THE WORLD’S MOST IMPORTANT RAILWAY MARKET FOR US

‘WE SEE HUGE OPPORTUNITIES IN INDIA, THE WORLD’S MOST IMPORTANT RAILWAY MARKET FOR US’

Montreal-headquartered Bombardier is a global leader in transportation, which moves millions of people every day around the globe through more than 110,000 rail vehicles that are in operation globally. As a global leader in rail technology, it has significant international experience in manufacturing, engineering, technological innovation, services and fleet management – all of which it plans to bring to India. Excerpts of an interview with Harsh Dhingra, chief country representative, India, Bombardier Transportation (BT):

Words: Team Urban Vaastu

Could you give a quick snapshot about Bombardier’s India operations?
India is one of the world’s most important railway markets for us. We have a well-established manufacturing operation, engineering capabilities, supplier and employee base (over 1,900 highly skilled employees) in India.

We see huge opportunity in India, with Mass Transit systems planned in over 50 cities by 2050, modernisation of 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, Gujarat. We have a propulsion systems manufacturing facility at Maneja, near Vadodara. We also have a Rail Control Solutions Centre for project delivery, product engineering and Information Services hub near Gurgaon, and an Engineering Centre in Hyderabad.

In 2007, we invested €33mn in a state-of-the-art railway vehicle manufacturing facility at Savli. Overall, we have invested more than $100mn over the last two decades in Indian manufacturing sites, people, engineering, local supplier network and proven technologies.

We are actively contributing in the ‘Make in India’ programme 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”.

How has your relationship been with Delhi Metro Rail Corporation (DMRC)?
Bombardier is Delhi Metro’s largest supplier of signalling systems and one of its largest suppliers of rolling stock with more than $1.2 billion worth of orders placed since 2007. We have delivered 614 BOMBARDIER MOVIA metro cars with an additional order of 162 cars recently received from DMRC, making 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.

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, we completed in house production for the supply of propulsion and electrical equipment to Mumbai Railway Vikas Corporation (MRVC) for 72 twelve-car trains.

What are the potential opportunities in India in the metro segment, over the next 5 years?
Over the next 5-7 years, various cities in India will do procurement of approximately 3,000 metro cars and 20 signalling lines. The Indian government expects 50 cities will have a population of over 2mn by 2050 and is encouraging them to develop mass transit systems.This will generate demand for the urban transit solutions that we excel at.

Harsh Dhingra, chief country representative, India, Bombardier Transportation

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We are focused on projects which we consider as strategic and have 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 the state of Kerala.

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, increasing the local content considerably (currently at around 70%), from the time manufacturing started at the site in 2008.

This means an increasing amount of our product is truly Indian, with components available in rupees, and not subject to the volatility of international currency markets.

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What is competitive landscape in this segment?
In terms of manufacturing facilities, 3 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.

How have exports been from your Indian factories?
Bombardier Savli site has developed extensive export-oriented activities. We are currently supplying Bogie components for Adelaide EMU’s 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 manufacture for QNGR project 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 10,500 km by road and sea from Savli, India to the Port of Brisbane.

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 long-term vision for a sustainable and stable railway 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.

Where the money will come from, to transform India’s rail transportation?
The Ministry of Railways has set out its vision for rail as a key provider of connectivity and enabler of economic development, with a proposed $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 $13 bn.

In funding mass transit systems, ~20-25% is contributed by both state and central government, with the rest funded by outside agencies such as Japan’s JICA, Germany’s KfW, the French AFD, European Investment Bank, and Export Import Bank of India.

What is the scope of driverless trains, which will be used by DMRC Phase 3?
The driverless technology goes back to 40 years – Bombardier was amongst the first company to start implementing this technology in 1983. The key advantage of driverless technology is that it brings down the headway to 90sec from the current levels of around 2 minutes, which is a welcome introduction for the commuters.

Driverless technology has 2 parts – rolling stock and signalling, which have to be properly interfaced. For the Phase 3 of Delhi Metro, 60% of signalling has been done by Bombardier, whereas trains are supplied by Rotem.

