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Bhel Agrees to Joint Venture With GE to Set up Locomotive Manufacturing Unit

Posted on February 23, 2009

Bharat Heavy Electricals Ltd (Bhel), a public sector equipment manufacturer, has signed an agreement to float a joint venture with US-based technology provider General Electric (GE) to manufacture diesel locomotives for Indian Railways. The facility would be set in Marhoura, Bihar, with initial capacity to manufacture 120 locomotives a year. Bhel would hold 23% stake, while GE would have the majority shareholding of 51%. Railways would take the balance 26%.

The company is in talks with Railways to supply diesel locomotives from the new facility. “We have signed the agreement with GE, but the setting up of the company depends on winning the contract from railways. We would invest Rs 1,000 crore in this venture,” Bhel chairman and managing director K Ravi Kumar said.

Bhel is also looking to set up a unit to manufacture electric locomotives in Madhepura, Bihar. “We are in talks with Siemens, Bombardier and Alstom, which are the three qualified technology providers for the railways’ proposed contract,” Kumar said. This facility would also manufacture 120 locomotives a year. The new venture would also include setting up a component manufacturing facility in Bhopal, where Bhel already has a similar plant.

The railway ministry has planned procuring 800 new electric locomotives of 12000 HP each and 1,000 diesel locomotives of 4500/6000 HP each over a period of 10 years. These locomotives will also be maintained by the joint venture company over the next 25-26 years.

For more information: WWW.BHEL.COM

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