General Electric will build a locomotive manufacturing unit in Bihar.
By Sreekanth A Nair
General Electric announced that the company will invest $200 million in the railways sector of India. It will build manufacturing and supply facilities to develop and supply 1,000 diesel locomotives to Indian Railways.
GE received a Letter of Award from Ministry of Railways to supply and maintain locomotives for a period of 11 years. The deal is worth $2.6 billion.
The company said in a statement that “the deal advances the ‘Make in India’ initiative and reinforces India’s position as a global manufacturing destination”.
As per the agreement, GE will build a diesel manufacturing unit in Marhowra district in the state of Bihar and two maintenance units in Bhatinda in Punjab and Gandhidham in Gujarat.
The deal is the largest one in the history of GE in India. Also, it is the largest contract given to a foreign company since Indian Government allowed 100% Foreign Direct Investment (FDI) in railways.
The decision by the Indian Railways is in line with the government’s intention to modernize railways. It will also give a chance to develop skills of India in the sector.
GE will sign an agreement with Indian Railways and the manufacturing unit will be built in Public Private Partnership (PPP) model.
GE was awarded the letter following a competitive bidding process. France-based Alstom has got another contract worth $200 million to supply 800 electric locomotives. Alstom will also build a factory in Bihar.
GE Chairman and CEO Jeff Immelt said, “this infrastructure project is further evidence of India’s position as a growth engine for Asia. 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.”
“This project combines GE’s deep infrastructure and manufacturing expertise with India’s growth priorities. This is an exciting and integral part of our localization strategy in India,” said Jamie Miller, GE Transportation Chief Executive Officer.
Indian Railways is one of the largest railway networks in the world with a track length of more than 115,000-kilo meters. It carries more than 23 million passengers a day.