Exclusive Interview with Mr. Preetam Ganguly, Director – Sales & Marketing, Faiveley Transport, a Wabtec company

Context: Believing in the strong growth story of India in infrastructure and transport sector, Wabtec has invested continuously and significantly in India towards enhancing their capacities and in building competencies in Engineering, Manufacturing & Supply Chain. Our Team reached out to them for an exclusive insight into their complete operations in India besides other details on their major activities in the Indian market and impact of Covid-19 on their operations.

Mr. Preetam Ganguly has extensive knowledge & rich work experience of over 20 years in various leadership roles in the rail transportation industry. He has a highly diversified academic background in applied sciences & engineering, a flair for marketing & a proven track record in building high performing teams & creating sustainable long lasting customer relationships.

Interview Insights :

Rail Analysis: Please tell us about your journey with Wabtec Corporation? How did you get started in this industry?

Mr. Preetam Ganguly: I started my career in the engineering industry with Asea Brown Boveri Limited way back in 1996. Post that experience, I moved into the transportation sector and have now been associated with the Rail Transport industry for almost two decades.

Prior to joining Faiveley Transport in 2016, now a part of the Wabtec group, I had served in senior leadership roles for Alstom Transport India Limited and for Bombardier Transportation India Limited. The journey continues in Wabtec corporation which is today one of the global leaders in the rolling stock and rail transport equipment domain.

It has been nothing short of a breathtaking experience for me in this industry that has seen unprecedented growth and made every moment memorable. As I look back into my career, I consider myself to be privileged and lucky having got the opportunity to contribute meaningfully for each of these companies that has in turn enabled me to be what I am today.

Rail Analysis: Tell us more about Wabtec‘s presence in India. What are the complete range of products and services which Wabtec is supplying in the Indian market and what are the plans & targets for 2020-21?

Mr. Preetam Ganguly: Wabtec Corporation has been in operation in India for over two decades now.

“We are a company fully dedicated to the rail transport sector in India. Faiveley’s transit business has
witnessed strong growth over the last three years growing at an enviable CAGR of over
40% to cross revenues of 200 M$ in calendar year 2019.”

Believing in the strong growth story of India in infrastructure and Transport, we have invested continuously and significantly in India towards enhancing our capacities and in building competencies in Engineering , Manufacturing & Supply Chain .

In support of the Make in India initiative of the Central Government and the Ministry of Urban Development, we have been able to largely localize our products & processes through transfer of technology or production from our global centers of competencies & by investing in Research & Development , Product engineering and setting up of a strong and mature local supplier base. Our Centers of Excellences essentially in Europe have strongly supported us to bring in the latest global technologies at the most competitive price points for the Indian market.

We have inked several strategic partnerships and completed many global acquisitions to support our growth through product portfolio enhancement and diversification. Two major acquisitions and mergers that have catapulted Wabtec Corporation into one of the largest rolling stock and rail equipment manufacturers globally and in India are Faiveley Transport in November 2016 and GE Transportation in February 2019.

The organization is now coming together and emerging stronger as ‘One Wabtec’ by driving systemic integration of the merged companies across businesses, geographies and functions through the leveraging of significant operational synergies & savings. Globally, we are a 8 Billion USD plus enterprise while in India we are about half a billion USD group and growing rapidly.

In a nutshell, we have our operations primarily driven out of five factory locations across the country –

  1. Hosur in Tamilnadu in South India just across the border from Karnataka catering to Indian Railways & Urban Metro Rolling Stock
  2. Baddi in Himachal Pradesh near Chandigarh in North India fully dedicated to Indian Railways towards manufacturing of equipment for LHB coaches
  3. Kolkata in the East where we have a manufacturing facility which is a joint venture between Wabtec & Texmaco (belonging to the Adventz group). The JV has capability to manufacture Draft gear, Bogie Mounted Brakes system, Friction material like Brake blocks both for Indian Railways and for the export market
  4. MTC in Bangalore, a group company with Spanish parentage manufacturing Metal Bonded Rubber products and last but not the least
  5. Marhowra in Bihar with capacity to build 120+ Diesel Locomotives annually with the latest global technologies. This factory is under a JV in which Indian Railways holds 26% stake.

Over the years, we have invested in 360000 Sqm of manufacturing operations footprint. In addition, we also have over 2000 hardware and software engineers seated in Engineering & Technology Centers of Excellence in Bangalore working on signaling infrastructure, designing locomotives, electronics and digital solutions serving both the Indian and global market requirements for the multiple projects under execution.

