Bhel offers to supply diesel locomotives to Pakistan

If offer is taken, it will be the first such order for an Indian manufacturer.

India’s state-owned Bharat Heavy Electricals Limited (Bhel) has offered to supply 100 diesel locomotives to Pakistan as part of a plan to modernise the country’s rail infrastructure, livemint.com – the online edition of Indian newspaper Mint – has reported.

If the public sector unit clinches the deal, it will be the first such order for an Indian manufacturer.

The proposed deal, valued at around Rs10 billion, comes against the backdrop of newfound affability between the two countries. Ties have picked up since last year and there has been a marked improvement in economic cooperation.

“China had earlier supplied around 1,000 locomotives to Pakistan, of which 800 have developed defects. Their railway network is down,” said a senior Bhel executive, requesting anonymity. “We made an independent offer of 100 locomotives to a Pakistani delegation which had come visiting recently. We are now working with their Ministry of Railways for the order to fructify. Once this happens, we may get more orders given the huge demand,” he said.

Rites Limited, an Indian Railways subsidiary, had earlier made a proposal to Pakistan to help improve its rail infrastructure.

“Ours is a proposal independent of Rites. Even Indian Railways sources around 50% of the equipment from us for manufacturing diesel locomotives,” the Bhel executive said. Trade is being seen as the driver of recent efforts to strive for better relations between the neighbours. These include India’s in-principle decision to allow Pakistani firms to invest in the country, the setting up of an India-Pakistan joint business council, and talks between the Reserve Bank of India and the State Bank of Pakistan to allow banks from both the countries to open branches in each other’s territory.

Another senior Bhel executive aware of the development said, “An offer has been made for 100 diesel locomotives to Pakistan during a recent visit of a delegation from there. Ours is an independent offer, given the expertise we have in diesel locomotive manufacturing. We are looking at more orders from Pakistan.”

Questions emailed to spokespersons for India’s ministry of external affairs and the Pakistan high commission on Wednesday remained unanswered at the time of going to press.

Published in The Express Tribune, June 30^th, 2012.