Stadler Rail awaiting big contract before investing in India

Indian recently opened up its railway infrastructure to 100% foreign direct investment, specifically high-speed rail and tracks Keystone

Swiss company Stadler Rail has confirmed plans to open a spare parts production unit in southeastern Indian state of Andhra Pradesh provided it wins government contracts. It is currently one of the bidders to set up a rail coach factory in the state of West Bengal. 

A spokesperson for the firm confirmed that the city of Visakhapatnam in the state of Andhra Pradesh, is one possible location for a production unit. The state’s chief minister Chandrababu Naidu recently met with the company’s officials in Zurich and his office had issued a press release stating that Visakhapatnam could be potential choice for a unit manufacturing aluminium spare parts. Up to 3,000 jobs could  be created.

However, the deal is not yet finalised and at this stage the city of Visakhapatnam remains a contender. 

“Stadler is evaluating possible locations for a production unit in India. Visakhapatnam (Vizag) is one possible location,” the spokesperson told swissinfo.ch on Wednesday.

Another factor that will determine the extent of Stadler’s investment in India is the outcome of its bid to manufacture 5,000 electric rail cars in Kanchrapara in the state of West Bengal. It is one of several global players such as Canada’s Bombardier, Germany’s Siemens, and France’s Alstom in the race to win the ten-year contract worth close to CHF3 billion. 

“In case Stadler would be the selected bidder for the Kanchrapara EMU tender it will be setting up production units in India,” said the company’s spokesperson. 

Track record 

Around 250 Swiss companies are based in India through joint ventures, subsidiaries or branch offices. So far, Andhra Pradesh has a poor track record in attracting Swiss companies, despite regular attempts by Naidu to court investment. Only one company – Willemin Macodel, a machine tool company – has established itself in the state compared to 26 in neighbouring Karnataka.

Despite meetings with several Swiss companies and announcements of “commitments”, Naidu has not been able to convert them into concrete projects. An example is the announcementExternal link in January last year of a “mega textile investment proposal” by Swiss textile company Gherzi. One year later, the project has yet to be realised. 

“We are in the preliminary stages of negotiation,” Shripad Joshi, lead consultant for Gherzi, told swissinfo.ch