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Bombardier venture awarded Chinese contract
Published on: 2009-09-29
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TORONTO — Train maker Bombardier Inc. said Monday its Chinese joint venture has been awarded a $4 billion contract to build 80 high-speed trains for China's railway ministry.


Bombardier Sifang Transportation Ltd. said it will manufacture the trains in China and that engineering and project management will be done in China and Europe. Bombardier's share of the contract is estimated at $2 billion.


The first train is scheduled for delivery in 2012 and the last one will be completed in 2014. The Zefiro trains will have maximum operating speeds of 380 kilometers (236 milies) per hour and use energy-saving technologies developed by Bombardier.


The contract is a significant deal for Bombardier, which has been hoping to boost its rail business as the Canadian plane and train maker copes with declines in sales of regional jets and corporate jets caused by the global economic recession.


The trains will be made in Qingdao, a sea port and industrial city north of Shanghai in northeastern China. Bombardier Sifang employs more than 3,000 people in China.


Established in 1998, Bombardier Sifang is a joint venture between Bombardier and CSRSifang Locomotive and Rolling Stock Ltd.


"This is a landmark order for next-generation rail equipment and the result of a positive and productive, long-term relationship," Andre Navarri, Bombardier Transportation's president and chief operating officer announced from Berlin.


Montreal-based Bombardier's train division is based in Berlin.


Desjardins analyst Benoit Poirier said in a research note that "further orders from China and other countries might follow in the near future."


"We estimate that Bombardier could bid on at least 3,000 cars in Asia over the next three years (worth about $4.5 billion, assuming $1.5 million per car). Considering Bombardier is a market-share leader in this region, we would expect the company to win a significant amount of this business," Poirier wrote.

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