French politicians voiced concerns on Tuesday that a planned multibillion dollar merger of the rail assets of Alstom and Siemens could give the German company the upper hand.

Two sources familiar with the matter told Reuters that the French company plans to pay shareholders a special dividend if the deal does go through.

Siemens is expected to opt for a deal with Alstom rather an alternative with Canada’s Bombardier, two sources familiar with the matter told Reuters.

Siemens Mobility is set to be merged into Alstom, in which Siemens would hold 50 percent plus one share, while the chief executive would be Alstom’s current boss Henri-Poupart Lafarge.

The likely transaction has political ramifications, since the French state owns around 20 percent of Alstom.

A special dividend would even out the value of Siemens and Alstom, which has too much cash on its balance sheet, to smooth the intended 50-50 joint venture, one of the sources said.

“Will there be a special dividend? Yes,” said the second person.

Siemens and Alstom are strong in high-speed intercity trains with their ICE and TGV models.

Siemens is also the leader in signalling technology, while Bombardier – whose transportation headquarters are in Berlin – is stronger in commuter and light-rail trains.

Siemens stands to gain control of Alstom’s main business, since all of Alstom’s divisions deal with the railways and transportation industries.

SIGNS OF BACKLASH

Several politicians and French trade union activists expressed concerns over France losing control of its TGV high-speed train – a symbol of national pride that has highlighted French engineering skill – and over possible job losses.

Shares in Alstom, which had rallied in recent sessions on anticipation of a deal, slipped 0.25 percent while Siemens shares were broadly flat.

“The problem is that at the end of the day, it would likely be a Siemens company, although we still need clarification on the capital structure,” said Prime Partners fund manager Francois Savary, whose firm holds Siemens shares.

French right-wing politician Nicolas Dupont-Aignan criticised the likely deal on Tuesday as being more favourable to Germany than France, as did far-right politician Nicolas Bay, the National Front’s secretary general.

“The Franco-German partnership must not result in the eradication of French industry!” Bay said on Twitter.

Eric Woerth, a member of the right-wing Republicans’ party, voiced similar views on his Twitter account.

“Is this now the end of Alstom? Will TGV become German? Why does the government accept such an imbalance?”, he tweeted.

A tie-up between the two – aimed at creating a European champion in the railway sector similar to Airbus in aviation – would represent a reconciliation of sorts between Siemens and Alstom.

Alstom snubbed the German company in 2014 to sell its energy division to General Electric in a deal that also saw Paris take a 20 percent stake in Alstom, under a temporary agreement with construction group Bouygues.

Major train and rail technology groups active in Europe have been looking at combining their businesses as larger Chinese state-backed rival CRRC embarks on a global expansion drive.

In July, Alstom reported higher first quarter sales and it maintained its financial outlook.

Analysts at Exane BNP Paribas said a deal should benefit Alstom as growth could be restricted as a standalone company.

“We suggest that, if they participate, value creation would be limited for Siemens but material for Alstom,” said Exane BNP Paribas analysts, who raised their rating on Alstom to “neutral” from “underweight”.

“Aside from the M&A (mergers and acquisition) angle, we believe that commercially, this year will be relatively muted for Alstom. With no large contracts in sight, pressure on free cash flow should intensify due to lack of down payments received,” added the Exane BNP Paribas team.

On platform number one at the Salem train station in south India, a colourful booth stands out amid the chaos of passengers, porters and vendors.

It is a children’s help desk, one of two set up on a pilot basis in India by the charity Railway Children. Here staff are mapping the journeys of thousands of vulnerable children, who have been trafficked, are lost or are runaways.

From the brightly painted booth, officials track the nearly 200 trains that travel daily through Salem junction in the southern state of Tamil Nadu, looking for children at risk on the rail network – the traffickers’ preferred mode of transport.

Campaigners say India’s train stations have become transit points for traffickers, who lure children to cities with the promise of good jobs, but sell them into slavery as domestic workers, to work in small manufacturing units, farming or pushed into sexual slavery in brothels.

