'Make in Gujarat' or 'Assemble in Gujarat'? Questions Surround Siemens' Role in Railway Project
This article was first published on June 18, 2025, and has been updated and republished on June 23, 2025, with the ministry's response.
New Delhi: Last month, on May 26, Union railway minister Ashwini Vaishnaw delivered a speech at Dahod in Gujarat which went viral on social media. In the presence of prime minister Narendra Modi, Vaishnaw spoke in a manner, which many said was similar to Modi's.
The occasion was the launch of what Vaishnaw said was India’s “first 9,000 horse-powered locomotive engine”. He spoke in detail on how “adhunik” (modern) technology of regenerative brakes would work in an electric engine and claimed that it was possible due to Modi’s “vision”, giving the impression that such a technology was being used for the first time by Indian Railways. He also spoke on Dahod and how its people will make these engines possible.
But in fact, the Indian Railways has been using locomotives with regenerative brakes since the 1990s; and had even begun manufacturing such ‘Made in India’ electric locomotives since the early 2000s at the Chittaranjan Locomotive Works (CLW) in West Bengal.
Later, the Railway ministry said that the minister “never meant the technology was being used for the first time in India”.
What the government said about the contract
In December 2022, the Ministry of Railways announced that the contract for the Dahod project had been awarded to the German giant Siemens. A government statement said that as per the letter of award (LoA), the company, for a period of 11 years, would act as the project’s technological partner to manufacture 1,200 units of 9,000-horsepower electric locomotive engines. The company would also continue the maintenance for the engines for their entire lifespan of 35 years.
“The estimated value of [the] contract is about INR 26,000 Crore (about 3.2 Billion USD), excluding taxes and price variation,” the statement issued by the Press Information Bureau (PIB) on December 22, 2022 had said.
Stating that the agreement with Siemens India would be signed within a month of the issue of that LoA, the PIB statement had underlined that the “proto-type locomotives are to be delivered in the coming two years” by Siemens.
Importantly, that press statement had added, “Dahod Unit will be fully constructed for manufacturing these locomotives within a period of two years. Siemens, selected as technological partner, will manufacture these locomotives at Dahod and maintain these locomotives at four maintenance depots — Vishakhapatnam [Visakhapatnam], Raipur, Kharagpur, Pune for a period of 35 years utilising [the] Railway’s manpower.”
The PIB statement also said that “Technological Partner [Siemens] will provide training to Railway Staff at Dahod for manufacturing the 9,000 HP locomotives and at four depots at Vishakhapatnam [Visakhapatnam], Raipur, Kharagpur and Pune for maintenance of the locomotives over the design life of 35 years.” This sort of transfer of knowhow has been routine in railway contracts.
This was also how a Swiss entity which was the supplier of CLW’s regenerative engines passed on its knowhow to railway workers.
Agreement differs from LoA terms
However, a statement issued on the occasion of the launch of the locomotives by Siemens on May 26, 2025, categorically stated that the “manufacturing of the critical components” of the locomotives launched by Prime Minister Modi are being done “at Siemens’ factories in Nashik, Aurangabad and Mumbai” while only “the final assembly, testing, and commissioning (are being) performed at the Indian Railways’ factory in Dahod”.
The Siemens’ statement had added, “The state of the art Dahod facility, constructed in record time of less than two years, incorporates cutting-edge features including Virtual Reality-based (VR) safety training, a locomotive simulator and loco-shunters for efficient carriage movement.
News reports on the Railways’ signing the agreement “within 30 days” of the PIB statement as per the LoA with Siemens India, however, didn’t mention the condition about manufacturing those engines at the Dahod facility, as announced by the government in its press note in 2022.
This brings up the following questions:
- Did the agreement signed by the Railways eventually with Siemens bring in a new clause which sanctioned only the assembly and testing of those engines at the Dahod facility?
- Did it change the condition mentioned in the government’s 2022 statement after the LoA – that the railway staff would be “trained” in the manufacture of the engines?
- Was it replaced with only assembling and maintaining the engines at Dahod?
The eventual agreement appears to be a win for Siemens, which no longer needed to transfer knowhow to the Indian Railways, and also no longer needed to involve a full fleet of its own human resources for their maintenance.
The Wire asked Siemens about what led to the change in the agreement regarding the training of railway staff in the manufacturing of those engines at Dahod. Siemens spokesperson Bijesh Kamat did not address the question, and instead said what is already known in an email: “Following the award to Siemens for design, engineering, manufacturing and maintenance of 1200 locomotives of 9000 horsepower (HP) electric locomotives, Siemens factories in Nashik, Aurangabad and Mumbai have been manufacturing critical components for the project, with final assembly, testing and commissioning performed at the Indian Railways’ factory at Dahod.”
The cost of the project that had been mentioned in the LoA, Rs 26,000 crore, has remained the same in the agreement despite other changes.
The railway minister, in that May 26 speech in the presence of Modi and Gujarat chief minister Bhupendra Patel, showered praise on Gujaratis for being “thrifty”, implying that the project could be pulled off thanks to the prudence of the state’s people. But Kamat’s answer establishes that key components for the locomotives were manufactured in neighbouring Maharashtra, not Gujarat. Only assembling, testing and commissioning were done in the Gujarat facility.
Who were the bidders?
In that December 2022 press statement, the railway ministry didn’t give details of the bidders for the Rs 26,000 crore contract. It had only stated that the “entire bid process has been conducted in a fair, transparent and competitive manner and awarded in record time through electronic bidding”.
