New Delhi: The Railway Board is likely to resend a proposal to new railway minister Mamata Banerjee to consider setting up two locomotive factories—that were cleared as departmental units ahead of elections—under the joint venture route.
Any change from departmental unit to the joint venture route will require approval from the new railway minister and probably also from the cabinet, said a railway official, declining to be named. Banerjee took charge on 26 May.
The previous cabinet had, in the run-up to the elections, approved the projects as a railways project rather than inviting the private sector to form joint ventures, as had originally been planned.
Mint had reported on 17 February that the two projects received only one bid each, even as then railway minister Lalu Prasad looked to hasten the projects before the general election started on 16 April. General Electric Co. bid for the diesel locomotive factory and Siemens AG for the electric locomotive one. The two projects were to be located in Prasad’s home state of Bihar.
“They will have to,” said another government official when asked about the possibility of the railways restarting the process for a joint venture. “They (railways) don’t have either the money or the expertise.” He also didn’t want to be named.
The shortlisted companies that failed to submit bids were Bombardier Transportation India Ltd, a unit of Canada’s Bombardier Inc., and France’s Alstom SA for the electric locomotive project and EMD Locomotive Technologies Pvt. Ltd, a subsidiary of the US-based Electro-Motive Diesels Inc., for the diesel project.
“The problems with the railways is, in the absence of a PPP (public-private partnership policy) policy, if you come to such a cul-de-sac, you don’t know how to go forward..,” said Siddharth Das, national public-private partnership practice leader for audit and consulting firm Ernst and Young.