“We have a very large installed base of our products in Electric locomotives, EMU/MEMU’s, LHB coaches
and Metro Rail Corporations spread across the country.”

There are two parts to the business primarily – Transit and Freight.

Transit or passenger movement is under the legacy Faiveley Transport umbrella. Within the Transit business, we design, manufacture, assemble, test , supply , install & commission state of the art Brakes system for Electric Locomotives, LHB Coaches, EMU/MEMU’s, Semi High-Speed Train sets, High Speed trains and Metro rolling stock. We also have a very diverse product portfolio comprising of Couplers, Pantographs, Heating Ventilation and Air Conditioning systems and Automatic Doors for Indian Railways mainline and the Metro rolling stock.

“We proudly say that every Indian Metro has something of Wabtec in it.”

In addition, we have a plethora of new product offerings from our global group companies that include Fire Detection & Suppression systems, Passenger Information Systems, Sanitation / Vacuum Evacuation systems and Energy efficient Air Conditioning systems.

We have some very interesting service offerings like Condition Monitoring Systems that help in predicting the life of the components of the railway rolling stock thus optimizing the life cycle costs and improving significantly the efficiency of maintenance of the equipment in service.

Under Freight or goods movement, there are three subsegments:

  1. Freight Components, primarily making Draft Gears, Friction Wedges, Relays, Bogie Mounted Brake systems and Brake Blocks for freight cars or wagons and another group company MTC with Spanish parentage which makes Metal Bonded Rubber products for Primary and Secondary suspension for Bogies in its manufacturing facility in Bangalore
  2. Freight Equipment – part of this business is legacy GE Transportation that manufactures Diesel locomotives. The 1000 Diesel Locomotives project is being executed
    from Marhowra in Bihar on the Public Private Partnership model through a Joint Venture between GE Transport & Indian Railways
  3. Electronics & Digital Solutions for Railway Infrastructure.

We also have a highly robust business with integrated offerings tailored to our installed base of 23,000 plus locomotives in operation around the world. In India, we have a PAN India presence with a large pool of service engineers spread across the entire country that provides warranty and maintenance support to the zonal railways of IR & Metro rail corporations to ensure high levels of reliability and availability of the locos coaches & metro trains at all times. The GE Transportation side of the business has now delivered over 200 locomotives to Indian Railways and has trained over 2000 loco pilots. These locomotives are supporting transport of freight across Northern, North Western and North Eastern parts of India.

Rail Analysis: In your perspective, what has been the impact of the Covid-19 pandemic on the Indian economy and on rail & metro sector? What are the precautionary measures you have undertaken to resume your operations?

Mr. Preetam Ganguly: Well, the COVID-19 pandemic has not spared any country and the impact on the Indian economy at large is negative in the extreme short term. All analysts have unanimously predicted GDP to contract in India in FY 21, the first time in 4 decades or so ! In my opinion, GDP should recover in FY 22 and reach pre COVID levels only in about 2 years post which India can even grow 8 – 9 % sustainably over long periods of time. The worry is COVID cases have not peaked yet in India and commercialization of the vaccine is still some time away.

India has seen one of the most stringent lockdowns compared to any country. Over 130 million daily wage earners are estimated to have lost their jobs, Medium & Small Enterprises are struggling to stay afloat and NBFC’s are not in good financial health to lend. Moratoriums extended by financial institutions has made the banking system vulnerable, nonperforming assets are set to rise manifold. The 20 lakh crore stimulus package of the Central Government is not going to be enough both in terms of providing social security for the poor or for reviving growth by spurring investment.

“For the rail transport sector, it has been a nightmare. IR has declared 18,000 Crore revenue hit out of
Freight and Passenger earning in April & May 2020 due to the lockdown.”

Passenger services stopped and Freight earnings were subdued with only essential commodities being transported by IR across the country. IR Electric loco production units CLW / DLW / DMW and LHB / EMU coach factories ICF / MCF / RCF suffered loss of production and may have lost capacity utilization by over 15 – 20 % on account of lockdown. ICF , largest coach factory of Indian Railways being located in the containment zone in Chennai is still grappling with intermittent shut down and coach production is yet to normalize.

