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India's $5.6 Billion GE, Alstom Deals Step Up Rail Overhaul

  • Both companies plan to build locomotive factories in India
  • Prime Minister Narendra Modi seeking to modernize rail network
Indian commuters prepare to catch a train during rush hour at a suburban railway station in Mumbai on February 25, 2011. The Indian Railway Budget for year 2011-12 is scheduled to be announced by Railways Minister Mamata Banerjee on February 25. AFP PHOTO/Punit PARANJPE (Photo credit should read PUNIT PARANJPE/AFP/Getty Images)
Photographer: Punit Paranjpe/AFP/Getty Images
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General Electric Co. and Alstom SA won contracts worth $5.6 billion to build locomotives for India’s congested state-owned railway, as Prime Minister Narendra Modi strives to modernize Asia’s oldest network.

GE won a $2.6 billion deal for diesel engines and will invest $200 million to build a factory under a joint venture with Indian Railways. The goal is to produce 1,000 locomotives over 11 years. Alstom will make electric engines in a contract worth about $3 billion. The steps are among Modi’s biggest toward reversing chronic network under-investment and spurring manufacturing.