“If you travel 45 minutes from Salem junction, you will be in industrial hubs that thrive on child labour or cross a state border into a region with a different local language and culture,” said Valavan Vasantha Siddartha of Railway Children.

“If the journey of trafficked and vulnerable children is not stopped at the stations, the children will simply disappear once they reach their destinations.”

The two 24 hour help desks set up in collaboration with Indian Railways identify children at risk and provide them with shelter and work on reuniting them with their families.

More than 9,000 children in India were reported to have been trafficked in 2016, a 27 percent rise from the previous year, according to government data.

A large number of unaccompanied and trafficked children travel on train across India and many use platforms as shelter or working as hawkers or ragpickers, campaigners said.

“Our officials come across them all the time, travelling ticketless or abandoned on trains and at platforms,” A S Vijuvin, senior railway officer at the Salem station told the Thomson Reuters Foundation.

Between 2014 and August 2017, the Railway Protection Force rescued 28,057 children including 1,502 trafficked children from stations, according to a statement released on Monday.

On an average, at least 25 children are rescued every day from trains and railway premises, the statement said.

RESCUED

Since the help desk was opened at Salem station in March, 431 children have been rescued, a quarter from northern India.

“Many of the children we rescue were heading for the poultry farms in Namakkal, spinning mills in Erode or truck workshops along the highways,” Siddartha said.

“Since we set up the booth, we have noticed that many are travelling on trains that arrive past midnight, when the surveillance is lower.”

Campaigners estimate there is a vulnerable child entering a railway station every five minutes. Girls are particularly vulnerable and often taken off by traffickers within hours of arriving.

The Salem booth, and a similar one in Darbhanga station in eastern state of Bihar, are connected to shelters run near the station.

“Some come to have a bath or just sit in a clean space. We have counsellors at hand and the idea is to eventually help these children,” said Siddartha of Railway Children. “In many cases we reunite them with their families.”

The Indian government has in the past launched campaigns on India’s vast railway network, while a periodic police drive, “Operation Smile”, screens children in shelters, train and bus stations, and on the streets to find the missing.

Indian Railways has now extended these initiatives to cover 82 stations across the world’s fourth-largest railway network.

Ticket checkers, catering staff and policemen travelling on trains are taught to look for signs of trafficking and be on alert for children in large groups, the body language of the adults accompanying them and dubious documents.

“We are constantly relooking at the process because we realise that traffickers are two steps ahead,” Vijuvin said.

“When big stations are covered, they disembark two stops ahead, at the smaller ones. We hope to slowly link every station with these protocols.”

Railway Minister Piyush Goyal will flag off 60 new suburban train services for city commuters tomorrow.

The Central Railway will introduce 14 additional suburban services on its harbour line and trans harbour line each, while the Western Railway would introduce 32 new services on its corridor, which will be effective from October 1,” said a statement issued by the Central and Western Railway today.

Mr Goyal will also release the new suburban time table tomorrow at a function. Increase in additional services on the Western Railway will be effective from October 1, 2017 which includes 17 services in UP (towards Churchgate) direction and 15 services in Down (towards Virar) direction, a statement from Western Railway reads.

The fifth line from Andheri to Virar would also be thrown open for the suburban train tomorrow and Railway Minister will flag off the operation of local trains on this line, it said.

“With these additional introduction, the number of daily suburban services on Western Railway will now go up from 1,323 to 1,355 including 110 harbour services, while total suburban services on Central Railway will increase from 1,660 to 1,688 daily,” the statement added.

The Railway Minister is also scheduled to have a ride in local train from Vile Parle to Churchgate tomorrow, where he will address railway officials,” said a senior WR official.

Indian Railways is working with the Indian Space Research Organisation (ISRO) to devise safety mechanisms to make travel by trains more safer, Union minister Piyush Goyal said today. The minister said that he met ISRO Chairman A S Kiran Kumar few days back and Indian Railways along with RailTel are working together to explore use of space technology for safety in railways.

