HC Deb 20 June 1927 vol 207 cc1500-3W

asked the Under-Secretary of State for India whether he is aware that the Government of India invited manufacturers of locomotives and railway wagons by their communiqués of 1918 and 1921 to establish factories in India; whether he can give the terms of those communiqués showing what assurances were given to manufacturers; how many factories were established in response to the Government's communiqués; how many of these factories are now working; and whether he can state how much capital has been lost by Indians and Englishmen through the failure of the Government of India to carry out the assurances given to them?


Copies of the communiqués referred to by the hon. Member, together with one modifying that of 1st March, 1918, are given below.

Two companies were formed in response to these communiqués, one for the manufacture of locomotives and the other for the manufacture of wagons. The former on finding that the demand for locomotives would not justify it undertaking their construction, adapted its works for the manufacture of wagons. When it became necessary for the Government of India last year to reduce the orders for wagons, they offered to purchase the works of these two companies. Only one company accepted this offer, the other, I understand, preferring to continue its operations. I am unable to state the amount of capital lost.

Following are the copies of the communiqués:

Government of India Railway Department (Railway Board).

Communiqué, dated 1st March, 1918. The Government of India have recently had under consideration methods of making India more independent of outside sources in the supply of railway materials. One case in particular which they have recently examined in consultation with the Indian Engineering Association and Railway Administrations, is the construction of railway wagons in India; and, as the result of inquiries they have made, they are now able to announce that they will guarantee to purchase in India 2,500 broad gauge and 500 metre or narrow gauge wagons annually for 10 years, provided that the price is not higher than the price at which wagons can be imported and subject to conditions which will ensure that the materials and the workmanship are satisfactory. Tenders will be called for as soon as financial considerations admit and the necessary materials are obtainable. It will be understood that the number of wagons stated does not represent the probable requirements of Indian railways. What the Government are anxious to do is to establish on a solid basis in India the industry of wagon construction, and at the same time the manufacture, of materials for this industry by means of a steady stream of orders for wagons. While at the present time they could not with safety go further, they believe that the guarantee now given will be sufficient for the purpose they have in view. The aggregate requirements of Indian railways will certainly be more than 3,000 wagons a year; and once the Indian production of wagons is established on a satisfactory basis there is every reason to hope that an increasing proportion of orders will be placed in India. Communiqué, dated 1st October, 1921: Construction of Locomotive Engines in India. In pursuance of their expressed policy of making India as far as possible independent of outside sources in the supply of materials for railways, the Government of India have had under consideration the question of the construction of locomotive engines in India, and they are now in a position to give a general undertaking that tenders will be invited annually in India for all the railway locomotive engines and locomotive boilers required by Government during the 12 years commencing with 1923. It is estimated that the average annual requirements of Government will be 160 locomotive engines and 160 additional boilers during 1923 and 1924, and thereafter 400 locomotives and 400 additional boilers. The first tenders will be invited on 1st October, 1922. The following general conditions will be observed:

  1. (a)The invitation to tender will be published simultaneously in India and England, and will remain open for at least three months.
  2. (b) The qualities of the articles offered must satisfy in every respect the specifications laid down.
  3. (c) The prices in the case of tenders made in India must compare not unfavourably with the imported article.
  4. (d) Tenderers in India must satisfy Government in the earlier years that an appreciable part of the manufacturing will be done in India.
This condition may be expected to become gradually more stringent, until eventually tenderers, in order to be successful, will be required to show that they can carry out in their works in India all processes usually carried out in locomotive works in England. (e) Government will reserve the right to insist that the proposed sources of supply of parts which cannot he manufactured in India, should be stated in the tender, and should be subject to their approval. (f) Government will reserve the right of inspection at any stage of the process of manufacture, both in India and elsewhere. (g) Firms receiving orders in India will be expected to provide facilities in their works for the traning of Indian technical students, and where such firms have their main works outside India, or are subsidiary companies promoted by or closely connected with firms which have their main works outside India, they will be expected to provide thereat similar facilities for students recommended by the High Commissioner for India in London. Firms interested in the above announcement are invited to apply for further information, either to the Secretary, Railway Department, India, or to the High Commissioner for India, London.

Communiqué, dated 27th June, 1924.

In their Railway Department (Railway Board's) communiqué of the 1st March, 1918, the Government of India announced that it was their policy to purchase both broad and metre gauge railway wagons in India provided the price was not higher than the price at which wagons could be imported, and that the workmanship was satisfactory.

The position has now been materially changed by the enactment of the Steel Industry (Protection) Act, 1924, Section 4 of which provides for the payment of bounties on railway wagons; and the communiqué of the 1st March, 1918, is therefore withdrawn. The Government of India are not in a position to forecast the exact number of railway wagons of different types that they are now likely to require annually in future, but they have every reason to expect that it will be amply sufficient to enable them to give effect to the policy to which Section 4 of the above Act gives expression.