GE wins $2.6 billion order to supply 1,000 diesel locomotives to Indian Railways

[Juggernautjatt]

NEW DELHI: General Electric has won a $2.6 billion (Rs 17,250 crore) order, the biggest in its over 100-year history in India, to supply Indian Railways 1,000 diesel locomotives over 11 years. Under this, the US-based conglomerate will invest $200 million to build local manufacturing and service facilities.

After winning the long-awaited order following competitive bidding, the company said it would build a diesel locomotive manufacturing facility in Marhowra, Bihar, as well as maintenance sheds in Bhatinda in Punjab and Gandhidham in Gujarat.


"This infrastructure project is further evidence of India's position as a growth engine for Asia," GE Chairman and Chief Executive Jeff Immelt said. "It is a major advancement and milestone for India and for GE, and a symbol of our commitment and support of the 'Make in India' initiative."

In a news release, the company said the project would provide skill development opportunities for local talent.

The Marhowra diesel locomotive project marks one of the first major instances of foreign direct investment in enhancing India's rail locomotive capacity. It comes after the government last year allowed 100% FDI in the railway sector.

"This project combines GE's deep infrastructure and manufacturing expertise with India's growth priorities. This is an exciting and integral part of our localisation strategy in India," said Jamie Miller, chief executive at GE Transportation. "We are excited about working with Indian Railways and continuing to invest in the region."

GE has operated in India since 1902. The company has doubled its investment in India in the past five years and is bullish on the country's long-term prospects. It recently said India may soon become a global centre of excellence for certain components, and local sourcing has increased by 20% for locomotives, 30% for power equipment and 15% for aviation. The company is also participating in public-private partnerships with states in sectors such as healthcare.

CEO Immelt was in India recently and had said India's railway modernisation plans, for which tenders had been opened, illustrated the change in the way things happened in the country. He said while the project had been on the horizon for many years, this was the first time that it was actually happening. This, he said, was a "giant symbol" for the world.

The railway programme, he said, had the potential to bring in significantly higher investment in the country by GE.

GE wins $2.6 billion order to supply 1,000 diesel locomotives to Indian Railways - The Economic Times

 

[Juggernautjatt]

GE beat off competition from rival manufacturers like Canada's Bombardier and Germany's Siemens for the deal. India is also set to announce the winner of another multi-billion dollar contract to supply electric locomotives.

GE lands $2.6 billion Indian railway deal | Reuters

 

[Muhammad Omar]

1000 Engines is a huge Order....

But i thought India made locomotives herself?
what happened to that?

 

[Solomon2]

I was actually hoping the Indians would choose one of GE's new steam engine designs. I saw a presentation by one of their engineers and it turns out that applying modern design practice steam piston locomotives can be considerably improved to reduce total operating costs to the point they can compete or outperform diesel locomotives on at least some cargo routes.

 

[The Huskar]

1000 Engines is a huge Order....

But i thought India made locomotives herself?
what happened to that?

I think they are for the cargo trains running in the dedicated freight corridor tracks.India manufactures engine but GE engine's efficiency and power are a class apart.

 

[Abingdonboy]

@anant_s

 

[Srinivas]

If India has the capacity to build locomotives, why do we need GE to build them here ?

GOI seems spending the money lavishly when home grown engines are sufficient. It do not make any sense to buy these locomotives, instead they should have bought technology which is lacking here and then build the locomotives here.

India is not a growth engine for the corp orates, India's potential must be used to uplift this region. Corp-orates move from one region to other where they find profit and opportunities, in short they are the stooges of US and West.

If GOI wants to push for real development then they should concentrate on bringing technology and establishing R&D and manufacturing base like China here in India.

Shopping them and building some of the components will not make any progress nor it will help the Make in India program. These deals will only help those corp-orates who will close their factories once the returns stops coming.

NEW DELHI: General Electric has won a $2.6 billion (Rs 17,250 crore) order, the biggest in its over 100-year history in India, to supply Indian Railways 1,000 diesel locomotives over 11 years. Under this, the US-based conglomerate will invest $200 million to build local manufacturing and service facilities.

After winning the long-awaited order following competitive bidding, the company said it would build a diesel locomotive manufacturing facility in Marhowra, Bihar, as well as maintenance sheds in Bhatinda in Punjab and Gandhidham in Gujarat.


"This infrastructure project is further evidence of India's position as a growth engine for Asia," GE Chairman and Chief Executive Jeff Immelt said. "It is a major advancement and milestone for India and for GE, and a symbol of our commitment and support of the 'Make in India' initiative."

In a news release, the company said the project would provide skill development opportunities for local talent.

The Marhowra diesel locomotive project marks one of the first major instances of foreign direct investment in enhancing India's rail locomotive capacity. It comes after the government last year allowed 100% FDI in the railway sector.

"This project combines GE's deep infrastructure and manufacturing expertise with India's growth priorities. This is an exciting and integral part of our localisation strategy in India," said Jamie Miller, chief executive at GE Transportation. "We are excited about working with Indian Railways and continuing to invest in the region."

GE has operated in India since 1902. The company has doubled its investment in India in the past five years and is bullish on the country's long-term prospects. It recently said India may soon become a global centre of excellence for certain components, and local sourcing has increased by 20% for locomotives, 30% for power equipment and 15% for aviation. The company is also participating in public-private partnerships with states in sectors such as healthcare.

CEO Immelt was in India recently and had said India's railway modernisation plans, for which tenders had been opened, illustrated the change in the way things happened in the country. He said while the project had been on the horizon for many years, this was the first time that it was actually happening. This, he said, was a "giant symbol" for the world.

