What are your views on the recently concluded Union Budget?
We welcome the progressive and growth-oriented Union Budget presented by the Finance Minister for 2022-23. India is poised to regain its title of the fastest-growing large economy with a 9.2 per cent GDP growth estimated for the coming year. With an enhanced capital expenditure outlay of 35 per cent as compared to last year, core infrastructure segments including railways and urban transport stand to benefit and will have a huge multiplier effect on the economy.
The highlight of the budget was the announcement to introduce 400 new Vande Bharat trains over the next three years, the introduction of the state-of-the-art KAVACH TCAS signalling systems over 2,000 km of the railway network, larger investments to provide for sustainable and integrated urban transport systems. The total budget estimates of Rs 23,875 crore for MRTS & Metro railway projects will incentivise faster implementation of projects and the standardisation of metro design systems will provide the much-needed stability for manufacturers.
The development of 100 cargo terminals over the next three years will also improve India's competitiveness in faster and cleaner logistics and freight movement by rail. The announcement of new legislation regarding Special Economic Zones is a welcome step as it will help India enhance the competitiveness of its exports and integrate successfully with global supply chains.
From a policy standpoint, the launch of the next phase of Ease of Doing Business (EoDB 2.0), is a step in the right direction. Modernised rules for evaluation of complex tenders especially transparent quality criteria and provisions for payment of 75 per cent of running bills mandatorily within 10 days will encourage faster dispute resolution.
Introducing Production Linked Incentives (PLI) scheme for railway manufacturers and exporters promoting ‘Make in India' would have been ideal for fast-tracking the implementation of projects and supporting the manufacturing ecosystem. We were anticipating FM's announcement regarding plans for the private train operations; however, this budget provides the overall push towards economic growth and addresses the key priorities of the Government.
Alstom has recently inaugurated a new components manufacturing facility in Coimbatore. Tell us more about this facility.
Alstom's industrial presence in Coimbatore has evolved across three sites since 1978. This new site is spread over a total area of 15 acres and has an installed capacity of 2.1 million hours, which will offer a higher degree of production diversity & complexity - integration & testing of tractions, auxiliary convertors, cubicles, driver disks, and Rolling Stock looms. The site will create 10,000 direct & indirect jobs and currently has a gender diversity rate of 20 per cent. The Coimbatore site currently delivers not just to Alstom's Indian sites but also to the major sites across five continents - Asia, Australia, Europe, North America and South America. Some of the key countries include - France, Canada, Italy, Belgium, Germany, Netherlands, Saudi Arabia, Vietnam, UAE etc.
The opening of this facility is a testament to our commitment to the government's flagship ‘Make in India' & ‘Atmanirbhar Bharat' initiative. With our enhanced capabilities and a team of talented and dedicated employees, we are proud to be a catalyst in India's manufacturing-led growth story. We have been the preferred mobility partner on various Indian projects and are keenly looking forward to becoming a leading supplier of components across Alstom's sites globally.
In line with Alstom's Sustainability Goals for 2025, this site has undertaken several sustainability measures like - targeting 80 per cent of regular activities to be run on green energy, utilising 100 per cent of natural light during daytime, rainwater harvesting, reusing 100 per cent of the sewage treated water, etc. The factory also boasts of a stellar record in safety. Cumulatively, the factory has successfully achieved 10+ years of ‘accident-free' man-days.
In line with its commitment to contributing sustainably to communities in need, Alstom is taking up various projects around the factory. To reach out to a total of over 100,000 direct beneficiaries, the company has pledged Rs 3 crore for various CSR projects in the next three years. Some of these activities include - water conservation, sustainable rural living, and youth skilling. With this stronger industrial and commercial base with the purpose to offer a broad range of components, Alstom is much stronger to address the mobility needs of India and the world.
Over the years, how Alstom has contributed to the Indian economy?
India has always been a pivotal market for Alstom, and we continue to deepen this partnership by customising mobility solutions for the country. We are delighted to share the impact/contribution of our presence in India via this report, especially in the areas of job creation, sustainability, and the larger community. All this is reflective of the hard work and dedication of our people, and all our stakeholders in this extraordinary journey. We are committed to providing our unflinching support as an enabler in India's growth story and helping fulfil the government's key ambitions of ‘Make in India' and ‘Atmanirbhar Bharat'. We believe in high localisation and building a supply chain ecosystem.
Alstom India buys €331 million worth of goods and services, among which 75 per cent is made with Indian suppliers. Overall, the company has invested €142 million locally in the last five years. In addition, the firm has conducted 21 technology transfers across Alstom locations, to suppliers and other partners. As of March 2021, Alstom had 7,634 direct employees in India. Additionally, the company has supported 71,340 indirect and 27,770 induced jobs across the country. The company is committed to improving its diversity ratio and plans to include 28 per cent of women in management, engineering, and professional roles by 2025 while retaining its position as a Top Employer.
Alstom's eco-design approach focuses on continuously improving the sustainability of its solutions by tracking and minimising their environmental impact throughout their life cycles. For example, the mass of materials and components used in manufacturing rolling stock for Mumbai Metro Line 3 is 96 per cent recyclable and 99 per cent recoverable.
How will the acquisition of Bombardier be a game-changer in the global rolling stock market for Alstom, which includes India too?