Maintenance budgets of IR is certainly expected to be squeezed while I do not expect Electric loco or LHB coach production to be impacted too much. After all, we still consider Railways as building “essential infrastructure“ and expect the Central Government to support IR with funding that can ensure the suppliers catering to the industry to survive and return to their growth path. Remember, there was a doubling of LHB coach production and Electric Locomotive production by IR factories in a very short span of time between 2017 – 2019 that needed the suppliers invest in huge CAPEX and build capacities to meet the requirements of IR. It is now the turn of IR in these difficult times to help the supplier partners to tide over this phase and not curtail the growth path on which the industry had embarked with a huge leap of trust and faith. Investment in new product development may take a backseat for some time. Semi high speed Train set 18 and 200 km / hour TEJAS coaches on LHB platform are projects that must not stop. The growth story certainly remains intact in the medium term. Things could limp back to normal by Q4 this year or early next year if the pandemic is arrested and freight earnings may start to stabilize. Passenger earnings will take at least 12-15 months to revive since people will undertake only essential travel.

The urban metro segment is also in paralysis mode. While projects already announced like Bangalore, Kanpur / Agra and Mumbai metro will move on, new metro projects backed by investments from external bilateral funding agencies make take a backseat for some time. Projects planned on Public Private Partnership model may also see some delays. The Rolling stock contract for the 82 kms Delhi – Meerut Regional Rapid Transport Systems project was awarded to Bombardier Transport amidst the lockdown which is a very positive sign indicating strong intent from NCRTC and the government to move ahead with investments in rail infrastructure. At Wabtec Corporation, we are doing everything possible to get back to normal. Our factories lost capacity due to country wide lock down from March 23 almost until the middle of May.

“All global norms of social distancing are stringently implemented in all our manufacturing sites,
engineering centers, sales & services offices without any compromise
to the health and safety of our employees.”

We are trying our best to manage our suppliers and supply chain efficiently in these difficult times. All global norms of social distancing are stringently implemented in all our manufacturing sites, engineering centers, sales & services offices without any compromise to the health and safety of our employees. Disinfection / Sanitization norms for all equipment, packing boxes, inbound and outbound material, incoming and outgoing vehicles, canteen facilities & rest rooms are defined and monitored without exceptions. Use of Hand sanitizers , PPE’s / Masks is mandatory. The installation of the Arogya Setu app by all employees has been ensured to support contact tracing. There are clear protocols defined for employees undertaking travel if and only if it is deemed to be unavoidable and strictly after obtaining approval from top management. Work from Home is being encouraged by providing all employees with the necessary IT infrastructure to ensure smooth, on time and efficient delivery of their work.

Rail Analysis: Any steps you would like to recommend for the rail industry to revive from this crisis?

Mr. Preetam Ganguly: Well, there is no crystal ball to tide over this situation. It is an opportunity for industry players to get efficient and more productive than ever before. This situation will eventually make the industry emerge stronger.

“Localization should be very high in priority for the industry players to ensure
cost competitiveness & make India self-reliant as a nation.”

We must build a strong talent pool of people and invest carefully only in those areas where there is a need to upgrade technology. Digitalization could be the next big theme. The larger players in the industry must look at every opportunity to export which should also help in de risking their business model. On an optimistic note, the rail transport industry players must keep faith on the medium to long term growth story of the Indian Railways. The growth in the urban metro segment will also accelerate once the country is able to tide over this unprecedented crisis created by the pandemic.

Rail Analysis: In the post pandemic world, collaboration between Government and private industry will be most vital to recover from the unprecedented crisis. How do you view the PPP projects in the railways & metro sector today? Are you planning to participate in these projects?

Mr. Preetam Ganguly: It is important for the PPP model to succeed in the rail transportation sector in India. The Freight earnings of IR are not adequate to cover for the highly subsidized passenger earnings thus resulting in a poor operating ratio for Indian Railways. Passenger Safety, Speed and Comfort is essential for railways to compete with roadways and airlines. Investments in modernization of railways infrastructure and improving the efficiency of operations of trains is the need of the hour. The reconstitution of the railway board and empowerment to heads of production units indicate that Indian Railways are thinking of a sustainable and profitable business model. It is thus imperative for the government and IR to encourage PPP and also provide sufficient incentives and motivation for the private sector to look at this model positively and invest in projects that can generate an acceptable internal rate of return that is economically viable within a reasonable frame of time.

Station redevelopment in multiple cities is already initiated and is a step in the right direction to create world class railway stations with modern amenities for its passengers while ensuring safety and comfort of passengers. Wi Fi & Real time Passenger Information Systems installations shall make travelers feel savvy & secure.

