Texmaco gets a pie of Rs 40,000 crore GE and Alstom contracts

Saroj Poddar-owned Texmaco Rail and Engineering is set to benefit from the two mega orders bagged by two global majors, GE and Alstom, who would set up diesel and electric locomotive factories at a cost of about Rs 40,000 crore.

Texmaco has won major contracts from both these projects wherein it would undertake key fabrication work for locomotives.

The deal would help revive the fortunes of Texmaco Hi-tech Pvt Ltd, a company set up initially to produce robot-wielded wagons for its erstwhile Aussie partner UGL Ltd.

"The orders have a confidentiality clause and we can't disclose the quantity for these of these contracts. But these are both very prestigious orders, electric and diesel locomotives factories at Madhepura and Marhaura to be constructed by Alstom and GE. In both these projects, we have been selected to supply certain major fabrication items. We have been selected for most of their major sub-assemblies and we would be manufacturing them over the next ten years," Sandeep Fuller, chief executive officer (heavy engineering) of Texmaco Rail told DNA Money.

Indian Railways in 2015-end had awarded contracts to General Electric Co and Alstom to set up diesel and electric locomotive factories in Bihar at a cost of about Rs 40,000 crore.

The contracts, country's biggest foreign direct investment in the railway sector so far would involve manufacturing 1,000 diesel locomotives and 800 electric locomotives a year over the next 10 years.

The twin orders also come as a saviour for Texmaco Hi-tech Pvt Ltd earlier set up as a joint venture with UGL Rail Services of Australia.

Texmaco currently owns 100% in the arm following the exit of the foreign partner.

"The plant at Belghoria set up to cater to the UGL JV subsidiary has international standard production lines. This set up helped us win both the deals. At least in the rail industry, nobody would have invested so much in creating such a facility that we have set up," Fuller said.

Texmaco's other JV with Wabtec of US is also setting up its own plant, which would produce components for wagons.

Coach refurbishing is another business area that Texmaco is bullish about at a time when orders for wagons have dried up.

"The government has already floated two tenders for coach refabrications, one is to carry out the upgradation of Railways's own workshops and another one for upgrading contractors' premises. We have participated in both the tenders," he said.

...& ANALYSIS

• Deal to help revive fortunes of Texmaco Hi-tech, a company set up to make robot-wielded wagons for UGL
   
• Texmaco is also bullish on coach refurbishing at a time when orders for wagons have dried up