Following ownership dispute, Vande Bharat sleeper trains plan hits a snag

India's plan of rolling out Vande Bharat sleeper coaches has hit teething trouble following an ownership dispute between the Russian and Indian partners of the consortium that won a Rs 40,000-crore supply and maintenance contract.

A top executive of Russia's leading rolling stock manufacturer TMH Group told ET that the company has reached out to top Indian government officials as venture partner state-owned Rail Vikas Nigam Ltd is now pressing for a higher stake in the joint venture formed to supply the coaches. This, he said, is in violation of an "irrevocable and binding agreement" between the two entities.

The TMH-RNVL consortium had won the bid to supply 120 of the 200 Vande Bharat sleeper trains on offer. However, Indian Railways is yet to sign the contract for the supply with the consortium. People familiar with the matter said the rift between the consortium partners has delayed the signing of the contract.

As per the memorandum of understanding, inked before the submission of bid, Metrowagonmash (MWM), a subsidiary of TMH Group, held 70% stake in the JV, while Russian train control systems producer LES held 5%, and RVNL the balance 25%.

RVNL is now eyeing 69% stake, which according to Sergey Medvedev, head of business development in India, TMH Group, is a departure from the original arrangement agreed upon by the parties.

Medvedev claims that the Russian and Indian partners had signed an “irrevocable and legally binding agreement” while bidding for the Vande Bharat trains contract and the company was well placed to supply the rolling stock.

“TMH has extensive experience in manufacturing rolling stock and executing projects as large as the Vande Bharat. We are best placed to lead the joint venture," he said. “For this project, the three partners – MWM, RVNL and LES – had signed an irrevocable, legally binding agreement.”

RVNL and Indian Railways did not respond to queries sent by ET.

Medvedev said most of the required equipment to be used is available locally. “Suppliers have already been identified and contracted for a long-term tie up,” he said, adding that this had been factored in while bidding for the project.

Indian Railways had invited bids for Vande Bharat train sets in December of 2022 and they were opened in March.

At Rs 120 crore, the TMH-RVNL consortium’s bid was significantly lower than that of competitors, including BHEL-Titagarh (Rs 139.8 crore), BEMLBEML-Siemens (Rs 145 crore), Alstom Transport (Rs 164.52 crore), and Medha Servo Drives-Stadler Rail (Rs 165 crore).