Tata group eyes railway freight corridor project

Tata group eyes railway freight corridor project

Mumbai: Looking to go beyond airports and ports, the Tata group of companies, one of the largest business conglomerates, with total revenues of more than $22 billion (Rs86,680 crore), is eyeing the proposed Rs50,000 crore dedicated freight corridor project by the Indian Railways.

Tata group is in talks with Japan’s Mitsubishi Corp. for a possible alliance, in which the latter would help Tata to source rail wagons, engines and other related infrastructure for the proposed project.

“We are keen to participate in this project. Talks with Mitsubishi are in the preliminary stage. We hope that they can help in getting rolling stocks," said a senior Tata group executive who didn’t want to be named. “We are looking at offering complete solutions for rail infrastructure."

Dedicated freight corridors are exclusive railway lines for cargo-laden trains. At present, freight trains and passenger trains use the same tracks, resulting in delays and added costs. The railways has proposed two dedicated freight corridors—the eastern corridor on the New Delhi-Kolkata route of 1,279km, and the western corridor of 1,483km between Mumbai and New Delhi. A senior executive at Mitsubishi Corp. India Pvt. Ltd declined to comment.

A host of international rail equipment firms are eyeing Indian partners in a bid to go after the large railway project.

Tata Realty and Infrastructure Ltd (Tril), a 100% subsidiary of Tata Sons, will be executing the project for the group. Tril, the real estate arm of the Tata group, focuses on long- and short-term infrastructure projects. It has previously teamed up with Changi Airport International for developing new and non-metro airports in India.

Tata Steel Ltd, another group company, has formed a 50:50 joint venture with Larsen & Toubro Ltd (L&T) for floating Dhamra Port Co. Ltd to develop an all-weather deep port north of the mouth of the Dhamra river in Orissa.

Recently, Japan International Cooperation Agency, an advisory body, submitted a final study report on dedicated freight corridors to the railway ministry. The agency study is the result of an initiative that originated in April 2005 at a joint declaration by then prime ministers of India and Japan.

The corridor is one of the largest cargo rail and train projects and is drawing significant interest from domestic as well as international infrastructure companies. “We are certainly interested in this project," said a senior executive of L&T who is not authorized to speak to the media. “We are examining the areas that we could participate in. This will be followed by teaming up with an international partner."

Bombardier Transportation, the rail equipment unit of the Bombardier group, is also in talks with the railways to participate in the freight project. It is currently scouting for an Indian partner.

“Bombardier is open to an association with the Indian Railways under private-public partnership approach to create a manufacturing facility to produce Bombardier locomotives in India for dedicated freight corridor," said Luis Romos, a spokesman for the firm.

Bombardier, which had won a contract to supply 340 rail cars for the Delhi Metro Rail Corp. Ltd for its rail transportation project, is setting up a manufacturing facility in Baroda at an estimated initial investment of €25 million (Rs142 crore). “Though it is meant for producing 340 rail cars for this specified project, this can be expanded further to meet other requirements of upcoming rail projects," said Romos.

Bombardier has recently initiated preliminary talks with New Delhi-based real estate developer DLF Group to bid for the upcoming metro rail project in Hyderabad.

Other international transport infrastructure majors such as Siemens AG, Itochu Corp., GE Transportation, a unit of GE Corp. and France’s Alstom are also holding preliminary talks with possible Indian partners and government for this project.

Cargo trains currently handle 800 million tonnes annually. This figure is expected to increase by 25% in the coming years.