New Delhi: State-run Bharat Heavy Electricals Limited (BHEL) has moved higher by 10% in intraday trade on the back of heavy volumes after Prime Minister Narendra Modi & Japanese PM Shinzo Abe on Thursday laid foundation stone for India’s first bullet train project between Mumbai and Ahmedabad.
BHEL May Make Rolling Stock For Bullet Train
- BHEL is eyeing a major role in the Mumbai-Ahmedabad high-speed rail project, ranging from manufacturing coaches & civil construction work to laying down rail links.
- In a huge boost to India’s largest power equipment maker, it was announced on Thursday that the joint venture (JV) between Bhel & Japan’s Kawasaki Heavy Industries (KHI) will manufacture rolling stock for the bullet train project.
- The announcement, which comes during the ongoing visit of Japanese Prime Minister Shinzo Abe, will help BHEL, which is positioning itself as a transportation solutions provider, given the uncertainty in India’s fast-changing power sector.
Technology Collaboration Agreement Between BHEL and KAWASAKI
- The BHEL had entered into a technology collaboration agreement with Kawasaki Heavy Industries, (KHI), Japan for the manufacture of stainless steel coaches for metros.
- KHI is a manufacturer of heavy equipment & its rolling stock company has supplied EMU trainsets to various countries like the US, Singapore, Taiwan & Hong Kong, alongside Japan.
- KHI is also the manufacturer & supplier of the Shinkansen High Speed Bullet Trains, proposed to be introduced in India on the Mumbai-Ahmedabad High Speed Rail Corridor.
- The pact will enable BHEL to produce stainless steel coaches indigenously.
- The Agreement covers establishing a state-of-the-art design, engineering & manufacturing facilities at BHEL, India using Japanese technology.
- The pact will also entitle BHEL for all technology advances & upgrades.
Advancing ‘Make in India’ In HSR Projects
- According to a joint statement issued on Thursday,“The two prime ministers committed to advancing ‘Make in India’ and transfer of technology in HSR (high-speed rail) projects, and expressed optimism in this direction. They welcomed the series of business matching efforts to establish India-Japan cooperation, such as the prospective technology collaboration between Kawasaki and Bhel.”
- The joint statement says,“Both sides will explore further strengthening of partnership in high-speed railways. They also recognized that there is potential for further collaboration between India and Japan in the modernization and expansion of the conventional railway system and the construction of metro rails in India.”
- A senior Bhel executive said,“We are looking at transportation from a holistic stand point and apart from manufacturing coaches, the bullet train project may also include electrification, signalling, civil construction work, including rail links.”
India To Adopt Shinkansen technology, Innovate & Export To Other Countries
- While announcing the advancement of the bullet train deadline by a year recently, Railway minister Piyush Goyal said India will adopt this technology, innovate and then export it to other countries.
- The public sector unit (PSU) has already started work on becoming a turn-key metro rail end-to-end solutions provider & has a technology collaboration agreement with KHI for the manufacture of stainless steel coaches & bogies for metros.
- For the bullet train, BHEL has a memorandum of understanding (MoU) which will have to be translated to a technology collaboration agreement.
Bullet Train Project- Great opportunity For BHEL & Indian Transportation Sector
- Amit Sinha, partner at consulting firm Bain & Co. who leads its industrial goods & services practice said,“This is great news for Bhel and the Indian transportation sector. However, Bhel must capitalize on this opportunity to build long-term organic capability in terms of people, systems, technology. In addition, they should plan to build the ecosystem required to support this segment and also target becoming a formidable supplier in global market.”