Privatization of train operations has already happened though not in its full and true spirit with IRCTC taking over operations of the 2 TEJAS express trains and Golden Chariot Express which are premium trains. Identification of routes will play a key role for PPP to succeed in train operations, so will the model of tendering and procurement to select private players to operate the selected trains. It is important that terms and conditions of PPP are not rigid and revenue sharing model is
fair and transparent based on actual ridership on the trains on the identified routes. Private MNC’s like Alstom, Bombardier, CAF, Talgo and others may be interested to even manufacture and operate trains privately for IR if commercial terms and conditions are fair and favorable for the business.

For Wabtec, it would be a business opportunity only if there is a technology differentiator for products like CCTVs or Passenger Information Systems in all stations as a part of station redevelopment or modernization. We are an equipment supplier and a system integrator but not involved directly in development of railway infrastructure or civil works. However, given the fact that we have a very diversified portfolio of products & services in the transit passenger segment, privatization of train operations will create lot of demand and opportunity for our products which we could sell to the car builders who win the business. We have strong business relationships or strategic partnerships with the global car builders and will keenly. watch the market developments so that we can partner with them through the supply of our products and services when the opportunity arises.

Rail Analysis: In the last few years, there has been a special emphasis on infrastructure development projects in railways such as complete electrification and signaling upgradation of the existing rail network . How do you view these projects and does Wabtec have a role to play in these projects?

Mr. Preetam Ganguly: The budget allocation towards railways was largely positive. However, as I said before, utilization is the key.

“We strongly support the Make in India initiative of the Central Government & SMART City initiative of the MOUD
and have critical products like Brakes system, Couplers, HVACs, Pantographs & parts of Automatic Doors
designed & manufactured in our Hosur plant in India. We also make products for certain export
projects that our customers like Alstom deliver from their plant in Sri city in India.”

The COVID-19 pandemic will delay investments in large CAPEX or in infrastructure projects that need large funding. There is high focus towards rapid development of infrastructure. In addition to station redevelopment & privatization of train operations that we spoke about, the pace of electrification is gathering steam. The entire 68,000 kms of rail network is expected to be electrified within next 3 years which may now stretch to 4 years ! This is good news for Wabtec since we have a wide range of products for Electric locomotives like Brakes system, Loco Couplers, Air Dryers, High Reach Pantographs & Cab Air conditioning systems.

The decision to produce TEJAS coaches with 200 km / hour speed is another long term positive since we have products to cater to these coaches. Production of 7000 plus LHB coaches from IR coach factories ICF / MCF / RCF annually provides good visibility for Faiveley Transport since these products that we build for LHB coaches are our core products. Even if there is some slowdown this financial year which is inevitable, this segment should bounce back once the pandemic is out of the way. Funds allocation of nearly 24.87B INR towards the first Delhi – Ghaziabad – Meerut Regional Rapid Transport Systems project being implemented by National Capital Region Transport Corporation NCRTC is a step in the right direction.

There is significant potential for metro projects in the country in the medium to long term which is another big opportunity for us since we have products and local competencies to design and develop products for metro rolling stock. There is strong emphasis on the need for safety, better asset utilization, efficient maintenance and improvement of signaling and telecommunications infrastructure. These are key areas where we as Wabtec can play a major role. There is major focus to get the Western & Eastern Dedicated Freight Corridors operational in a phased manner which is extremely critical to decongest the traffic. You would be happy to know that some of our locomotives built by GE Transportation are already in operation in the region where the connectivity and network would improve & expand year on year.

Rail Analysis: In terms of urban landscape, how do you view the metro landscape in India today and the development of Metrolite projects in Indian Tier 2 and Tier 3 cities?

Mr. Preetam Ganguly: The metro landscape in India is exciting as the Government through Ministry of Urban Development & Ministry of Housing & Urban affairs is trying to meet the needs of a rapidly growing urban population with smart mobility. We have only about 721 kms of metro in operation with around 3000 metro cars since Delhi Metro started its operations way back on 25 December 2002 while another roughly 795 kms are under construction as we speak.

This is miniscule when you compare this with China where 5000 metro cars are procured every year ! The problem here is that the Central & State Governments do not have adequate money and metro projects in India are highly dependent on funding from external bilateral funding agencies like JICA / ADB / EIB / AIIB etc.

The PPP model has not succeeded in the metro sector as anticipated or expected. Even with this backdrop, after the COVID situation eases, We may expect on an average around 700 metro cars for different cities to be procured annually over the medium term. Wabtec is a leading supplier of metro rolling stock equipment to the different metro car builders namely Alstom, Bombardier & BEML who have their local manufacturing facility in India & also to CRRC, Hyundai ROTEM & others who supply trains for India metro projects from their home country.

