Aug 20, 2016

IR may renegotiate DFC loan condition with Japan


India JICA Railways DFC

New Delhi: Railways is contemplating to renegotiate loan condition with Japan for procuring high horse power electric locomotives for the Western Dedicated Freight Corridor (DFC) as the procurement award is stuck over the pricing front.

Railways’ ambitious plan to acquire 9000 high horse-power (HP) locomotives from Japan for hauling double stack containers on the Western DFC has come to a dead end with no further progress for more than last seven months.
Railways has found the price of Rs 50 crore per locomotive quoted by Kawasaki-led Japanese consortium too high and sought its reduction by almost half.

While the Japanese consortium has not reduced the price as desired by Railways, there was no further movement since January, said a senior Railway Ministry official.

“Since we will be getting the 12,000 HP locomotive at Rs 25 crore from our upcoming Madhepura plant, the price offered by the Japanese consortium is not acceptable,” the official said.

Western DFC is entirely funded by JICA loan and as per the loan condition Railways has to procure locomotives from Japan.

As a way forward, Railways is contemplating to renegotiate the loan condition so that it can go for international bidding.

Railways is expected to procure 200 high power locomotives from Japan. The loco contract is estimated to be about Rs 4500 crore and the first batch of locomotives is expected to arrive two years after awarding of the contract.

The Japanese consortium comprising five companies including Kawasaki, Toshiba, Mitsubishi Electric and Mitsubishi Corporate had submitted their bids in October last year for procurement of the 9000 HP locomotives for WDFC.

As per the agreement, 40 modern locomotives with 9000 HP and IGBT technology will be imported from Japan, 60 will be assembled at the Railways’ Dankuni facility and the rest 100 will be manufactured at Dankuni.

The high-power locomotives will be used to haul double-stack containers on WDFC.

WDFC will cover around 1,534 kms from Dadri to Mumbai, passing through Delhi, Haryana, Rajasthan, Gujarat and Maharashtra.