CAG puts spanner on GE's diesel loco manufacturing unit in Bihar

Putting a spanner on US giant General Electric's diesel locomotives manufacturing unit in Bihar's Marhowra, the Comptroller and Auditor General (CAG)has said that the project was not "in sync with the overall strategic vision of railways". Diesel locomotives procured under this agreement would have no scope for productive utilisation in the Indian Railways network in the future, the CAG said in its report.

"In fact, the railways itself had decided to significantly reduce in-house production of diesel locomotives at Varanasi from 2019-20, the report said, adding that setting up a new infrastructure for production of diesel locomotives and incurring a liability of Rs 171.26 billion was not in sync with the railways' strategic vision. The proposal to set up the Marhowra unit was made by the railways in September 2006 and GE Global Sourcing India was awarded the contract in November 2015."

"Since a long time had elapsed, there was a need to reassess the necessity of setting up a new diesel locomotive manufacturing unit before awarding the contract. Audit analysis showed that diesel locomotives available with the railways were sufficient in numbers," the CAG said. Electrification has been a major goal of the railways since the BJP-led government took over it's reins with a 2021 deadline to completely move to electrify it's broad gauge routes.

It will also run freight trains in dedicated freight corridors on electricity. At present, around 42 per cent of the tracks are electrified. This would make diesel traction only necessary for low-traffic routes, for which high-powered diesel locomotives were not likely to be used optimally. "The railways awarded the contract to manufacture 1,000 diesel locomotives over 10 years to GE in 2015."

"Need for high-power diesel traction in the Indian Railways is going to diminish in the years to come. The diesel locomotives procured under this agreement would have no scope for productive utilisation in the Indian Railway network in future," the state auditor said.
The auditor was also critical of the parking system of the Indian Railways, stating that the national transporter did not execute agreements promptly in many cases and did not enter into agreements in some places.

"The contractors were managing the parking lots in an un-professional manner and the railways was not able to ensure that they provide service according to the agreements and recover dues from contractors," it added.
It also raised an alarm on the lack of land management cells for commercial plots managed by the commercial department at any level in the railways.