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Source: The post is based on the article “India-Russia joint venture on Vande Bharat trains hits hurdle” published in The Hindu on 2nd June 2023
What is the News?
The joint venture (JV) between Russian transportation giant Transmashholding (TMH) and Indian public sector undertaking (PSU) Rail Vikas Nigam Ltd. (RVNL) to manufacture 120 Vande Bharat Express train sets has run into problems.
What are the Vande Bharat trains?
| Read here: Explained: Fast-tracking Vande Bharat |
About India-Russia joint venture on Vande Bharat trains
The Indian Railways awarded the JV deal to the TMH-RVNL consortium after it emerged as the lowest bidder. The JV requires TMH and RVNL to manufacture 120 Vande Bharat train sets, each costing nearly ₹120 crore.
By June 2025, the TMH-RVNL consortium has to be ready with the first two prototype Vande Bharat trains for testing and trials. After the prototypes are approved, every year, 12 to 18 trains will be manufactured in a tapered fashion.
The consortium will also run maintenance services on the trains for 35 years. The railways are spending $1.8 billion for the train sets and another $2.5 billion for their maintenance.
What are the problems faced by India-Russia joint venture on Vande Bharat trains?
The issue with shareholding: RVNL had requested majority shareholding from TMH. But the TMH has not agreed to this and has also not deposited the bank guarantee of nearly ₹200 crores required for the project to get started.
Import of spares: Not all parts of the much-touted ‘Make in India’ Vande Bharat train sets are manufactured indigenously. Many of these parts have to be imported from Western European and American manufacturers.
The ongoing sanctions imposed on Russia following the Russia-Ukraine war have affected the supply of spare parts from Western European and American manufacturers.
| Must read: Vande Bharat trains: Potential and Challenges – Explained, pointwise |
