The Union Cabinet has approved the setting up of an electric locomotive factory at Madhepura, Bihar and a diesel locomotive factory at Marhowra, Bihar at an estimated cost of Rs. 1293.57 crore and Rs. 2052.58 crore respectively, with limited equity contributions by the Ministry of Railways. Over a ten-year period, the factories will provide the 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 two factories will be set up in JV mode with locomotive manufactures to be selected through International Competitive Bidding (ICB). The JV partners will be selected through a two-stage ICB process. The bids will be finalized within six months of receipt of the Cabinet`s approval.