OREANDA-NEWS. The Union Cabinet has approved the proposal of the Ministry of Railways for setting up of an Electric Locomotive Factory at Madhepura, Bihar and a Diesel Locomotive Factory at Marhowra, Bihar, to start afresh the bidding processes for these projects.

Estimated costs for setting up the Electric Locomotive Factory and Diesel Locomotive Factory, as approved by CCEA and included in the Railway Budget are Rs. 1293.57 crore and Rs. 2052.58 crore respectively, with limited equity contribution by Ministry of Railways.

 An informal Group of Ministers, chaired by the Minister of Finance and comprising the Minister of Railways, and Dy. Chairman Planning Commission, met on April 22, 2013 and finalized its recommendations, following extensive inter-ministerial deliberations. The two factories shall be set up in Joint Venture (JV) with locomotive manufacturers to be selected through International Competitive Bidding (ICB). JV partners will be selected through a two stage ICB process. The bids will be finalized within three months of receipt of the Cabinet's approval.

Over a ten year period, the factories will provide Indian Railways with 800 electric locomotives of 12,000 horse power (h.p.) each and a mix of 1,000 diesel locomotives of 4,500 and 6,000 h.p. with high level performance guarantees similar to international practices.

The locomotive factories are likely to attract significant foreign investment with concomitant availability of internally generated resources for other important railway projects. Locomotives manufactured by these factories will be of international class energy/fuel efficiency and will become an important instrument of India's response to global efforts towards mitigation of adverse impacts on climate due to emission of green-house gases. Successful execution of these projects by the JV route will usher Indian Railways into a new era of reforms.