Railways plan SPVs to make coaches & components

In a bid to meet the growing demand of rolling stocks, the Railways have decided to form special purpose vehicles (SPV) with an authorised paid-up capital of Rs 500 crore. The SPV in turn will set up manufacturing facilities in various joint ventures under a public- private partnership model.

According to draft note put for cabinet approval, the SPV will undertake resource mobilisation, provide consultancy to the existing production units for technology upgrade and assist the JV in sourcing human resources.

The SPV on behalf of Indian Railways, with sufficient autonomy and delegation of powers, will speed up the JVs and will be facilitator to convert India into a manufacturing hub for the production of the world-class rolling stocks, officials say.

Indian Railways plans to set up four manufacturing units - one each for diesel locomotives (engine), electric locomotives, coaches and wheels. The cost of setting up these units will be between Rs 5,800 and Rs 6,000 crore. "Considering the need for massive capacity augmentation and creation of additional capacities on Indian Railways, this would impose a considerable burden on the limited resources available with Indian Railways," says the government note.

The preferred option for setting up of these and similar other manufacturing unites will be to form joint ventures with internationally renowned OEMs (original equipment manufacturers) to make different rolling stock and critical components. The JVs may also become manufacturing hubs of rolling stock and capture a good share of the export market, particularly in South Asia, officials said.

Email Arun Kumar: arunkumar@hindustantimes.com