Vande Bharat Manufacturing Deal: RVNL And Russian TMH Resolve Differences, To Sign Agreement

Russian rolling stock major TMH and Rail Vikas Nigam Limited (RVNL), Indian Railways PSU have resolved their differences and agreed to sign the Shareholders Agreement for manufacturing of 120 Vande Bharat trains with AC Sleeper coaches.

According to the BSE filing by RVNL on 18 July, while share purchase agreement has been signed, the details would be filed after signing of Shareholders Agreement.

According to shareholding pattern, TMH subsidiary-Metrowagonmash has 70 per cent, RVNL has 25 per cent and Locomotive Electronic Systems (LES), a Russian equipment supplier has 5 per cent shares in the joint venture.

The JV consortium is the lowest bidder for the Vande Bharat Sleeper train project.

The contract ran into trouble after RVNL seeking majority share in the project which was not agreed by the TMH resulting in delay in signing the formal contract between the joint partners.

According to the Railways, RVNL and Russia's TMH have been asked to resolve their differences and go ahead with the contract for the sleeper design of Vande Bharat trains.

Now the next step is to sign the contract and deposit the bank guarantee of Rs 200 crore at the earliest, said a senior Railway official.

TMH-RVNL had quoted a price of Rs 120 crore train which was substantially lower than prices quoted by competitors such as BHEL-Titagarh (Rs 139.38 crore), Bharat Earth Movers Limited (BEML)-Siemens (Rs 145 crore), Alstrom Transport (Rs 164.52 crore), and Medha Servo Drives-Stadler Rail (Rs 165 crore).

The contract includes the supply of train sets by 2029 and maintenance service for a period of more than 15 years. Last month, the BHEL-Titagarh group matched the bid price submitted by TMH-RVNL and finalised a contract with the Indian Railways to make the remaining 80 Vande Bharat sleeper train sets.

Head of business development in India, TMH Group, Sergey Medvedev had told Swarajya in an interview this month that "Administrative and legal preparations are underway to establish the jv company in accordance with local laws and requirements. The Performance Bank Guarantee has been prepared and will be issued immediately after the JV has been established".