How important is the Indian rail market to Bombardier?
Bombardier aims to transform rail transportation in India, which is one of the world’s most important railway markets. Bombardier has been investing in India for over 50 years.

We are actively collaborating in the ‘Make in India’ programme by delivering rail vehicles, products and solutions that are developed locally, for both Indian and foreign markets.

India is putting its transport system under scrutiny as never before, with investment in national carrier Indian Railways (IR), the nation’s vast 70,000km railway network and mass transit systems central to its plans. For an established company like Bombardier, operating and investing in India is key for a sustainable growth and future for our operations in India.

What’s been Bombardier’s biggest success in India?
Bombardier is one of the few rail companies in India which is truly supporting the Government’s Make in India campaign. It is not only making rail products and solutions for the Indian market which are manufactured in India but also delivering it for exports from India.

During a meeting with Bombardier officials in May 2016, the Prime Minister said: “I appreciate the efforts of Bombardier Transportation to invest in India through the Foreign Direct Investment (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.”

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What are the fundamental aims and objectives of Bombardier’s mission in India?
Bombardier Transportation in India has the capability to address the country’s rail industry requirements for the production of metros, electric multiple units, semi high speed and high speed trains, intercity trains as well as mass transit solutions such as monorails, light rail vehicles, etc. Also for equipment supply for advanced IGBT propulsion systems and bogies manufacturing along with supply of signaling systems and maintenance.

India is the second most populous country in the world with a population of 1.25 billion people. Already with around 9 cities having a population over 5 million and foreseeing to have in 2051 more than 35 cities reaching that volume, India is a prime example of a country which needs a comprehensive, sustainable and integrated rail transportation system.

The Indian metropolitan cities have been growing rapidly and the traffic volumes on the roads have also been increasing enormously. Overstretched rail and road networks have created an urgent need for a suitable transport system within the Indian cities.

The commuter transport has become hazardous with severe overcrowding and maximum commuters resorting to road use. The escalating transport problems forced city planners and the government to find a solution to provide fast, reliable, convenient, efficient, modern and an economical transport system India urgently needs.

As India embarks on an overhaul and expansion of its rail transportation network, we look forward to being its key partner in the ever-changing railway scene.

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What are the challenges of having an extensive presence in the Indian market?
India’s geography, traditions, social organisation, easily understands that railways, for mass transit as well as for inter-city traffic, play an extremely important role as it is the backbone of mobility in the country.

Bombardier has been investing in India for the last 50 years.

Challenges like any other country on identifying funding for projects, administrative issues, etc still remain but with the new vision and efforts of the current government, we see an ease of doing business in India with focus on stabilizing railways and clearing pending projects.

Are there any particular elements of the Indian market that make it different from others that Bombardier operates in?
In terms of the Indian rail market, it operates in a very similar passion to any other market with international bidding process followed for procurement with transparency compliant to global standards.

To operate in India, understanding of local requirements and customer expectations is a must and with our local standing presence, Bombardier is well positioned to support the transformation of Indian rail transport industry.

What future plans does the Bombardier Transportation have for its Indian operations?
We strive to be the first choice rail technology provider for India. As a global leader in rail technology, Bombardier has significant international experience in manufacturing, engineering, technological innovation, services and fleet management – all of these assets Bombardier will bring to bear wittness in India.

There is a great scope for incorporating our rail solutions in order to address the increasing demands of rail operators for efficient, modern and eco-friendly transport in Indian cities.

Bombardier Transportation President Laurent Troger recently announced plans to “double our business in India”, reaching between $700 million and $1 billion. How could such a plan be turned into reality?

In the overall landscape of Bombardier Transportation, India is a significant country. The climate now is very favourable in India, for investment.

Compared to the global scale of business to the tune of about $8.5 billion, India’s revenue was about $300 million, but with the government’s thrust on drives like Make in India and Skill India, Bombardier sees a hoard of opportunities here.

On infrastructural front, the government is very keen that it is linked to the GDP and, this can attract a lot of other players. We consider that we have the largest footprint by having the right and newest technology.

The government is open to private financing through contracts and is also open to soft loans from other countries like Japan and Europe which will help the projects to be cleared faster with more governance and processes in place.