Alstom to double manufacturing capacity in India, increase staff to 8,000

The company complains that restrictions by JICA as part of tied loans is affecting its business opportunities

French trainset and related systems manufacturer Alstom is planning to double its manufacturing capacity in SriCity, in Andhra Pradesh, to 480 train sets per annum in near future. The company will be increasing its headcount from current 5,000 people to 8,000 by March 2023, said Alain Spohr, MD, Alstom, India & South Asia.

However, the company said it is unhappy as it is being restricted from participating in certain tenders based on conditions put forth by funding agencies, and that it is not being considered as an Indian company.

Speaking at SriCity, where it today commenced manufacturing of rolling stock for Mumbai Metro Rail Corporation (MMRC), Spohr said, "We are planning to double our manufacturing capacity at SriCity from 240 trainsets to 480 trainsets per annum in next three to four months. The factory is currently executing orders for Chennai Metro, Montreal Metro and Mumbai Metro Line 3". The domestic and exports production is a mix of 50:50 at present and the company is comfortable with this mix. It has a localisation of around 75 per cent in India.

The first metro train for MMRC Line 3 will be delivered by November 2020. It has an order worth Euro 452 million for the Line 3 of MMRC, including manufacturing of 31 lightweight, fully-furnished modern metro trains of 8 cars each. The company expects completion of this project by 2022.

Alstom recently won a contract with Sidney's NRT to supply the rolling stock and signalling system for the next stage of Sydney Metro. Twenty three six-car fully automated Metropolis trains for the project will be manufactured at the SriCity factory. The facility at present is underutilised since the projects have been completed to an extent, but will be fully operational in next three to four months. The Montreal project will be completed by the end of 2021, the e-locomotive project in Madhepura will likely end on 2026 and the new Sydney project is expected to be complete by 2023. 

The supply for Chennai Metro, for which it has manufactured 42 trains and producing an additional 10 trainsets, will be over by this financial year. It is also participating in tenders for the new metro projects in other cities.

The company is setting up a traction components and other products manufacturing facility in Coimbatore, which will be ready by the second half of next year. It is also expecting to see break even in two to three years from now.

Commenting on the expansion projects of Chennai Metro Rail, he said that it could not participate since the tied loan from Japan International Cooperation Agency (JICA) to the state government had conditions that around 30-35 per cent of the purchases has to be from Japanese companies or Indian companies, which are owned by Indians.

"One of the things which I am not happy at all is that after doing all these investments, including in factories, people etc, I am not allowed to be considered as an Indian company and bid on those tenders," he said. "We cannot bid as we do not have that much percentage of Japanese content," he added. 

There are at least two to three tenders in which the company cannot participate across the country due to such restrictive clauses. In terms of financial loss of opportunity, he said, "If I get a medium size tender, it is around Euro 250 million, it is a potential intake of another Euro 50-200 million per year."

While the government may have to go for funding and JICA has its conditions, he said, "But still I think our government should ensure that for future jobs, fair play is respected". While the company has represented to the government and they are also on the view that the company's view is right, nothing has happened after that, he added.