“Safety is very pressing and urgent need. The discussion which we had was very eye-opening in some sense for me but also very exciting in terms of possibilities that open for engaging with space technologies that ISRO has developed, helping in bringing safer travel to Indian railways,” Goyal said at India Mobile Congress.

There have been a slew of train derailment incidents last month which saw the exit of Suresh Prabhu as the railway minister in the Cabinet reshuffle early this month. Talking about technology at the event, Goyal said railways has been an early adopter of computers which could have been also expanded for various operational processes like safety.

“Way back in 1960s, railways started using computers in a small way and by 1985 you had passenger reservations system all computerised. I remember banking started using computers in 1990s. It was quite an interesting fact for me that in late 1960s railways started using computers. I am delighted about that but I do wish we had expanded those frontiers much to bring technology for safety for example,” Goyal said.

He said modern technologies like artificial intelligence and machine learning are going to change the world works and India has opportunity to look at what is latest across the world and bring it to the country.

“I have asked railtel to look at a programme to connect thousands of railway stations with wi-fi… we can actually provide also the villages around railway stations with wi-fi connectivity and get rural India also connected with new age technology. Let’s give them same kind of opportunity that our children in cities are enjoying,” Goyal said.

The minister said that round the clock access of connectivity and electricity is dream of billions of Indians and the government is making efforts to achieve it.

“Way back in 1960s, railways started using computers in a small way and by 1985 you had passenger reservations system all computerised. I remember banking started using computers in 1990s. It was quite an interesting fact for me that in late 1960s railways started using computers. I am delighted about that but I do wish we had expanded those frontiers much to bring technology for safety for example,” Goyal said.

He said modern technologies like artificial intelligence and machine learning are going to change the world works and India has opportunity to look at what is latest across the world and bring it to the country.

“I have asked railtel to look at a programme to connect thousands of railway stations with wi-fi… we can actually provide also the villages around railway stations with wi-fi connectivity and get rural India also connected with new age technology. Let’s give them same kind of opportunity that our children in cities are enjoying,” Goyal said.

The minister said that round the clock access of connectivity and electricity is dream of billions of Indians and the government is making efforts to achieve it.

Indian Railways is working with the Indian Space Research Organisation or ISRO to build and deploy safety mechanisms for safer rail journeys, union minister Piyush Goyal said today. He said he met with ISRO Chairman AS Kiran Kumar a few days ago and the Indian Railways along with RailTel are working together to explore use of space technology for railway safety.

Mr Goyal said the railways has been an early adopter of computers, and technology could have been expanded for operational processes like safety. “Way back in 1960s, railways started using computers in a small way and by 1985 you had passenger reservations system all computerised,” he said.

“I remember banking started using computers in 1990s. It was quite an interesting fact for me that in late 1960s railways started using computers. I am delighted about that but I do wish we had expanded those frontiers much to bring technology for safety, for example,” Mr Goyal said.

He said modern technologies like artificial intelligence and machine learning will give a chance to India to look at what is latest across the world and bring it to the country.

“I have asked RailTel to look at a programme to connect thousands of railway stations with Wi-Fi. We can actually provide Wi-Fi to villages around railway stations,” he said.

Railways Minister Piyush Goyal addressed the India Mobile Congress in New Delhi today. Apart from Mr Goyal, the three-day event is being attended by communications minister Manoj Sinha, law and IT minister Ravi Shankar Prasad, among others. The India Mobile Congress is the first ever mobile, Internet and technology event in India and is designed to be along similar lines as the Mobile World Congress (MWC) that is held each year in Barcelona, Spain. The event is not affiliated with GSMA, the body that organises the MWC and satellite events across the world, but has been put together by Cellular Operators Association of India (COAI), a group that represents most of India’s leading telcos.

