliminary study getting completed. That is underway. And now with the current situation in Japan things will be deferred to an extent as they will have a lot of rebuilding work in Japan,” Titagarh Wagons’ Vice Chairman Umesh Chowdhary told Reuters on Monday.
He did not give a timeline for the venture to become operational.
“The joint venture agreement has not yet been signed. It will take a little time”.
To take advantage of India’s increasing demand for metro coaches, Titagarh has teamed up with another Japanese metro coach maker to bid for such orders.
“We are in a consortium with a Japan firm and we will bid for tenders as and when they come up,” Chowdhary said. He declined to name the Japanese firm.
Indian Railways has earmarked an investment of $12.68 billion in 2011-12 for modernise its creaky infrastructure and expand capacity. It has proposed to set up two wagon units with private partners.
The Railways has estimated the total public-private partnership investment in India at Rs1,526 crore in 2011-12.
Titagarh, which gets the bulk of its revenues from the Indian Railways, expects a tender for 18,000 wagons to be published within the next one or two months, he said.
The firm has a capacity to make about 5,000 wagons annually. Its unit Cimmco is expected to make another 2,000 wagons in 2011-12.
Orders from the private sector have not yet seen an uptick he said.
“Private sector demand has not yet picked up but railway demand looks healthy,” he said.
Titagarh’s JV with US-based FreightCar America to make aluminium rail cars — lighter wagons with more pay load — for the local market is yet to start operations due to limited enthusiasm from the Railways, he said.
“The designing has been done, but the issue is that this was a new concept and until the concept picks up, it does not make sense to go into manufacturing.”
Kolkata-based Titagarh, which had acquired the assets of France’s IGF Industries- Arbel Fauvet Rail last July, is open to more such overseas acquisitions, but no deal has been finalised yet, he said.
At 1:16 p.m., Titagarh Wagons shares were down 1.12% at Rs308.85 in a choppy Mumbai market.