India’s largest power equipment maker Bharat Heavy Electricals Ltd (Bhel) plans to supply 1,000 railway locomotives for the Indian Railways’ marquee project, the dedicated freight corridor (DFC), in partnership with international firms, said a top official.
Bhel is talking with French train maker Alstom, German rail transit solutions firm Bombardier Transportation GmbH and a Japanese consortium comprising Itochu Corp., Mitsubishi Corp. and Toshiba Corp. in this regard.
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“DFC will be a huge opportunity area for us. We are in talks with these companies for supplying locomotives for the huge order when it comes up. It may be a collaborative JV (joint venture), the investments for which will have to be worked out,” said B.P. Rao, Bhel’s director of industrial systems and products.
Bhel has also initiated talks with Alstom, telecom multinational Thelus Corp., and Mitsubishi to enter the electronic signalling business.
“Since the Indian Railways is focusing on safety, it will lead to a huge demand for signalling equipment, which we plan to tap,” said Rao.
A host of international rail equipment firms such as Siemens Transportation Systems Group and GE Transportation, a unit of General Electric Co., are looking for Indian partners ahead of bidding for DFC projects that involves building 2,700km of rail tracks between New Delhi and Mumbai, and Ludhiana in Punjab and Kolkata, estimated to cost Rs28,000 crore.
“While the power business will continue to be the most important constituent of Bhel’s portfolio in the coming years, industry sectors such as railway transportation are expected to expand in a big way,” said K. Ravi Kumar, Bhel’s chairman and managing director.
Power sector analysts say that focusing on locomotive manufacturing makes good business sense for Bhel as it offers a good avenue for hedging against any abrupt change in business prospects in the power sector.