The Railway Ministry said it has initiated two joint-venture projects in Bihar to produce modern locomotives and will sign the formal agreement on Monday, 30 November.

The two projects — Electric Locomotive Factory at Madhepura and Diesel Locomotive Factory at Marhowra — are worth Rs. 40,000 crore.

Earlier this month, Indian Railways was awarded letters of acceptance for setting up these two modern locomotive factories.

"These two factories are excellent example of the biggest Make in India initiative ever undertaken by the Indian government," said the ministry in a statement released on Saturday, 28 November.

While the contract for the Marhowra factory has been awarded to the US' GE Global Sourcing India, the contract for the Madhepura plant has been awarded to France's Alstom Manufacturing India.

"These two factories also mark the flow of FDI in the railway sector," said the statement.

The plant at Marhowra will manufacture and supply modern diesel electric locomotives of 4,500 and 6,000 horse power (HP), which in combination can operate as 9,000 HP and 12,000 HP multiple units, respectively. The Madhepura plant will manufacture and supply modern electric locomotives of 12,000 HP.

"Under the agreement, 1,000 diesel locomotives will be manufactured in a period of 11 years with a basic cost of Rs 14,656 crore, and 800 electric locomotives will be manufactured in a period of 11 years at a basic cost of Rs 19,904 crore. Taking into account the cost of setting up factories and maintenance facilities, these two projects together are worth Rs.40,000 crore," said the ministry.

These locomotives will be useful for heavy haul and mega freight operations in the dedicated freight corridor and for pan India operations, it added.