“Ministry of Railways had decided to conduct a single stage two packet bidding process for obtaining technical and financial bids for selection of a suitable Technological Partner. The Notice inviting Bid for selection of Technological Partner was issued on April 20, 2022. Financial bids were opened on December 6, 2022. After detailed evaluation of the bids, Ministry of Railways has declared Siemens Limited, India as the selected Technological Partner.”
Siemens has worked with the Indian Railways in the past, but the Dahod contract is the biggest one it has landed with the ministry, yet. Siemens spokesperson Kamat confirmed this to The Wire.
The Wire, in a questionnaire sent to the railway minister’s official email, had sought information on who were the other bidders for the contract.
A big player in the field is Alstom, which, as per its website, has been working to upgrade the Indian Railways “for over a 100 years”. Today, the French company is involved in preparing various city metro systems including those at Delhi, Lucknow, Chennai and Mumbai.
News reports and Gujarat government’s announcement have said that the Dahod 9,000-horsepower locomotives manufactured by Siemens would have the power to haul “4,600 tonnes” at “75 km per hour”. Siemens’ press statement, though, says each engine would have a “maximum speed of 120 km per hour” and “have the haulage capacity of 5800 tonnes”.
Alstom, had, in 2015, entered into a joint partnership with the Indian Railways to produce 800 units of a far more powerful engine – of 12,000 horsepower and capable of hauling 6,000 tonnes at a top speed of 120 kilometres per hour for a cost of 3.5 billion euros. Alstom had called these “the nation’s most powerful ‘Made in India’ electric locomotives”; also “the largest Foreign Direct Investment project in the Indian Railway sector”. These units, also called WAG-12B, are being delivered by the company to the railways.
Incidentally, in 2017, Alstom had announced its merger with Siemens. However, in 2019, the European Union rejected that merger of these rail giants citing “serious” effects on competition. “The Commission prohibited the merger because the companies were not willing to address our serious competition concerns,” the EU had said.
Conflict of interest?
A former Indian Administrative Service (IAS) officer of the Odisha cadre, Ashwini Vaishnaw was posted at the Prime Minister’s Office in the Atal Bihari Vajpayee government around 2003. In the late 2000s, Vaishnaw quit the service for a study break in the United States, and then joined the corporate sector.
During that stint which continued till about 2012, Vaishnaw served as the managing director of GE Transportation which also specialises in the railways. Later, he moved to Siemens Locomotives and served as its vice-president in India. After working for Siemens, Vaishnaw chose Gujarat to become an entrepreneur by launching two automotive component companies – Three Tee Auto Logistics Pvt Ltd, and Lee Gee Auto Components Pvt Ltd. He had stepped down as the director of both the companies in May, 2017.
The Wire has written to union railway minister Vaishnaw asking if the biggest ever contract of the railways awarded to his former employer during his tenure could be considered a conflict of interest.
The Wire has also asked the minister what the revenue model of the project is, considering Siemens would be the one assembling and testing the locomotives at the Dahod facility, unlike what was announced during the issuance of the LoA. What would the Indian Railways’ earnings from the project be?
The ministry responds
Five days after the news report was published, the Ministry of Railways responded to The Wire’s queries. The answers were emailed by Dharmendra Tiwari, additional director general (media and communications) at the ministry, on June 23 afternoon.
The report had highlighted that the company that has been manufacturing for the Indian Railways high powered locomotives is the French giant Alstom. The ministry confirmed that the company which underwent the tendering process along with Siemens for the Dahod contract, was Alstom.
In his response, Tiwari has said, “The tender for manufacturing and maintaining 9,000 hp electric locomotives was executed in a transparent manner. There are two electric locomotive manufacturers globally who have the capability to design and manufacture 9000 hp electric locomotives – Alstom and Siemens – both of them participated in the tender.”
He said the tender evaluation process was led by “a team of technical and financial experts, in line with the processes that Indian Railways has followed.”
“In the technical evaluation, both Alstom and Siemens were equally placed, [though] in the financial bid, the bidder with the lowest price [Siemens] was awarded the contract,” he added.
The ministry, in its defence, said, “The price discovered through this transparent method is highly competitive. The contract is as per the tender documents. There is no change in the tender conditions.”
To the question posed to Vaishnaw by The Wire on whether he would think it was in conflict of interest to have granted the biggest ever railway contract to Siemens, his former employer, by the railway ministry of which he is the minister, Tiwari stated that “there is no question of conflict of interest because the process was followed as per rules and procedures that Indian Railways has always followed.”
“There is no involvement of the Minister of Railways in the tender evaluation process. Moreover, both Siemens and Alstom have been working with Indian Railways for many decades,” he added.
To another pointed question on why manufacturing of the key components were carried out by Siemens at its facilities in Maharashtra when the PIB’s statement in 2022 had explicitly stated that the engines would be manufactured at Dahod, and also that the railway staff at Dahod would be trained in their manufacture but would instead be utilised only in maintenance work, the ministry didn’t give a direct answer.
Instead, it emphasised on the ‘Made in India’ tag of these engines, saying, “As per the current manufacturing process, about 89 percent of the components used in manufacture of Dahod locomotives are made in India. Railway component manufacturing ecosystem is rapidly growing in India. A locomotive is a very complex machine and its components are equally complex. They are manufactured at various locations in India and supplied to various locomotive manufacturers. Very few countries in the world can claim the level of manufacturing components that India has been able to achieve because of the thrust given to manufacturing in the last decade.”
The ministry has re-confirmed that the locomotives that would finally be commissioned by the Dahod facility “will be maintained at four depots – Visakhapatnam, Raipur, Kharagpur, and Pune.”
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