Under $3.25 billion deal, Siemens to deliver 1,200 freight trains to India

Zurich:

Siemens has signed a 3 billion euro ($3.25 billion) contract to supply and service freight trains in India, the biggest locomotive deal in its history, the German engineering company said today.

Siemens will deliver 1,200 electric locomotives and provide servicing for 35 years under the agreement, the largest ever in India.

The Siemens-designed 1,200-horsepower train, with a top speed of 120 km (75 mi)/h, will be assembled at an Indian Railways factory in the state of Gujarat over the next 11 years, with deliveries starting in 24 months.

“These new locomotives … could replace 500,000 to 800,000 trucks over their lifecycle,” said Michael Peter, CEO of Siemens Mobility.

The order was a big step forward for Siemens in India, Michael Peter told Reuters, adding the company was previously very strong in North America and Central Europe in rolling stock, but mainly provided components and infrastructure in India.

“India is looking for technology, better efficiency and longer life for its trains,” he said in an interview. “India built its own trains in the past, but they want to increase reliability and average speed.”

The deal is the latest bumper contract won by Siemens after signing a €900 million deal for a new metro line in Sydney, Australia, in December.

Michael Peter was confident of reaching Siemens’ target of growing revenue in the mobility business by 6-9% this year, although the contract will mainly reflect orders in 2023.

He said Siemens is also looking at other train contracts in India, the world’s largest rail market where 24 million passengers travel on more than 22,000 trains daily.

Siemens, whose first contact in India – the London to Calcutta telegraph line – dates back to 1867, said the government is looking to increase the rail network’s share of freight traffic to 40-45% from the current 27%.

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