Mr. Harsh Dhingra, Chief Country Representative, India, Bombardier Transportation, takes GV through his company’s journey in India, its operations here, and talks about the opportunity he sees in the Indian rail segment (railways and metros).
Q: Could you talk a bit about Bombardier’s global operations?
Bombardier is a Canadian company, headquartered in Montréal. In FY15, we posted revenues of US$ 18.2bn. We are the best in class in the transportation industry with 29 sites in 60 locations, and a one-stop solutions provider for sustainable modern mobility in the 21st century. We move millions of people every day in countries around the world; today, over 110,000 Bombardier rail vehicles operate globally.
As a global leader in rail technology, we have significant international experience in manufacturing, engineering, technological innovation, services and fleet management – and we plan to bring all of these aspects to India.
Q: How about Bombardier’s India operations? Could you tell us about those?
India is one of the world’s most important railway markets for us. In India, we have a well-established manufacturing operation. Additionally, we have engineering capabilities and a supplier and employee base, which consists of over 1900 highly skilled employees. We see huge opportunity in India what with Mass Transit systems planned in over 50 cities by 2050, the modernisation of the Indian Railways’ network, and plans for semi high-speed and high-speed trains.
In India, we have a railway vehicle manufacturing site and bogie assembly hall at Savli near Vadodara in Gujarat state. Our propulsion systems manufacturing facility is also in Vadodara at Maneja. We have a rail control solutions centre for project delivery and product engineering, and an information services hub near Gurgaon. And we also have an Engineering Centre in Hyderabad.
In 2007, we invested ~€ 33mn in a state-of-the-art railway-vehicle manufacturing facility at Savli in Gujarat. Overall, we have invested ~US$ 100mn over the last two decades in Indian manufacturing sites, people, engineering, the local supplier network, and in proven technologies.
We are actively contributing to the ‘Make in India’ program by delivering rail vehicles, products, and solutions that are developed locally, for both Indian and foreign markets. We also support the Indian government’s vision on ‘Skill India’ with locally-grown talent now delivering projects, as well as the ‘Clean India Movement’ by regularly arranging clean up drives in Vadodara. Bombardier truly incorporates “Make in India for India” and “Make in India for the World”.
Q: How has your relationship been with Delhi Metro Rail Corporation (DMRC)?
Bombardier is the Delhi Metro’s largest supplier of signalling systems and one of its largest suppliers of rolling stock with more than US$ 1.2bn worth of orders placed since 2007. We have delivered 614 BOMBARDIER MOVIA metro cars and recently we have received an additional order of 162 cars from DMRC – this makes it one of the largest operating fleets in the world for Bombardier. We have also delivered signalling solutions for more than 120km track length for Lines 5, 6 and 7.
“I appreciate the efforts of Bombardier Transportation to invest in India through the FDI route. We acknowledge the contribution of Bombardier in supporting India’s “Make in India” and “Skill India” programme by producing trains for India and for exports from India”
– Mr. Narendra Modi, Honourable Prime Minster, India. at a meeting with Bombardier officials in May 2016
Q: What has your relationship been with Indian Railways (IR)?
Bombardier’s long-standing relationship with IR began in 1993, with a design-and-build contract for electric mainline passenger and freight locomotives. We now supply propulsion equipment to IR for locomotives. In June 2016, we completed in-house production for the supply of propulsion and electrical equipment to Mumbai Railway Vikas Corporation (MRVC) for 72 twelve-car trains.
Q: What is the potential opportunity in India, in the metro segment, over the next five years?
Over the next 5-7 years, various cities in India will procure approximately 3000 metro cars and 20 signalling lines. The Indian government expects 50 cities to have a population of over 2mn each by 2050, and is encouraging them to develop mass transit systems. This will generate demand for urban transit solutions, in which we excel.
We are focused on projects that we consider strategic with long-term prospects for our operations in India. We are closely pursuing various metro projects in the cities of Delhi, Ahmedabad, Mumbai, Nagpur, Pune, Vijayawada, Vizag, and Bengaluru, along with light rail projects in Kerala state.
Q: How much localisation of technology have you achieved at your India plant?
Bombardier’s investment in Gujarat has attracted global vendors to set up production facilities, within Gujarat around our sites. This has increased the local content considerably from the time manufacturing started at the site in 2008. Currently the local content is at around 70%. This means an increasing amount of our product is truly Indian, with components available in INR, and not subject to the volatility of international currency markets.
Q: What is the competitive landscape like in this segment?
In terms of manufacturing facilities, three companies have a base in India – Bombardier, BEML, and Alstom. Along with these companies, we compete with Korean, Japanese, Chinese and a host of other European players in the Indian rail market.
