The Indian Railways (IR) has signed two contracts with Alstom and GE Transportation for a combined value of around Rs 45000 crore (USD 6.8 billion). The contracts were signed on November 30 for a total of 1800 freight locomotives.

While Titagarh Wagons has not won any order, VC and MD of Titagarh says that for each locomotive that Indian railway buys, it has to buy hundreds of wagons. To that extent, a large amount of wagons will be required. "So the fallout of this order will be phenomenal, and hence it is very positive news for the company. However, the government is yet to float any tender for wagons after floating one in March. Going ahead, he expects to see an increase in order flows.

Management belief is that this is the year when the railways will come up with the second tender because their requirement cannot get met with just about 5,000-6,000 wagons. So, we are hoping that the next tender for this current year should be out any day. With the whole process of the railway working having been simplified over the last few months, management is expecting that if the tender comes out then the finalization which used to take anything between six months to six years as has been seen in the case of the locomotives is now down to almost less than six weeks.

The biggest suffering in the last five-seven years in the railways is the lack of decision making and USD 7 billion contract getting signed just shows that there is a complete reversal of mind sets from in decision to quick decision making.

Recent orders of locomotives primarily are going to be used in the dedicated freight corridor. Dedicated freight corridor is a different track axle load compared to what is being used in the current network. So, entire fleet of wagons which is there will be completely required. These are a high horsepower locomotives. So, if you look at the current locomotives that are there they are 50 percent of the horsepower. So, this 1,800 actually on an apple to apple basis translates into double of that which is 3,600 locomotives. So, if we really look at that it would mean a complete doubling or a huge quantum jump of the railway fleet that the railway existing fleet is.