The rail market is supported by fundamental growth drivers, such as accelerated urbanisation, public investment strategies, and the worldwide push for the green and digital transformation of transport systems. Despite the pandemic, recent stimulus announcements confirm the development of sustainable mobility and more specifically of rail as a long-term priority. The rail manufacturing market is expected to grow at a 2.3 per cent CAGR by 2025. Integrating Bombardier Transportation in Alstom will have an unparalleled commercial reach in all geographies thanks to the complementarities of the two companies. While the Alstom Group already had a well-established customer base in France, Italy, Spain, India, South East Asia, Northern Africa and Brazil, Bombardier Transportation will bring strong customer proximity in strategic markets such as the United Kingdom, Germany, the Nordics, China, and North America. The Group will have now in particular very strong capabilities in Europe and North America, which represent approximately 75 per cent of the OEM accessible market.
We will offer mobility operators and network providers products and solutions throughout the entire rail value chain. Integrating Bombardier Transportation, Alstom will have the most complete rail portfolio. In Rolling Stock, its portfolio will range from light rail to very high-speed trains, including new strategic products such as people mover and monorail. The Group will be able to serve its clients in the Services space with a wider maintenance facilities network and larger predictive maintenance capabilities. With a fleet of 150,000 vehicles, Alstom will have the largest installed base worldwide, a unique springboard to further expand its leadership in Services. Its Signalling product line gains significant scale, becoming No. 2 worldwide in terms of revenue, acquiring technological capabilities and commercial capacities in strategic markets, complementary to Alstom's.
Alstom is already a pioneer in mobility with leading innovations such as the recent hydrogen train, autonomous train operation, energy-efficient rolling stock and infrastructure. Bringing together c.17,500 engineering and R&D talents from both groups, consolidating a rich legacy of 10,000 patents and incorporating significant additional technologies from Bombardier Transportation, for example in predictive maintenance, signalling and digital operations, the Group will be able to develop solutions at a faster pace and on a larger scale to make the mobility of tomorrow a reality. Alstom is accelerating towards its ambition: be the global innovative player for sustainable and smart mobility.
Today, almost all metro lines in India have a ‘bit of Alstom' in them. Take us through your envisaged new projects and how Alstom is contributing to the Make In India campaign through its investments and JVs?
We have already have begun manufacturing the regional commuter and transit trains for the Delhi-Ghaziabad-Meerut semi-high-speed rail corridor for RRTS Phase 1. In May 2020, the company was awarded the contract to design, build, and deliver 210 regional commuter and transit train cars along with comprehensive maintenance services for 15 years.
As per the contract, we will deliver 30 regional commuter trainsets of six cars each and 10 intracity mass transit trainsets of three cars each. In accordance with India's ‘Aatmanirbhar Bharat' vision and the Make-in-India guidelines, these RRTS trains are 100 per cent indigenously manufactured, with over 80 per cent localisation and are being manufactured in Alstom's factory in Savli (Gujarat). This facility will produce the bogies, car bodies and undertake train testing. The propulsion systems and electricals are being manufactured at the company's factory in Maneja (Gujarat). his project is a game-changer in India's regional rail segment, benefitting millions of people and contributing towards socio-economic development. We are happy to begin local manufacturing of these technologically advanced trains for the country's first semi high-​speed commuter service. At Alstom, we focus on developing sustainable products and solutions that stand the test of time by operating efficiently for decades to come.
Recently, we have handover over the first trainset for the Kanpur metro, to Uttar Pradesh Metro Rail Corporation (UPMRC). As we completed the acquisition of Bombardier Transportation (BT) in January last year, going forward, we will be responsible for the delivery of Kanpur & Agra metro rolling stocks and signalling, including the scope of all BT technologies. The value of the project is around Rs 2,051 crore, and our scope of the work includes the design, build and delivery of 201 metro cars (67 units of MOVIA metro three-car trainsets) and an advanced signalling solution (CITYFLO 650). The customer also has a provision to exercise an option for an additional 51 metro cars.
Last year April, we successfully manufactured and delivered the 100th electric locomotive to Indian Railways. As part of the contract worth €3.5 billion won in 2015, we will be supplying 800 fully electric high-powered double-section locomotives of 12,000 HP (9 MW) for freight service, capable of hauling ~6,000 tonnes at a top speed of 120 km/hr. This is the largest Foreign Direct Investment project in the Indian railway sector.
The Prima T8TM WAG-12Be-Locos are built at one of India's largest integrated greenfield manufacturing facilities at Madhepura (Bihar). Spread across 250 acres, this industrial site is built to international standards of safety and quality. The site has installed a production capacity of 120 locomotives per annum and Alstom has progressively achieved over 85 per cent indigenisation. With these powerful e-Locos being manufactured within the country, India has become the 6th in the world to join the club of countries producing high horsepower locomotives indigenously.
That said, Alstom has been awarded by Mumbai Metropolitan Region Development Authority (MMRDA) the contract to design, manufacture, supply, test, and commission 234 metro cars, including personnel training for Line 4 and the extension corridor (Wadala-Kasarvardavali-Gaimukh). The order is valued at €220 million (Rs 1,854 crore).
This first order, following our merger with Bombardier Transportation, demonstrates our continued commitment towards partnering in the country's Make-in-India mission. We are glad to have been awarded this prestigious project by MMRDA and look forward to commencing work on this.
The Line is a 35.3-kilometre-long elevated corridor with 32 stations. It will provide interconnectivity among the existing Eastern Express Roadway, Mono Rail, the ongoing Metro Line 2B (D N Nagar - Mandale), and the proposed Metro Line 5 (Thane - Kalyan), Metro Line 6 (Swami Samarth Nagar - Vikhroli). Mumbai Metro Line 4 & 4A is expected to reduce the current travel time by 50 per cent to 75 per cent, depending on road conditions.
With all projects combined our total orderbook is around €4.1 billion.
