PNB Bank may provide Rs.500 crore Loan to Kinet Rail Solutions for Vande Bharat Sleeper Train Project
Kinet Rail Solutions, an Indo-Russian joint venture responsible for manufacturing Vande Bharat sleeper trainsets, has approached Punjab National Bank (PNB) for a working capital loan of ₹450–500 crore. The funding will support the initial phase of production at its Latur facility in Maharashtra, which is set to begin next year.
Russia’s Sberbank to Provide Financial Guarantee
The loan will be backed by Sberbank Rossii, a majority state-owned Russian financial institution, which has stepped in as the sovereign guarantor and financier for the project. Discussions with PNB began earlier this year to secure financial support until funding from the Railways or Rail Vikas Nigam Ltd (RVNL) is approved.
Kinet’s Role in the Vande Bharat Project
Kinet Rail Solutions is a joint venture between:
- Rail Vikas Nigam Ltd (RVNL) – 25% stake
- Metrowagonmash (Russia) – 70% stake
- Locomotive Electronic Systems (Russia) – 5% stake
The company is responsible for manufacturing 120 semi-high-speed Vande Bharat sleeper trainsets, each with 16 coaches, under a manufacturing and maintenance contract awarded in September 2023.
Challenges in Securing Funding
Kinet had initially sought ₹600 crore in funding from Russian banks after proposed changes in train configuration required additional investments at the Latur plant for setting up new sheds and garages. However, with the Indian Railways deciding to stick to the original contract terms, Sberbank has stepped in to back the PNB loan request.
“There is an ongoing financing arrangement, and we are informed that the mock-ups (prototypes) are ready,” a senior Railways official said.
Project Delays and Changes in Configuration
The Vande Bharat sleeper train project faced delays due to discussions over train configurations. Initially, the contract was for 120 trainsets with 16 coaches each, but Railways later proposed reducing the number of trainsets to 80 while increasing the coach count to 24.
This change required a complete redesign, additional investment, and modifications to coach composition, luggage space, pantry areas, and toilets. Russian partners raised concerns about feasibility and possible delays.
After prolonged discussions, the Railways reverted to the original 16-coach design on February 13, 2025, avoiding additional capital expenditure at the Latur manufacturing facility.
Production and Testing Timeline
Production is expected to commence once the mock-up receives necessary clearances. Kinet has already issued contracts worth ₹450 crore to CG Power for installing engines, power systems, and electrical components. Tenders for the interior design of trainsets are expected soon.
The first prototype is likely to be ready by June 2026, followed by testing and trial runs before mass production begins.
Despite initial setbacks, the project is now back on track, with financial and operational support ensuring that India’s first-ever sleeper version of the Vande Bharat Express moves forward as planned.
