RVNL, Russia's Transmashholding to form JV for making Vande Bharat trains

A Share Purchase Agreement has been signed between the RVNL's subsidiary company Kinet Railway Solutions Limited, RVNL, Joint Stock Company Metrowagonmash and Joint Stock Company Locomotive Electronic Systems.

Rail Vikas Nigam Limited and Russian rail infra major Transmashholding on July 18 announced their decision to form a joint venture to manufacture Vande Bharat trains.

A share purchase agreement has been signed between RVNL subsidiary Kinet Railway Solutions Limited, RVNL, Joint Stock Company Metrowagonmash and Joint Stock Company Locomotive Electronic Systems.

The agreement details that RVNL holds 25 percent of the share,  Joint Stock Company Metrowagonmash holds 70 percent of the share and Joint Stock Company Locomotive Electronic Systems holds 5 percent.

Earlier this year, Russia’s CJSC Transmashholding and Rail Vikas Nigam Ltd (TMH-RVNL) consortium emerged as the lowest bidder for a Rs 58,000-crore contract to manufacture and maintain 200 Vande Bharat trains. The consortium was ultimately awarded a contract to supply 120 Vande Bharat sleeper trains.

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Moneycontrol had reported in June that talks had soured between the two parties as TMH refused to agree with RVNL’s demand for a larger stake in the JV, and thus, had not deposited the bank guarantee of nearly Rs 200 crore required for the project to get started.

The terms under which the shareholding of the joint venture have been signed are the old terms and none of terms RVNL was trying to push have been considered.

Bharat Heavy Electricals Ltd (BHEL) and Titagarh Wagons emerged as the second lowest bidders, bagging a contract to supply 80 trains at the rate of Rs 120 crore per train, amounting to Rs 9,600 crore. Additionally the consortium will also provide maintenance of the same for 35 years.

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The joint venture between the Russian transportation giant and RVNL is yet to enter a contract with the Ministry of Railways to manufacture the trainsets (locomotive and carriages coupled together).