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| Edited By: Sanjay Jog |Source: DNA |Updated: Jun 25, 2018, 02:15 AM IST
With several large projects underway in the mainline and urban networks, Alstom is uniquely positioned to meet India's changing and growing mobility needs, believes Alain Spohr, managing director for India and South Asia. In an exclusive interview with Sanjay Jog, Spohr talks about the opportunities, government policies, and company's projects and strategies.
Alstom's journey in India began with a transfer of technology for Linke Hofmann Busch (LHB) coaches for the Shatabdi and Rajdhani trains. At present, the company is executing metro projects in Chennai, Kochi, Jaipur, Bengaluru and Lucknow. In the mainline network, Alstom's signalling and power supply systems are a part of eastern dedicated freight corridor. The company's strong base in India is further strengthened by its new electric locomotive factory at Madhepura in Bihar. The high horsepower locomotives manufactured there will be the most advanced in the Indian Railways fleet. From here, expansion across current metro systems will continue to be strong drivers for Alstom's business in India. We want our solutions to be considered as the reference technically, economically and environmentally for mobility in the country. Combined with this is our strategy to make India our manufacturing hub for international markets, having successfully delivered export projects out of Sri City this year. Our recruitment plan for India is in step with this growth and investment plan.
Alstom has set up an e-loco plant at Madhepura (Bihar) and is setting up maintenance depots at Saharanpur (Uttar Pradesh) and Nagpur (Maharashtra) to supply Indian Railways with 800 double-section freight electric locomotives with associated long-term maintenance. This project is one of the strongest endorsements of the Make in India policy of the government because of the highly localised supplier base that has been put in place to execute it. Almost 90% of the components used to manufacture these locomotives are being sourced from Indian companies. The Madhepura locomotive project also includes large-scale development of local infrastructure and facilities that will empower the local economy of Bihar as well. Alstom is adding to this transformation by undertaking community-building projects in Madhepura to make sure the benefits of industry seep through to the grassroots of this remote region. Additionally, our Sri City plant is not just a manufacturing unit for our Indian projects, it is also a base for exports. With an annual production capacity of 240 cars and over 500 employees, this plant is Alstom's base for manufacturing rolling stock for national and international projects - another strong marker of our commitment towards the Make in India initiative.
As an MNC (multinational corporation) which has the government as its primary customer, policies of a country play a crucial role in the delivery of our products and services effectively. The government's recognition of our investments in the country helps us make India one of our most important markets for growing our business worldwide.
While policy measures like a streamlined tender/bids process, one window investment portals from the state governments and Ministry of Urban Development's (MoUD) push for metro suppliers to Make in India have phenomenally improved the ease of operating businesses, the new taxation regime has done much to clean up outdated taxation policies. What is of merit to us is to see how India keeps the momentum of operations in the country strong and steady. Finer nuances of the new regulations are still to be streamlined. That's something to wait and watch for. To elucidate, under the GST (goods and services tax) input credit rates are higher than output GST on rolling stock. There is a surplus GST credit which comes into play that is non-refundable; hence, an extra cost for domestic rolling stock manufacturers. This extra cost amounts to approximately 7% of sales price, defeating the intent of GST implementation and deterring domestic manufacturers from making locally. Rationalisation or modification of these will take manufacturing in India and the government's vision to the next level.
With several large projects underway in the mainline and urban networks, Alstom is uniquely positioned to meet India's changing and growing mobility needs. Smart cities gaining impetus will open business opportunities in tier-2 and -3 markets. The mainline network, too, is undergoing a major overhaul, which brings with it opportunities aplenty. India is one of the most important markets for us worldwide and we are committed to investing and growing here.
As a business, we consider three primary factors before investing - market potential, availability of talent and government support. As a market, rapid modernisation, adoption of newer, safer and more sustainable technology, rapid urbanisation places India high on the market potential index. Location-wise, having a base in India also helps us assuredly deliver projects across Asia, Middle-East and even beyond. We also have been able to tap into the large, skilled talent pool available in the country - bright, young minds that are helping us develop solutions for projects worldwide. We employ close to 3,600 people in India, which makes it our biggest centre of operations after France. With the government's Make in India and Skill India initiatives, we find our business goal completely aligned with the country's vision. I do not know about other companies, but conducting business in India and from India makes sense for us.
We have received a phenomenal amount of support from all the state governments we have been working with. In Lucknow, the UP government's support helped us deliver our project ahead of schedule. We wouldn't have been able to complete construction of phase-1 of the factory and deliver the first e-loco on schedule without the support of the Bihar government. Similarly, for projects in Bengaluru and Chennai, faced none of the roadblocks that public sector projects usually face. We are grateful for the trust they have placed in us and our products and we hope to continue being their preferred partner for upcoming projects as well.
Railway minister Piyush Goyal's vision of modernising Indian Railways is aligned with our services and business vision. Being a global leader in the mobility space, we have the best of technology and services on offer to meet the unique needs of India as a market. Having undertaken and completed similar projects worldwide would ensure that the products and services delivered are thoroughly tested for safety. We have been part of India's mobility journey for over five decades. We hope to continue on the same track.
