Indian Railways has signed two joint venture agreements with global transport majors General Electric and Alstom Transport for setting up two locomotive factories in Bihar with an investment of Rs 40,000 crore. US-based GE will set up a diesel locomotive factory at Marhowra that will supply 1,000 engines of 4,500 and 6,000 horsepower over 11 years. France’s Alstom will set up a manufacturing facility at Madhepura to supply 800 electric locomotives  of 12,000 horsepower over 10 years. The factories will be set up at a cost of Rs 1,300 crore each.

GE was awarded the Rs 14,656-crore contract for diesel engines last month, while Alstom had bagged the Rs 21,389-crore contract. Finance Minister Arun Jaitley said: “The projects are part of the government’s decision to invite foreign direct investment (FDI) in rail infrastructure. The projects are a win-win for all.”

The electric locomotive factory would create 3,000 jobs when it would be commissioned in 2018. The rail ministry had opened financial bids for the two projects in September. The ministry said the locomotives would be used for heavy-haul operations in the Dedicated Freight Corridor project and would lead to development of ancillary manufacturing units in Bihar.