Indian Railways has offered General Electric an option to manufacture electric locomotives at its upcoming factory in Marhowrah in Bihar instead of diesel engines since it no longer envisages requirement for diesel engines.

The government on Thursday told GE at a meeting of railways minister Piyush Goyal with the top brass of the American conglomerate that the railways will not require diesel locomotives in the future since it is switching fully to electric traction.

However, the government doesn’t want GE to lose any investment and so it has offered several options to the company, a senior railways ministry official said. These include manufacturing electric engines, locomotive maintenance shed or any other related facility, with the railways offering an assured contract, he said. “We don’t want to hamper the investment environment in the country. We have offered GE various options. They will work with our officials to find out the right solution. Even if they want to manufacture electric locos with some other company in a joint venture, they will be welcome to do so,” the official said.

In 2015, the railways had awarded the contract to GE to set up the factory on railways’ land. The railways would have procured 1,000 engines worth Rs 14,600 crore in 10 years from the company. The railways was offering 200 acres land as its equity in the project, which was touted as the biggest foreign direct investment in India’s rail sector.

Railways stands to save at least Rs 50,000 crore in fuel bill in the next 10 years if it runs only electric trains on its entire network, along with cutting its carbon footprint. The railways has already signed an agreement with Alstom to manufacture electric locomotives in Madhepura in Bihar. “We will procure from Alstom as per our commitment. Since we will have a 100 per cent electrified network in a few years, the demand for electric locos will also go up. Those additional engines can be procured from GE. They won’t lose any money,” the official said.