The new rail coach manufacturing unit will be constructed in Telangana. Credit: Stadler Rail AG.

India-based Medha Servo Drives has signed a joint venture (JV) agreement with Swiss railway rolling stock manufacturer Stadler Rail for a new rail coach manufacturing factory in the Indian state of Telangana.

The new facility will be built with an investment of INR10bn ($129m) over two years, reported The Times of India.

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Stadler Rail will own the majority interest in the JV, which is anticipated to employ more than 2,500 people from the state.

According to the Telangana government, the new facility will be used to make exports to customers across the Asia Pacific region, besides meeting the requirements of the Indian market.

Telangana IT Minister Kalvakuntla Taraka Rama Rao was quoted by the publication as saying: “I am extremely delighted that Stadler chose Hyderabad as their primary location for rail coach manufacturing for the complete APAC region in partnership with Medha Servo.

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“This will show the world the potential that Hyderabad has, to match global investment destinations in terms of quality of talent and output.”

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Last year in January, Medha Servo received an INR22.11bn ($285.2bn) contract to design, develop, manufacture, supply, integrate, test, and commission several types of equipment for Vande Bharat type train sets for 44 rakes of 16 cars each.

Separately, Stadler confirmed a framework agreement with Swiss Federal Railways (SBB), Thurbo, and RegionAlps for up to 510 single-decker FLIRT trains.

Last year in October, the company secured a framework agreement to manufacture and supply the units but an unsuccessful bidder had filed an appeal against the award. Now the appeal has been dismissed by the Federal Administrative Court.