Bangalore, September 20, 2005 (Business India)

The defence public sector Bharat Earth Movers Limited has entered into a significant memorandum of understanding with HMT Limited to commence the process of drawing financial assistance provided by Planning Commission, Government of India, for building metro infrastructure in Bangalore.

The Planning Commission has agreed in principle to grant Rs 108-crore financial assistance for building metro infrastructure to achieve and attain global competition in India through transfer of technology from a global leader and to produce metro coaches with substantial indigenisation.

The financial assistance is routed through ministry of heavy industry through one of their PSUs, HMT Limited, Bangalore in equity route.

During the current year 2005-2006, Planning Commission has granted an amount of Rs 25 crore out of Rs 108 crore and the MOU has been signed accordingly to enable BEML to draw money to commence the metro infrastructure building. The MOU, inter-alia, contains giving work assistance to HMT from BEML for reconditioning of machines & machine tools and engaging HMT as one of the vendors for the supply of spares and components and also seek assistance for supply of machinery or procurement of machine tools from outside sources for metro infrastructure building.

The Planning Commission has also agreed in principle to provide grant of Rs 125 crore for establishing world-class R&D centre for excellence for metro dedicated to develop, update existing metro technology, testing components and spares and develop prototype metro coaches as may be specifically desired by prospective customers like state metro corporations such as Delhi Metro, Bangalore Metro, Mumbai Metro etc. Of the total grant of Rs 125 crore, Rs 56 crore has been provided during the current year budget and will be made available to BEML for developing centre of excellence for metro. An independent society is being formed with BEML and HMT as founder members among others to establish world-class R&D facility for metro.

The MoU to this effect was signed between BEML Chairman & Managing Director Mr V RS Natarajan and HMT Chairman & Managing Director Mr MS Zahed in Bangalore on Sept 16,2005 in the presence of Mr.Alok Perti, Joint Secretary (Exports), Ministry of Defence and Mr A Didar Singh, Joint Secretary, Dept of Heavy Industry, Govt of India.

The Dept of Industrial Policy & Promotion, Govt of India has already cleared the proposal of BEML for payment of licence fee to M/s Rotem, South Korea, towards transfer of metro technology to BEML and subsequently BEML has already paid Rs 10 crore to Rotem towards this.

The existing metro customer, Delhi Metro Rail Corpn has obtained approval from Group of Ministers for Phase II expansion requiring 312 nos metro coaches and BEML is soon expected to get orders for this. BEML is also mustering to get orders from Bangalore Metro which is under final phase of approval from Govt of India. BEML has set itself a target of Rs 2200 crore for the financial year 2005-06.