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A detailed survey by Railway Board in 1977 revealed that :
In workshops, 77% of the M&P was overaged and In PUs, 53%
And widening gap between requirement and availability of maintenance facilities. In 1978 IR negotiated IDA Credit for 10 year workshop modernisation plan :
With total investment of Rs.,400 crores- At 1977 prices In phases

For carrying out this unprecedented and specialised procurement COFMOW as a specialist organisation was set up in 1979.

The World Bank credits were fully utilised by 1990 after which COFMOW became the designated organisation of the Indian Railways for all major procurement of machinery and plant under various plan heads ( 4100 and 4200) and for Industrial Engineering Studies.

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