India on the cusp of a logistics revolution: Alain Spohr of Alstom India
Braving the Covid-19 situation, global major Alstom has delivered 24 electric locomotives to the Indian Railways in the last two months making one of the largest foreign direct investments in the rail sector a reality. Alain Spohr, Managing Director, Alstom India and South Asia, talks about the future of this project, the role of dedicated freight corridors in the sector and the planned private train project in an exclusive interview with Shine Jacob. Edited Excerpts:
You have started delivering electric locomotives (e-locos) to the Indian Railways as part of the 2015 contract. How do you evaluate the progress of this project so far?
Prima WAG12 e-locos are built as part of the country’s largest Foreign Direct Investment (FDI) in the Indian Railways. Until recently, the Railways has been extremely independent and never had joint ventures for its large projects. Signing a partnership with Alstom in 2015 marked the beginning of a new era for the Railways. And for us, it wouldn’t be wrong if I said that this project was ‘A first of its kind Make-in-India challenge’, that resulted in a technological breakthrough. The contract worth €3.5 billion includes manufacturing of 800 double-section, 12,000-horsepower electric locomotives for freight service and associated maintenance for a period of 11 years.
The joint venture between Alstom and Indian Railways is one of the strongest endorsements of Make-in-India for various reasons – a highly-localised supplier base has been put in place for execution and technology the transfer has added to building local engineering capabilities. More than 85 per cent of the components used to manufacture these locomotives are being sourced from India. It gives me pride to mention that in spite of the challenges posed by Covid-19, we have been able to successfully manufacture and deliver 24 units to Indian Railways in the last couple of months. And as we speak, all the 24 eLocos have been deployed for commercial operations.
What is the road ahead for this project?
As per the plan, we will deliver 75 units in 2020-21. Starting next fiscal, we will deliver 100 units annually. Designed at our Engineering Centre in Bengaluru, the e-Locos are being built in one of India’s largest integrated greenfield manufacturing facilities at Madhepura (Bihar). Spread across 250 acres, with a production capacity of 120 locomotives per annum, this industrial site is built to international standards of safety and quality. The project envisions to create more than 10,000 direct and indirect jobs in the country (primarily in the states of Bihar, Uttar Pradesh and Maharashtra).
Work is underway for the construction of the maintenance depot in Nagpur. Saharanpur depot is fully functional. Equipped with ultramodern features, these depots will have a substantial role in maintaining India’s most advanced freight locomotives at significantly lower costs. Saharanpur depot also has a ‘Training Centre’ equipped with a loco simulator and smart classrooms being used for skill development of railway employees. Till date, more than 500 loco pilots from Indian Railways have been trained and going forward, 500 will be trained annually.
Globally, Alstom is associated with almost every prominent railway organisation and Indian Railways is one of the largest railway entities in the world. The joint venture combines innovation with responsibility and together we are committed to delivering safe, reliable and efficient solutions. We are excited to be part of this revolutionary journey of Indian Railways.
Alstom is associated with the works of the World Bank-funded Eastern DFC. What is the status of that, and do you think DFCs are going to be game-changers in Indian Railways history?
India is on the cusp of a logistics revolution. The ambitious Dedicated Freight Corridor (DFC) project is a befitting strategic response by the Indian Railways towards decongesting up to 70 per cent of freight trains and to add further capacity. The re-invigoration efforts will address some of the crucial gridlock zones along the Eastern and Western Corridors, which are currently running at 115-150 per cent utilisation. In the past 60 years, IR’s market share in freight business had dropped significantly and the DFCs will attempt to win this back. Alstom has been awarded the jobs for electrification, signalling and telecommunication systems along the 343 km. stretch on Eastern DFC. As part of the contract, we are also building sub-stations and the Operations Control Centre (OCC).
While Covid-19 slowed down the progress on these jobs, with the advent of Unlock 1.0 our teams persevered to restart with an undeterred spirit following all necessary permissions and keeping safety as a priority by adhering to government protocols. As on date, it is heartening to see that more than 1,250 fully-loaded goods trains have successfully operated on the 200 km stretch of EDFC. We have also completed electrification, signalling and telecommunications systems on this stretch and energised the third traction substation in the project (Sikhohabad). This is the first Traction Substation to be energised under an open access system for DFCCIL.
The Dedicated Freight Corridor will lead to fewer emissions of greenhouse gases as it facilitates the operation of electric trains. Furthermore, they will enable safer and timely movement of freight across the country and reduce the traffic on the corridor for passenger trains.
What is your take on the Centre’s decision to have private trains? Do you see it as a business opportunity?
Alstom offers a complete range of equipment and services, from high-speed trains, metros, trams and e-buses to integrated systems, infrastructure, signalling and digital mobility solutions. Our ambition is to partner with all transportation stakeholders in meeting tomorrow’s mobility challenges. Alstom supports Indian Railways’ move to introduce modern technology Rolling Stock at a maximum speed of 160 kilometer per hour (kmph), with reduced maintenance and enhanced safety. Many countries, including Japan, Germany, US and Canada have successfully managed such railroad privatisation. The first move of privatising 151 trains will add to this effort by bringing world-class travel experience to Indian passengers. While the tendering for this project is at initial stages, Alstom will be interested in exploring this opportunity, as we have innovative solutions for enhanced passenger experience along with the right product expertise to address the Indian market.
How has Covid-19 impacted Alstom in India? Did you face sourcing issues?
Covid-19 has had an unprecedented impact on people, businesses and economies. Last quarter, the company’s activities were impacted due to the containment measures – specifically manufacturing, a slowdown on project sites and supply chain. In spite of this, we achieved a very good continuity of our engineering activity through remote working. All other teams have been working round-the-clock to adapt to the new normal of remote working. Today, some of the critical jobs such as quality checks, quality controls (FAI) are being performed remotely. Also, some of the functions such as QIA (supplier quick industrial assessment) which were conventionally performed in person have also are being done remotely.
Since most of our sourcing is done indigenously, we strengthened our planning processes to minimize the impact on our business and customer commitments. Though some of our suppliers faced challenges, we were able to jointly navigate through this. To assist our sourcing partners, we also started weekly supplier control tower surveys to understand and address their concerns in a timely manner. Regular reviews are happening virtually to evaluate supplier production and priorities. Most importantly, we have been successful in implementing processes that give us almost two months of visibility on sourcing and supply chain.
This crisis has acted like a magnifying glass, making it clear which processes worked well and which ones needed to be adapted. Going forward, it is important for us to maintain this awareness and use it as our strength. The Covid-19 situation proved to us once more that all our regular processes aren't there just for fun, but are in fact essential, and that our digital Global Single Instance (GSI) landscape can be a very strong operational performance lever. Although the crisis is far from being over, we are very proud and thankful for the way the teams have mobilised themselves in this volatile environment.