After a consortium of their companies secured a Rs 30,000- crore contract to build 120 Vande Bharat trains and maintain them for 35 years, India and Russia settled their dispute over shareholding in a joint venture company. RVNL, a Navratna corporation under the Indian Ministry of Railways, had been attempting to renegotiate its initial shareholding with its Russian partner Metrowagonmash after the two businesses won the Indian Railway contract together.
RVNL and Metrowagonmash had agreed to jointly bid for the Vande Bharat tender and form a Special Purpose Vehicle (SPV) to carry out the project. The Russian corporation would hold a controlling interest under the agreement.
However, after winning the competition, RVNL wrote to Metrowagonmash on April 25, 2023, demanding that the shareholding be changed to give it a 69% stake, with the Russian firm receiving 26% and a smaller partner, Locomotive Electronic System (LES), receiving 5%.
The Russians refused to accept, insisting that both parties respect and adhere to the original deal. According to sources, the situation has now been settled “at the highest level” of the two governments, and the two corporations will proceed in accordance with the original agreement.
This newspaper was the first to report that the two sides were fighting over shareholding after securing the contract. According to the initial agreement between the two firms, RVNL has formed a private company, Kinet Railway Solutions Ltd, to serve as the SPV that will sign the manufacturing-cumulative-maintenance deal with the Ministry of Railways. In this SPV, Metrowagonmash will control 70%, RVNL 25%, and LES 5%. The Russian company will now transmit payments for the share transfer.
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