NEW DELHI: US conglomerate General Electric has cautioned the government that it will incur “substantial costs”, deter future foreign investors and hurt the ‘Make in India’ mission if the Indian Railways alters its $2.5-billion deal to buy diesel locomotives from the company. GE has already shipped its first diesel locomotive to India, which will arrive on October 10, as part of a contract to develop and deliver 1,000 diesel-electric locomotives, but the company’s global leadership is upset over reports that India’s plan to accelerate its shift to 100 per cent electric locos could derail the accord.“If Ministry of Railways moves forward with changes to the joint venture between Indian Railways and GE, they will undermine one of the most promising infrastructure projects in the country and put future foreign investment at risk,” GE said in an emailed statement. The consequences would be significant, it said.“An alteration of this contract will have serious impact on job creation and skills development and cause the government to incur substantial costs. This will also undermine government’s signature ‘Make in India’ initiative. We expect the partnership to move forward and the company continues to fully execute towards the plan,” it said.Government officials said the railways would save Rs 1 lakh crore of fuel and maintenance bills over a decade by phasing out diesel locomotives.Government officials said the demand for electric locomotives would be substantial while manufacturing capability is limited to 200 a year by the railways, apart from Alstom’s Madhepura plant, which will be able to supply 800 in a decade.While railway minister Piyush Goyal has declined to comment on media reports, sources said the railways have told GE that even if it doesn’t have the capability to manufacture electric locos, it can get the technology or do it in a joint venture with another company to meet demand.The railways has also offered GE the option of setting up a locomotive maintenance shed. GE, however, is going ahead with its plans to make its locomotives in India.“We are on track and actively fulfilling our contract with Indian Railways to develop and supply 1,000 fuel-efficient diesel-electric Evolution Series locomotives, bringing modern rail infrastructure and new high-skills jobs to the country,” it said.GE said the construction of its factory in Bihar and maintenance shed in Uttar Pradesh are well underway and expected to be completed on time.“The project creates a robust supply chain ecosystem in India, constituting 60 new local suppliers and 10 global suppliers to achieve over 70 per cent localisation. Roughly 1,000 roles have been hired in the factory and maintenance shed and 5,000 jobs created and sustained in the supplier network,” it said.Experts said 100 per cent electrification is something no country has achieved or even targeted, because diesel engines typically provide better traction for goods trains while electric locomotives are more suitable for high-speed passenger trains.Globally, diesel locomotives account for 55 per cent of engines, but for more than 90 per cent in North America and Australia. They account for 33 per cent in Europe and 43 per cent in China.Indian officials said even after the country shifts completely to electric locomotives, the existing fleet of diesel engines would be adequate as back-up.The Railway Board has estimated that only 1,500 diesel locomotives will be required after 100 per cent electrification, that too only as a back-up.