• Its the age of connectivity that will take India to the next level
• Telecom and Railways have a lot of work ahead of us. We have to look at new standards of service to our customers, we have to probably expand the level of technology, but I have no doubt in my mind that this challenge will only enthuse us
• Connectivity is going to be the key to growth, development
• The increase penetration of smartphones brings all of e-commerce and banking in your pocket
• Our lives are revolving around mobile phones
• As we move closely towards m-governance or mobile governance, it’s going to become more easy, more effective and given the pricing of telecom, i think much more economical
• We are seeing so much growth in usage of internet over mobile that we will see 500-600 million people getting connected to the internet
• Great opportunity for start ups and entrepreneurs to integrate technology and public services
• Railways was one of the early users of computers in the country. We started using them in the late 1960s in a small way and by 1985 we had the passenger reservation on computers. Banking started to use computers around 1990s and core banking came in only in the 200-2005 period
• India has demonstrated leadership in mobile
• We are working with Google to bring 400 railway stations Wi-Fi connected
• We are looking at ways to help rural India avail benefits of digital age

In a major ‘festive bonanza’ for Mumbaikars, the railways has decided to add 100 new train services to the financial capital’s train network from October 1.

Railway Minister Piyush Goyal will make the announcement on September 29 during his visit to his home state of Maharashtra, senior railway officials told PTI.

On October 1, the Western Railway will run 32 new services, while on October 2, the Central Railway will start 28 such services. Sixteen new services will be started on November 1.

By January 31, 2018, the national transporter aims to run 24 more services on the Central Railways. Thus, a total of 100 new services will be underway in the next four months — 68 on the Central Railway and 32 on the Western Railway, officials said.

During his last trip to Mumbai, the railway minister had promised that his ministry was working to augment suburban services with new trains.

Spread over 465 kilometres, the suburban railway in Mumbai is the oldest railway system in Asia. It operates 2,342 train services and carries more than 7.5 million commuters per day.

The Mumbai Suburban Railway system is operated by the Railways’ two zonal divisions of Western Railways and Central Railways

Amid rising incidents of derailments and accidents, the Indian Railways has decided to rope in Japanese experts to grapple with the situation.

A high-level team of experts from Japan comprising of representatives of Japan’s ministry of land, infrastructure, transport and tourism (MLIT), JICA (Japan International Cooperation Agency) and railway operators visited India this week and discussed in detail the scope of cooperation between the two countries in the matter of Railway safety.

The Japanese team visited Indian Railway’s coach, wagon and locomotive maintenance facilities and also observed rail welding and track maintenance practices bring followed at present, a senior Railway official said on Wednesday.

MLIT had in response to the request from Indian Railways deputed a team of Japanese Railway experts to India to assess incidents of rail breakage and suggest measures to improve safety in train operations. The official said that the first meeting was held in January with Japanese Experts.

After this, a separate memorandum of cooperation (MoC) on Railway safety was signed on February between Ministry of Railways, Government of India and MLIT, Japan to cover area adequately.

The memorandum envisages cooperation in Rail Safety on area such as maintenance of Track (welding, rail inspection, track circuit etc.) and rolling stock maintenance.

Capacity development has been taken as a technical cooperation project under the MoC to develop Indian Railways’ capacity in respect of the above identified areas.

These areas have been incorporated in the terms of reference of the cooperation.

Japanese Railways is one of the oldest Rail system in the world. Japan is the pioneer in the High Speed Rail ‘Shinkansen’. Japanese Railways has an impeccable record with Safety. Ministry of Railways (GoI) had requested Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) for technical cooperation in Rail Safety.

The cooperation will facilitate exchange of information and visit of experts from both sides. A workshop is proposed to be organised in the first week of Nov’2017 in association with Japanese experts

The government is keen to ensure that it reaches an accord with General Electric over the diesel locomotive project that the US conglomerate is setting up. Indian Railways faces a potential liability of Rs 1,300 crore if it terminates the contract with GE for making diesel engines at Marhowra in Bihar.

“We’re working with GE on the possibility that no party loses anything,” the official said. “Their officials have told us they’ll get back in some time.” While the railways doesn’t regard the penalty as a large amount relative to the savings it will make in the event of a fully electrified network, the government nevertheless expects to reach an accord with GE without resorting to termination. “As per the exit clause, we’ll have to pay Rs 1,300 crore to the company and we’ll also lose equity in the project,” a top railway official told. “It’s not a huge amount given that the savings on account of 100% electrification would be Rs 8,000 crore a year. However, we have no intention of terminating the project and have already offered GE to use the same facility to manufacture either electric locos among many other options.”