The railway programme, he said, had the potential to bring in significantly higher investment in the country by GE.

GE wins $2.6 billion order to supply 1,000 diesel locomotives to Indian Railways - The Economic Times

 

[Stephen Cohen]

1000 Engines is a huge Order....

But i thought India made locomotives herself?
what happened to that?

We make our own Locos BOTH Diesel and electric
But the production is NOT keeping pace with the demand

Plus these are 6000 HP locos ; new technology for HAULING Heavy trains
we make 4500 HP diesel locos

 

[Juggernautjatt]

I think they are for the cargo trains running in the dedicated freight corridor tracks.India manufactures engine but GE engine's efficiency and power are a class apart.

Yes they are mainly for cargo trains . For passenger trains another multi-billion dollar tender is going on to supply electric locomotives.

 

[Indika]

We make our own Locos BOTH Diesel and electric
But the production is NOT keeping pace with the demand

Plus these are 6000 HP locos we make 4500 HP diesel locos

Hmm, nice but why not partner with local industry to enhance the technical capacity. Given that there is a lot of demand why not establish production lines in india itself after importing few pieces from GE as stop gap arrangement?

EDIT: They are indeed building factories in india

 

[Stephen Cohen]

I was actually hoping the Indians would choose one of GE's new steam engine designs. I saw a presentation by one of their engineers and it turns out that applying modern design practice steam piston locomotives can be considerably improved to reduce total operating costs to the point they can compete or outperform diesel locomotives on at least some cargo routes.

Steam engines are a NUISANCE

They have huge logistic problems of supplying coal and water
plus they create pollution

Hmm, nice but why not partner with local industry to enhance the technical capacity. Given that there is a lot of demand why not establish production lines in india itself after importing few pieces from GE as stop gap arrangement?

When all car companies set up assembly lines to make cars in India
what is wrong with GE setting up a Loco unit

Indian railways is having a serious locomotive shortage

That is why they cant run more trains either on passenger segment or the goods segment

Diesel Locomotive Works Varanasi will keep making locos

This is just supplementing the production

 

[Odysseus]

GE and Alstom emerge as frontrunners for India rail contracts


GE Transportation, a division of General Electric of the US, and Alstom, the French engineering company, are frontrunners to win multibillion-dollar contracts to build and sell train locomotives as part of India's ambitious railway modernization program, officials familiar with the bidding process said.

The two companies have been selected from a shortlist of seven — which included Bombardier, Siemens and Electro-Motive Diesel — to supply at least 1,800 diesel and electric locomotives over 11 years from two factories that are due to be built in the Indian state of Bihar, the officials said.

They declined to give financial details of the bids, which remain subject to final confirmation. Nevertheless, executives at Indian Railways, the state-owned rail authority, estimated that the total investment needed to build the factories could be as much as $3.4 billion for an electric locomotive plant and $3.1 billion for a diesel locomotive plant.

The initiative to lure multinational engineering companies to India to make advanced locomotives is part of a broader initiative to modernize the country's congested and creaking railway system.


"This is the most ambitious rail modernization project in decades," said Suresh Prabhu, India's minister of railways, in an interview. "These [manufacturing] projects will bring the best rail technology to India and show that our 'make in India' program is not a dream," he added, referring to a national policy to boost manufacturing investment.

The two factories are due to be built as public private partnerships, with Indian Railways contributing land and some facilities for a 26 per cent share in each plant; GE Transportation and Alstom will take the remaining 74 per cent stakes. Indian Railways is set to buy locomotives produced at each of the plants.

The diesel locomotive factory, likely to be operated by GE Transportation, is expected to supply 1,000 locomotives, Indian Railways executives said. The electric locomotive plant, expected to be run by Alstom, is to manufacture 800 train engines.

In addition to the plan to manufacture advanced locomotives, India also intends to commercialize roughly 400 of its 8,000 or so railway stations, selling long-term leases to companies to operate shopping malls, restaurants, offices and other businesses on station premises, Mr Prabhu said.

"About 27 million people travel by train every day so you have a lot of people passing through the station ready to buy things," he said. "In Japan, more than 30 per cent of the income of railways comes from the non-rail business, but in India this is only 2 per cent at the moment."

Mr Prabhu also reiterated that the "dedicated freight corridor" project, under which India plans to build two new rail lines for freight from Delhi to Mumbai and Delhi to Kolkata at a total cost of $12.5 billion, would be finished by 2019.

GE and Alstom emerge as frontrunners for India rail contracts

 

[Stephen Cohen]

This is a JV between GE and Indian Railways

IR will hold 26 Percent equity in the JV

 

[Yaduveer]

1000 Engines is a huge Order....

But i thought India made locomotives herself?
what happened to that?

Important question

1. This is not first time India importing new technology from west in its Railway for e.g. LHB coaches are of german origin.We absorbed the technology and now exporting these LHB to others. wap 5 and 7 is also of foreign origin but we Indianize them and sell them to others. same way China has done to Japanese Bullet trains.

2. This is joint venture between Indian Railway and GE through FDI route.

3. Indian railway has short on supply of locomotives . One way take loan and increase its capacity and better way to ask for FDI with no loan of what so ever.

 

[Muhammad Omar]

We make our own Locos BOTH Diesel and electric
But the production is NOT keeping pace with the demand

Plus these are 6000 HP locos ; new technology for HAULING Heavy trains
we make 4500 HP diesel locos

I know India makes CNG locos to... But still if India can make 4500 HP locos invest some money to build a plant of 6000 HP Locos cheaper engines more people will get jobs etc

Demand can be meet all it needs money and India has plenty of it...

IF 1000 engine are coming with JV then the best deal