The Indian Ministry of Railways has received approval from the government to start the bidding process for establishing an electric locomotive manufacturing plant at Madhepura and a diesel locomotive factory at Marhowra in the state of Bihar.

The Ministry of Railways is providing limited equity funds for the projects.

Under the proposal, the Madhepura electric locomotive factory is expected to cost Rs12.93bn ($240m), while the diesel locomotive factory would cost around Rs20.52bn ($382m).

Both factories will be built in a joint venture (JV) with locomotive manufacturers to be selected via international competitive bidding (ICB).

A two-stage ICB process will be carried out to select the JV partner, and the bids are expected to be finalised within three months of the Cabinet’s approval.

The two projects were originally announced in 2006 and were to be set up in partnership with private players, with the railways holding 26% stake in each.

Over a ten-year period after completion, the Madhepura plant will manufacture 800 electric locomotives of 12,000hp, while the Marhowra facility will produce 1,000 diesel locomotives of 4,500hp and 6,000hp.