In case the railways decides to exit the project, the move would have to be cleared by the cabinet. The project involves an investment of Rs 1,300 crore by GE on 200 acres provided by the railways as its equity contribution, along with an infusion of Rs 100 crore. GE on Tuesday cautioned the railways that it would incur substantial costs in case it went forward with changes to the joint venture. The company also said foreign investment in India will take a hit if this happens. GE executives confirmed that the railways would be liable to pay Rs 1,300 crore. However, the company is yet to analyse the legalities and the liability could be higher in case of termination, they said.

Railways has a total fuel bill of Rs 25,000 crore, out of which Rs 16,000 crore is for diesel and the rest for the purchase of power. The diesel bill would come down by half with 100% electric traction. The prototype of the GE locomotive is to reach India on October 10 after which the Research Designs and Standards Organisation (RDSO) will run tests on the unit. According to the terms of the agreement with GE, the railways will procure more engines after RDSO approval.

The railway ministry signed the contract to manufacture 1,000 diesel locomotives in Marhowra with GE in 2015. The company was offered an assured offtake worth Rs 14,600 crore over a period of 10 years. However, when Piyush Goyal took over as rail minister earlier this month, he declared his intention of having a 100% electrified rail network. The railways has said it won’t require any more diesel locomotives as the remaining 34,000 km of rail network will be electrified in the next four years. India has a 64,000 km rail network.

Study the rise in India-risk, examine options to mitigate this

Cancelling the $2.6 billion diesel locomotive contract with GE, should that happen, would be unfortunate given the questions it raises and the signals it sends. If, just two years ago, this very government thought it needed 1,000 diesel locomotives over a decade, and this is now considered unnecessary, it calls into question the type of planning being done. But if railway minister Piyush Goyal is convinced about his maths, that he will save around Rs 8,000 crore a year by full electrification, he is well within his rights to explore the option of cancelling orders for 1,000 diesel locomotives. His calculations, that the prime minister needs to independently ratify given the enormity of the decision being taken, have to include the feasibility of being able to achieve 90% electrification by 2021—from 45% right now—and factor in various scenarios that include different tax levels on diesel/electricity as well as the feasibility of using electric locomotives in all railway stretches, the need for back-up locomotives, etc. Assuming the maths adds up, it would be foolhardy to not recommend what Goyal is suggesting. After all, when there is a big technology change, both individuals and companies do scrap existing equipment/agreements and move on. In the power sector in India, right now, older PPAs that are very expensive are being sought to be scrapped and replaced with less expensive ones—one of the solutions being examined to lower Delhi’s power costs, for instance, revolves around scrapping some existing PPAs. Cancellation of agreements is a global phenomenon, so if the cancellation does happen, it is important not to portray the event as something that has never happened anywhere in the world before.

But in the final calculation, it is important to factor in the big rise in the India-risk as investors baulk at investing, especially given other unfriendly government policies that this newspaper has written about in sectors like telecom, pharmaceuticals, electricity and agriculture, among others. Once the cancellation takes place, both Indian and foreign investors will look for a higher reward-risk ratio before making new investments, and they will be extra-cautious in areas with a large government role; we are already seeing investor hesitation in the power sector where some electricity boards are trying to renegotiate PPAs signed just a few years ago. If, despite this, the government decides to go ahead and terminate the GE contract, it is critical that it pay all damages and not try to renege on these or negotiate to lower them. Normally, apart from the usual damages clauses that all agreements have, there is the option of going in for arbitration, whether locally or globally. India’s record here, however, is very poor—in the Cairn/Vodafone/Reliance cases, it has tried to delay proceedings several times and, in the DoCoMo case, it even argued against implementing the award even though that was against the Tatas and not the government. At the end of the exercise, India has to convince investors this is a one-off exercise, and that’s not going to be an easy task.