Bangladesh is going ahead with a plan to manufacture at least 50 per cent of the railway parts in the country to save a chunk of foreign currency and create jobs.
A draft policy prepared with this objective is likely to be finalized this month, sources at state-run Bangladesh Railway told UNB this week.
Apart from saving the railway TK 750 million to 1.5 billion annually the implementation of the plan will greatly reduce its dependence on imported parts.
The sources, who spoke on condition of anonymity, said currently about 25,000 different types of parts are required for locomotives. Of specialised parts, only 5.0 per cent are locally made now. The remaining 95 per cent of the parts are purchased from foreign manufacturers.
An official of Bangladesh Railway told UNB that around 61 per cent of its 283 locomotives have reached the prescribed 20-year lifespan.
Engine parts worth around Tk 1.5-2.0 billion are imported every year to keep those expired engines running. In this context, railway has taken initiative to manufacture various parts in the country.
Since most of the engine parts have to be imported, in most of the cases it is not possible to repair the engine properly due to the non-availability of spare parts within the stipulated time, explained the official.
If these are made in the country, it will save time besides saving foreign currency. This, in turn, will create employments, the official said requesting anonymity.
The draft policy includes entrepreneurs in the production process. Bangladesh Railway's own workshops will be used for manufacturing work.
Once the policy is implemented, the parts will be available easily and cheaply and it will also contribute to the development of the local industry, he said.
Other sources at the Bangladesh Railway said, the proposed policy aims at the production and rapid availability of locomotive parts in the country.
It says that a large number of spare parts are required regularly to repair and maintain the engine in the fleet. These parts are specialized materials. Diesel engine parts are identified on the basis of part number and description as there are no drawings and specifications.
Railways have to spend huge amount of foreign currency to procure these parts. Therefore, in order to reduce the dependency, local manufacturers were allowed and temporarily manufacture parts in the past under the BSIC policy and later as per the instructions issued by the mechanical branch of Bangladesh Railway.
But due to a lack of policies and guidelines for proper supervision and lack of long-term investment protection for entrepreneurs, sustainable entrepreneurs were not interested to invest.
As a result, it was not possible to maintain the expected quality of products.
According to the draft policy, manufacturers having BSIC or equivalent certificates which have own factories, adequate machinery, skilled manpower and financial capability, will be eligible for parts production.
Railways will initially declare it as a single source for five years after completion of an agreement with a qualified entrepreneur or organisation.
The Railway's Document Assessment Committee, Factory Inspection Committee, Quality Management Committee and Pricing Committee will look after these matters.
Additional Director General (Rolling Stock) of Bangladesh Railways Manjur-ul-Alam Chowdhury, said a seminar on the policy with exhibition of spare parts is likely within this month at the central locomotive factory at Parbatipur in Dinajpur with stakeholders on.
"We are hopeful that Prime Minister Sheikh Hasina will formally inaugurate the event someday this month," he said.
The seminar will be attended by experts from BUET and BITAC (Bangladesh Industrial Technical Assistance Center), as well as representatives of various government agencies and investors. The draft policy will be finalised after discussion in the seminar, he added.