GE to supply 1,000 locomotives to Indian Railways

GE Transportation announced Nov. 9, 2015 that it received a Letter of Award from India’s Ministry of Railways for a locomotive supply and maintenance contract worth approximately $2.6 billion over 11 years to supply Indian Railways with 1,000 diesel-electric locomotives. “The deal advances the ‘Make in India’ initiative and reinforces India’s position as a global manufacturing destination,” GE said.

The largest deal in GE’s 100-year history in India involves the company building a diesel locomotive manufacturing facility in Marhowra district in the Indian state of Bihar, as well as maintenance facilities at Bhatinda in Punjab and Gandhidham in Gujarat. “This effort is a major boost to India’s railway modernization efforts, and will provide skill development opportunities for local talent,” GE said. The company added that it will be making a $200 million investment in the project.

The locomotives will be diesel-electric and powered by Evolution (EVO) engines, with the first locomotive scheduled for delivery in January 2018. The first 100 locomotives can be imported or include imported kit content from the U.S, GE says. The remainder are expected to be built in India of mostly local content.

“This infrastructure project is further evidence of India’s position as a growth engine for Asia,” said GE Chairman and CEO Jeff Immelt. “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.”

Last year, the Government of India allowed 100% Foreign Direct Investment (FDI) in the railway sector. The Marhowra diesel locomotive project marks one of the first major instances of FDI in enhancing India’s rail locomotive capacity.

“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 CEO. “We are excited about working with Indian Railways and continuing to invest in the region.”

The Letter of Award confirms GE as the selected bidder, following a competitive bidding process, for the project to develop a diesel locomotive manufacturing facility and deliver 1,000  locomotives. GE will sign an agreement to formalize the contract and establish a joint venture with Indian Railways before breaking ground to construct the facility.