‘Railway was the first sector where sanctions were imposed… None of our projects stopped even for a week’: Russia’s TMH CEO Kirill Lipa

3/12/2024 - Updated 1:34:11 pm

Courtesy: The Indian Express

TMH CEO Kirill Lipa said the plan was to start Vande Bharat production this year, but it will take several months due to the redesign required due to changes sought by Indian Railways,

Transmashholding (TMH), the largest manufacturer of locomotives and rail equipment in Russia, said that the company investments in India would facilitate the supply of high-value enginnering products from India to Russia and could go a long way in balancing the Indo-Russia trade deficit. The company also said that it is looking to manufacture other rolling stocks, besides the Vande Bharat coaches that it may start producing by 2025. Last year, the Indian Railways signed a contract with Kinet Railway Solutions Limited, an Indo-Russia joint venture that entails a major shareholding by TMH, for supply of 1,920 Vande Bharat Sleeper coaches. The production was expected to begin by the end of this year, but in May, Indian Railways sought to redesign coaches by adding more toilets and a pantry car in each carriage. This has been cited as a reason for delays in the delivery schedule. Kirill Lipa, CEO of TMH, spoke to The Indian Express at his Efremova Street office in Moscow. Edited excerpts: What TMH can offer to India and Vande Bharat trains? When I present TMH to anybody in the world, I say that in order to understand who we are, let's first look at the map of Russia. You have to fly around nine hours to go from one end to another. Russia, in terms of Railways, is the most advanced country in the world. Because usage of the network is intense. We are among the top five companies that are dedicated to the Railway sector. CRRC of China is the largest rolling-stock manufacturer. Then there are European companies Alstom, General Electric, Siemens, and us. We are 100 per cent privately owned. We produce everything related to Railway infrastructure. Underground metros, on-the-ground trams, EMUs, DMUs, passenger coaches, locomotives, freight wagons. Whatever we do is being developed locally by our TMH engineering team. History and historical traditions are very important for this. What is the current status of Vande Bharat trains contract? We have taken over the Latur factory in Maharashtra (the Marathwada Rail Coach Factory of the Rail Vikas Nigam Ltd). The plan was to start it (production) this year, but due to the changes sought by Indian Railways, we need to redesign the coach. It will take several months. But anyhow, we will do it next year. I cannot say exactly which month we will be able to start the production. I was very positively surprised that the contract with Indian Railways was signed two weeks after the announcement of sanctions against our company in the United States. I had a discussion with the Indian officials and they said that they will act according to the interest of the country. What are the challenges given the changes being sought? The significant changes sought involve the design of coaches. From the outside, it seems that an additional lavatory is not an issue, the problem emanates from the engineering point. You need to change the whole layout of the coach like windows, seats etc. We designed it according to the contract. The pantry is another issue. In some way, the whole train set will be redesigned. We have insisted on certain compensation for the redevelopment of the product because it takes time and finance. If you look into the tender, our offer was 14 per cent less than the second bidder. To my understanding, even if we increase the price by certain numbers, we will not exceed the next bidder. So in any way, we are not exceeding the ceiling. Did you seek any assistan

ce from the Russian government? Yes, we raised this issue in the last intergovernmental meeting between India and Russia in New Delhi, in the presence of India's foreign minister S Jaishankar and First Deputy Prime Minister of Russia Denis Manturov. We raised them in the right manner. We are not creating any pressure, but we need a very clear explanation on the matter. In some cases I do not understand the approach of Indian Railways. There are some bureaucratic hands behind this. Also we do not have any past experience in India. In my opinion, all that we are discussing right now can be resolved within two hours. But we are spending months just sending letters and waiting for an explanation. Are the sanctions imposed by the West affecting you? Whatever sanctions they are imposing on us, we can keep on moving ahead because we were never dependent on Western technology. We are also not closed to the international world; we have joint ventures across the country. Railway was the first sector where sanctions were imposed by European countries and the US. None of the projects stopped even for a week. We immediately switched to other suppliers, local suppliers etc. Then, who are the suppliers of Vande-Bharat coaches? I don't want to name the supplier because once you put it in the newspaper, it will be a very risky situation for them. The development of the local Indian market is so high that we got the supply of certain components in India even before the sanctions. However the contract was with some European companies. So now we just have to remove the European companies and sign the contract directly with the Indian companies. What is the actual reason to invest in India? Today the trade between India and Russia is demanding the balancing of the trade. Right now, it is negative towards India, so today India is importing more from Russia than exporting to it. We are ready to invest in India because its economic growth and interest rates are very different. We want to develop in India so that some of them can be supplied to Russia as well. Geopolitically, we are friends, but we think that these friendships should be based on some practical considerations. It cannot be limited to just love for Russian poets, writers, ballet, and Indian culture, dance and movies. We are practical people, so we should create some trade opportunities. What are the other projects that you are looking for in India? Well, when I need to explain to non-engineers why the Moscow metro is better than any other in the world, I tell them one example. Some years ago we had a football tournament and one million passengers in the underground watched the football. I believe that we can bring this knowledge to India and your cities. Then we can come with EMUs and the idea is to operationalise it like a metro. So we will have an EMU every two minutes. Also to connect the multiple stations of metro and EMUs. So the passenger can travel with one ticket in both modes of transportation. Sleeper coaches are our priority. We produce more than 1,500 sleeper coaches per year. Do you think that you can learn anything from India? You can always learn. In India, you have a different environment for the usage of the fleet. For eg. humidity. In Russia, we have the highest and lowest temperature. So we have to produce the products accordingly. We need this knowledge for other countries as well. (The writer was in Russia at the invitation of TMH)