GE warns India about risks to altering $2.5 billion diesel locomotives deal
New York: General Electric Co. warned Indian officials that walking away from a multibillion-dollar locomotive contract would harm job creation and have a chilling effect on investment.
Altering the deal would “undermine one of the most promising infrastructure projects in the country,” GE said on Tuesday in an emailed statement. India may also be on the hook for “substantial fees associated with this project,” the company said.
The pointed comments underscored the stakes of possible changes to the 2015 agreement, which called for GE to establish a factory in Bihar and build 1,000 diesel locomotives for Indian Railways. The roughly $2.5 billion contract marked a major victory for GE Transportation, which has been struggling recently with a downturn in the market.
The partnership is in question following recent comments from Piyush Goyal, the country’s new railways minister, suggesting that India would move away from diesel locomotives in favour of electric ones, which GE doesn’t make. The situation is under review and no decision has been made, a rails ministry official said.
GE vice chairman John Rice plans to meet with Indian officials on Wednesday. The Boston-based manufacturer said it expects the contract to move forward.