Sergey Medvedev, Head of Business Development in India of Russian company TMH (Transmashholding), which has emerged as the lowest bidder in the Vande Bharat sleeper project, speaks to Swarajya.
Excerpts:
Q: TMH, the rolling stock giant, has bagged a major Vande Bharat contract from Indian Railways. How will you execute the project?
As the world’s fifth-largest rolling stock manufacturer and number one in Russia, TMH has considerable experience in implementing large infrastructure projects such as the Vande Bharat.
Besides, our huge order book in the domestic market, one of the latest international projects, is the supply of 1,350 passenger coaches to the Egyptian National Railways (ENR). This large multi-country project involves Russia, Egypt, and Hungary, where TMH organised the production of the coaches at the Dunakesi plant.
The contract is worth 1 billion euros, and more than 750 coaches have already been delivered to the customer. The project also includes a 12-year contract worth 430 million euros for the service and maintenance of passenger coaches in Egypt, including the design of new depots and their equipment.
The Vande Bharat contract is a groundbreaking first for modern semi-high-speed sleeper trains and includes responsibility for the full life-cycle maintenance of the rolling stock supplied for 35 years.
For the Vande Bharat project, three partners — TMH subsidiary, RVNL (Rail Vikas Nigam Limited), and LES — had signed an irrevocable, legally binding agreement.
While TMH’s scope is to provide all technical, commercial, and experience support, that of the Indian partner — RVNL — includes the upgradation of the factory in Latur as well as of the three maintenance depots in Delhi, Jodhpur, and Bengaluru.
TMH is already working in the Indian market and engaged with all key suppliers to strengthen local commitment and ensure the ‘Made in India’ requirements of the contract.
Administrative and legal preparations are underway to establish the JV company in accordance with local laws and requirements.
The Performance Bank Guarantee has been prepared and will be issued immediately after the JV has been established.
Q: What kind of new technology TMH is expected to bring for Vande Bharat?
Our products are technically comparable to our competitors and have all the features of modern EMUs in Europe or America. Everything that is required in the Vande Bharat tender, we can bring based on our existing portfolio.
In general, TMH products are operating in over 30 countries in a wide range of climatic conditions. We have proven that our products are not only outstanding in terms of reliability and design, but also significantly more affordable than many of our competitors.
TMH designs, manufactures, and maintains products under life-cycle contracts. In other words, TMH creates products that best meet customer’s needs. It also creates the conditions for the development of a local manufacturing base.
The creation of a technology cluster in India for the production of high-tech rail and urban passenger vehicles is one of the company’s key priorities.
TMH is ready to play the nodal role of a key resident in the future industrial park to help attract other Russian companies, including the production of proprietary traction, doors, air conditioning, and control systems.
Q. The Vande Bharat contract is also seen as one of the largest rail partnership projects between Russia and India. Your comment?
For the railway industry, the Vande Bharat project, valued at around $6.5 billion including maintenance, will be one of several projects of such magnitude that will significantly improve relations between all countries and provide opportunities for Russian, international, and Indian companies to enter new markets.
It’s important to say that the railway systems in India and Russia have many similarities; both systems are very large, offer high transport capacity, and face growing demand. This will provide many opportunities to use TMH’s long experience to provide Indian Railways with modern and reliable train technology to ensure efficient operation with excellent availability for 35 years.
Our cooperation with local companies in India will also provide a bridge for Indian suppliers into the Russian railway market — the third largest in the world.
Q. What is your future plan for the rail sector in India?
TMH has long-term goals for entering the Indian market. In addition to the previously announced projects, TMH is actively participating in other tenders for the supply of rolling stock.
These include the supply of EMUs and metro coaches for Mumbai, metro projects in Chennai, Patna, and other regions, as well as the supply of LRVs for the proposed MetroLite systems in the Jammu and Kashmir region, and the maintenance of metro coaches in various regions of the country.
We have recently tendered for the maintenance of metro coaches for Line 2 of the Delhi Metro and are very positive about this project.
Q. How much are you planning to invest in the Indian rail sector?
It will depend on the volume of accessible opportunities, their investment needs, and specific bid requirements with relation to the localisation of manufacturing or technology. It could exceed half a billion dollars, according to our estimates.
In addition to this foreign investment, the projects will develop local suppliers, create new jobs, and generate significant tax revenues.
Q. If everything goes according to the plan, when would we be able to see the first Vande Bharat train with sleeper coaches?
According to the contract with Indian Railways, the first prototype must be supplied within 24 months, and the first certified product has to be ready for operations six months later.
Q. How can you contribute under the government’s ambitious ‘Make in India’ initiatives?
We are well aware of this initiative and the ambition of the Indian government. In Russia, TMH’s home market, the level of localisation of its products is close to 100 per cent. This is the result of TMH’s hard work, including huge investment in creating its own industrial park of local Russian suppliers.
For the Vande Bharat project, TMH is fully committed to the ‘Make in India’ concept, and its aim is to produce a product with maximum localisation.
Discussions with key local suppliers have been held to ensure their readiness and we are ongoing to clarify further details. As mentioned earlier, the decision about the Russian industrial zone will heavily support the ‘Made in India’ strategy.
In general, TMH is committed and focused on strengthening the relationship between the two countries, focusing on developing the ‘Made in India’ approach and maximising the integration of the Indian supply chain in its global product offering.
India is considered by TMH as a base for further expansion to South Asia.