This is good news, both politically and economically, as railbased factories generate direct and indirect jobs and help improve the social and economic landscape of the area.



In this context, it would be interesting to focus on two of the many factories that were announced in the UPAI regime, primarily because their journey holds significant lessons.



These are the electric locomotive factory in Madhepura and a diesel locomotive factory in Marhowra, both in Bihar. In fact, the diesel factory even found a mention in the US President, Barack Obama speech during his India visit.



These factories were announced in Railway Budget by the cheap uggs then Minister Lalu Prasad and were proposed to be located in his home State. The factories were estimated to involve capital investments of about Rs 3,500 crore, and the bidding process had also moved forward.



In 2009, just before the general elections, when financial bids for both these factories were invited, GE was a single bidder for the diesel loco factory; while there were no bidders for the electric loco factory.



This was primarily due to the global economic slowdown.



However, work on the project restarted after UPAII came to power. In 2010, the Railways had informed six firms for qualification ugg boots uk outlet for bidding four for electric loco factory, and two for diesel.



For the electric loco factory, the companies that had qualified were Alstom, Bombardier, GE and Siemens; while for the diesel loco factory, two American firms had qualified GE and EMD (now, taken over by Caterpillar).



But, soon after that, the contractual norms got entangled in interMinisterial allegations. Consequently, there has been no forward movement to the next stage financial bids.



In 2011, Pompa Babbar, then Financial Commissioner of Railways, had pointed out that many changes were made in the contract document after it was cleared by the Cabinet, which could increase the financial liability of the Railways by over thousands of crores.



Moreover, in December 2012, the Prime Minister Office tried bringing back focus on these projects.



bids for the Madhepura project will be called by December 31, 2012, and the project will be awarded before the Railway Budget. The interministerial group set up under the Cabinet Committee of Economic Affairs will consider and approve any necessary changes to documents. Timelines for the Marhowra Project will be announced by December 15, it stated.



As things stand, there is no clarity on whether these projects will be awarded this year. Top sources in Rail Bhawan admit that the project has become too contentious, making it difficult to take a decision. Many point out that that Bansal predecessors had also avoided taking a call on the issue.



Some of contentious issues that need to be resolved relate to the financial payout maintenance period. There are discussions on reducing the maintenance period, among others. Also, a lot of time has been spent in deciding on the exact ownership format of factories.



However, the experience of these two factories make it important for the Railways to first firm up the basics of how they want to go about setting factories before making announcements. Otherwise, they only add to the Railways unending list of pending projects.



From a host of new factories proposed during last few years, only the Rae Bareli coach factory project has started production (UPA Chairperson Sonia Gandhi constituency). That too, as a Railways whollyowned production unit, instead of Planning Commission stated intent of inviting private investment, given the Railways funding crunch.



That said, here are some of the factories from Bansal list a new forged wheel factory at Rae Bareli, Uttar Pradesh; a greenfield mainline electrical multiple units (MEMU) manufacturing facility at Bhilwara, Rajasthan, in collaboration with State Government and Bharat Heavy Electricals Limited (BHEL); a coach manufacturing unit in Sonepat district, Haryana, in collaboration with the State Government; midlife rehabilitation (MLR) workshop at Kurnool, Andhra Pradesh in collaboration with the State Government; a workshop for repair and rehabilitation of motorised bogies at Misrod, Madhya Pradesh; a new wagon maintenance workshop in Kalahandi district,Odisha; a modern signalling equipment facility at Chandigarh, Haryana through publicprivate partnership route.