Scrap! Don’t Scrap! Scrap Again? Railway Minister Piyush Goyal’s Flip-Flops on Diesel Engine Use

Railway minister Piyush Goyal said on Tuesday that the Indian railways would phase out diesel engines in the next five years. But this has raised uncomfortable questions, as the railways has already committed to buying 1000 diesel locomotives over ten years.

“We have planned to switch all trains to electric-driven in the next five years,” Goyal said at a meeting of the executive committee of industrial lobby group Federation of Indian Chambers of Commerce and Industry (FICCI). “The diesel locomotives will be used for back-up purposes in the yards.”

The railways is reportedly targeting to electrify the 30,000 km of rail lines which remain to be electrified, over the next four years. The expected cost is Rs. 30,000 to 35,000 crore.

Even as the Railway Minister made this claim, the work on the Marhaura diesel locomotive project in Bihar is on track. The factory was approved in 2014 during the term of the Congress-led UPA-II, and after the BJP-led NDA came to power, a Rs. 14,000 crore contract was awarded to the US giant General Electric (GE) to set up a diesel electric locomotive factory in Marhaura.

The contract was awarded in November 2015 by the Ministry of Railways, then headed by Suresh Prabhu. The factory is being set up at an estimated cost of Rs. 2052.58 crore, with limited equity contribution by the Railway Ministry.

As per the contract, GE is supposed to manufacture 1000 locomotives over ten years for the Indian Railways. 100 locomotives are to be imported.

However, after Piyush Goyal took over as Railway Minister, the complete elimination of diesel locomotives gained apparent priority. It was reported that in a safety meeting chaired by Mr. Goyal, instructions were given for the Marhaura plant to be closed and for the entire rail network to be electrified.

"“Close Marhaura project. Stop rehabilitation of diesel locomotives and stop investment in new diesel loco maintenance” was how it was recorded in the minutes of the meeting, signed by the railway board secretary," according to a report.

But this caused a furore, as General Electric reacted sharply saying that the decision to scrap the project would have a "serious impact on job creation and skills development and cause the government to incur substantial costs".

The Railway Minister responded soon to reassure the US corporation that the Marhaura factory is being set up and it is on track, and that the government would abide by its contract.

Subsequently in October, the first of the diesel-electric locomotives built by GE arrived in India.

Vishal Wanchoo, the President and CEO of GE South Asia reportedly said, "The work in our diesel factory in Bihar is on track and as the minister has said there are no changes in the contract."

Now Mr. Goyal is back again with the claim that the government is going to fast-track the total shift to electric trains. At the same time, there are also reports that the Centre is considering a proposal to sell 30,000 km of the Indian Railways’ power lines.

The obvious question that arises is, how does it make sense that the Indian railways would add 1000 diesel locomotives to its rolling stock over ten years and at the same time, eliminate the use of diesel locomotives?