The Indian Railways has managed to slash the cost of new electric locomotives for freight movement by over two-third to Rs 11 crore per loco compared the current cost of over Rs 30 crore.
The railways made this best price discovery while bidding out the project to manufacture 1,200 high-powered locomotives for freight trains by not setting the benchmark price or bid price, thereby leaving enough room for fierce competition among major players.
The project to produce the locos, each with 9,000 horsepower (HP), has gone to Siemens Ltd. Officials said while production of each such coach is costing around Rs 30 crore, Siemens offered to manufacture them at Rs 11 crore. Even the second lowest bidder— Alstom Transport India Ltd — had quoted Rs 19.5 crore, which was also very competitive.
These locomotives for transport of freight will be manufactured at the Dahod factory in Gujarat.
Sources said the railways went for an innovative and transparent bidding process. “First, we did not mention the project cost in the tender. Second, we followed the best industry practice of putting everything before the bidders. The potential bidders were taken to the site and shown the availability of land so that there was no ambiguity in their minds about land and other approvals,” a railway ministry official said.
He added that the provision of maintenance of the locos for 35 years and that the workforce at the factory will be from railways also proved to be advantageous for the best price discovery. Officials said they will follow the similar exercise for future bids, which is completely hassle-free and all details are in black and white to the bidders.
The maximum speed of these locomotives will be up to 120 kmph and they will be equipped with Kavach, the indigenously designed automatic train protection (ATP) system. The first locomotive is expected to roll out by mid-2024 and all the 1,200 locomotives will be manufactured in the next 11 years.
“The technological partner has been selected through a fair, transparent and competitive bidding process. It will provide training to railway staff at Dahod for manufacturing the 9,000 HP locomotives and at four depots at Visakhapatnam, Raipur, Kharagpur and Pune for maintenance of the locomotives over the design life of 35 years … The technology partner will also ensure 95% availability and 1.5 lakh km of trouble-free operation of locomotives before any mal-operation takes place as the guaranteed Key Performance Indicators (KPIs),” the railway ministry said.