This side of the market is very competitive since prices of rolling stock in India has been extremely low with Chinese making an aggressive entry into the country and BEML, the local manufacturer & Public sector undertaking competing fiercely with European companies like Alstom & Bombardier. Light rail transit system may be a possible solution for Tier 2 / Tier 3 cities in India where the ridership or peak hour per direction traffic is not as high as in large commercial capitals like Mumbai, Delhi, Chennai, Kolkata, Hyderabad or Bangalore.

Light rail system like METROLITE can also be applied in selected sections in Tier 1 cities as well. In Kolkata, for example, trams have been in use since 1902 and we are familiar with the systems. Bandra – Kurla complex in Mumbai for instance can have a tramway that can be extremely helpful for commuters. Having said this, I do not think that the cost of implementation of Light rail system or METROLITE can be of the magnitude of 130 Crore per km as the policy makers or stakeholders are expecting – it should be more towards 180 Crore per km in best case. We need to watch how this emerging platform develops and whether it can take off in India.

Rail Analysis: With the renewed focus on “Atmanirbhar Bharat”, how can this become more effective for the rail sector? Any recommendations?

Mr. Preetam Ganguly: We need to become self – reliant as a nation meaning import less and export more. Make in India has been demonstrated by Wabtec in several ways – we have our factories in India making diesel locomotives , equipment for railways and metro rolling stock with very high local content. We also have our Engineering & Technology Center in Bengaluru that supports design & innovation for local and global projects.

“We also have our Engineering & Technology Center in Bengaluru that supports
design & innovation for local and global projects.”

In order to be more effective , the Make in India initiative must be backed up by tax incentives or even a 10 year tax holiday from the government to promote setting up of green fields in India that could lead to significant employment generation as well which is a dire need today.

“We have also invested in development of high technology engineering centers of excellence in India with
a great pool of talented engineers from leading universities, institutions and industry.”

The model of procurement must be closely looked at – Make in India must be mandatorily implemented in public tenders and not in a selective manner. Price preference must be given to proven suppliers with local manufacturing capabilities. Some of these are already happening but in a rather fragmented way. Wabtec has built R&D capabilities in India which are supporting development of local and global products with the latest technologies.

We have localized and customized several products to cater to the Indian environment along with RDSO. However, I would love to see more volumes, standardization of technical specifications & swiftness in decision making by IR to justify the cost of development of these new products internally for which IR unfortunately does not pay. A primary example is Semi High Speed Train set 18 which was developed by ICF with support from local suppliers / OEM’s who incurred significant non -recurring costs, but then it hit a road block halting production for over a year now though hopefully, it is now set for a comeback. Guidelines from Railway Board / RDSO on new product introduction or for bringing in alternate global technologies must be revisited for Make in India to be viable, serious and effective.

Rail Analysis: Congratulations for receiving multiple Prestigious Honors at the Rail Analysis Innovation & Excellence Summit 2020. Please share your experience at the summit. How will this event contribute to the growing Indian rail industry?

Mr. Preetam Ganguly: Thanks to the jury of Rail Analysis for the recognition. This is the second such summit organized by Rail Analysis in which we have participated rather actively. Congratulations to the Rail Analysis team for this initiative. I think it is a good platform to get all segments of the industry players together and recognize them for the great work they have done in the preceding year. It also provides an opportunity to emerging players in the sector to showcase their technologies and get recognized. In addition, it is a good networking opportunity between the government and the private sector to brainstorm on several critical topics that have a consequence to their businesses.

Rail Analysis has been engaging actively with the Indian Railways and the private players in the rail transport industry and helping in its own way to bring ideas and solutions to the table through a common forum like this. The topics for the summit were chosen well and we saw sizable industry participation in this event. However, the quality of the technical paper presentations can be better and more detailed in future.

The event must continue and grow even larger in the years to come which should spur the growth of several emerging companies and help in introduction of new and alternate global technologies in this rapidly growing rail transport market in India.

Rail Analysis: Anything you would like to share with our readers?

Mr. Preetam Ganguly: The key message is that the Rail Transport Industry in India is on the path of sustainable growth. Companies and individuals connected to the sector must continue to believe and invest in this long term growth story. It is also of paramount importance to continuously bring down costs in order to remain relevant and competitive in this fiercely dynamic market. The climate is right for trains !

This Interview is a part of our June 2020 MagazineSubscribe to our Magazine Today!