Q: How have exports been from your Indian factories?
Our Savli site has developed extensive export-oriented activities. We are currently supplying bogie components for Adelaide EMUs, Victoria trains, Riyadh Metro and São Paulo monorail and 75 six-car trains with bogies for Queensland New Generation Rolling stock (QNGR) project. Vehicle assembly and bogie manufacturing for QNGR is taking place at the Savli facility while the Maneja facility is supplying a portion of the propulsion equipment. Three six-car trains have been delivered to date and they are undergoing testing at our Wulkuraka Maintenance Facility in Ipswich, Australia. These trains have travelled more than 10,500km by road and sea from Savli to the Port of Brisbane.
Q: Have you seen any changes with the new government at the centre taking charge since 2014?
The Indian government, formed after the 2014 general election, is actively pursuing a long-term vision for sustainable and stable railways in India. Its ambitions are huge and focused, with emphasis on improving safety, expanding rail infrastructure, increasing track capacity, reducing congestion, raising passenger comfort levels, technological innovations, and faster train speeds.
Rail is considered a significant engine of inclusive growth for India, with the potential to contribute up to 2% of GDP, compared to current 1% levels. To maintain historic levels of national growth at 7-8%, railway needs to grow by ~9.5% every year. This will create new jobs, save energy, and improve the environment, while moving people, raw materials, and goods more efficiently nationwide.
Q: Where will the money to transform India’s rail transportation come from?
The Ministry of Railways has outlined its vision of railways becoming a key provider of connectivity and enablers of economic development, with a proposed US$ 125bn investment over the next five years (2014-2019).
During its initial days in office, the government introduced a plan for 100% FDI in the railways. In all, 17 areas have been identified where industry players can invest up to 100% from which IR expects to collect around US$ 13bn.
In funding mass-transit systems, both the state and central governments contribute ~20-25%, while the rest is funded by outside agencies such as Japan’s JICA, Germany’s KfW, the French AFD, European Investment Bank, and Export Import Bank of India.
Q: Are you looking to bid for Mumbai Line 3 (MM3); what is the timeline that you’re expecting for it?
We are interested in bidding for MM3 for Rolling stock and Signalling contracts. We understand civil contracts for MM3 will be awarded soon. The RFQ for rolling stock is already out and we expect RFQ for signalling shortly. We expect contract finalisation by Q2/2017, with supplies to be made in 2019.
Q: Have tenders been invited for Phase 2 for the Jaipur metro?
There are ongoing feasibility and alignment studies for Phase 2 of Jaipur. Once we have more clarity on Phase 2 with detailed specifications, we will be able to comment further.
Q: What is the scope of driverless trains, which will be used in DMRC Phase 3? Does it require superior technology? Who, apart from Bombardier, has that technology?
The driverless technology goes back 40 years – Bombardier was among the first companies to start implementing this technology in 1983. The key advantage of driverless technology is that it brings down the headway to 90 seconds from the current levels of around 2 minutes, which is a welcome introduction for the commuters.
Driverless technology has two parts – rolling stock and signalling, which have to be properly interfaced. For the Phase-3 of the Delhi Metro, 60% of signalling has been done by Bombardier, whereas trains are supplied by Rotem.
Q: It has been often cited that standardisation of contracts/specifications is required in India – do you agree with that?
Yes, standardisation helps in reducing costs. The Indian market is maturing; things are moving towards standardisation, and we strongly support this. We have also been recommending that the authorities change the bidding parameter to LCC (life-cycle cost) from acquisition cost – this will help bring in international practice of procurement.
Q: In its last Phase 3 bids, DMRC included a penalty for energy efficiency. How was that received by the industry?
Yes, the DMRC had proposed levying a penalty in the bid on energy efficiency. Energy efficient products are always preferred and I am sure that the industry welcomes it. The understanding on evaluation methodology amongst supplier and buyer is a key.
Q: What is opportunity for a player like Bombardier from freight corridors, being developed by Indian Railways?
If you see the current Indian Railways network, the average speed of passenger trains on “A” routes (7,000-8,000km, connecting important cities), is very low, due to movement of freight trains. Freight trains move at ~25km/hr while passenger trains move at ~40 km/hr (max 75km/hr). With DFC in operation, the freight traffic will migrate to DFC from the “A” routes. This will increase freight movement speeds to 80km/hr and decongest the “A” routes. Hence, IR can not only introduce more passenger trains on the “A” routes, but can also increase their average speeds. This migration will create demand for locomotives, coaches, semi high-speed trains, as well as wagons.
Subscribe to enjoy uninterrupted access
