National Post (National Edition)
Bombardier inks US$724M train deal
Bombardier Inc. has signed a US$724-million contract to supply 333 of its electric Aventra vehicles for a United Kingdom rail franchise as the Montreal-based company’s train division braces for steeper competition due to a massive merger between its European rivals.
Bombardier Transportation announced Tuesday it signed a contract with Corelink Rail Infrastructure and West Midland Trains to supply the new vehicles, as well as maintenance and support services through to April 2026, with an option to extend.
Will Tanner, a spokesperson for Bombardier Transportation (BT) in the U.K., said the division remains strong in the European market, and that the proposed merger between Germany’s Siemens AG and France’s Alstom is not a concern for the company’s most profitable division.
“BT remains the best global customer relationships and product portfolio,” Tanner said in a statement. “While it’s obviously an important development, the proposed transaction between Siemens and Alstom has yet to be notified to the regulatory authorities, and will delay either company’s ability to respond to BT’s transformation program.”
Siemens announced in September it planned on merging rail operations with Alstom in order to compete with Chinese rail giant CRCC Corp., leaving Bombardier out in the cold after months of negotiations. Last month, Bombardier CEO Alain Bellemare told a conference that the company was evaluating its strategic options.
“This is a chess game,” he said. “Short term — one year, two years, three years — I don’t see any change, to be honest with you. Even these big mergers, assuming they get the green light from an antitrust standpoint, will take a long time before they get together in a successful way. I think that will also create opportunities for us.”
Tanner called BT’s Aventra platform “a real success story,” pointing to the more than 2,500 vehicles on order in the U.K. for the Elizabeth Line, London Overground, and Southwestern, Greater Anglia and West Midlands franchises. In June, the company landed its largest Aventra deal to date for 750 trains with First Group and MTR in the U.K., a contract worth an estimated US$1.1 billion.
Bombardier will produce the 333 carriages at its U.K. facility in Derby, which is already expected to add an additional 300 employees in 2018 to meet existing demand. The new vehicles are expected to be delivered between 2020 and 2022.
Chris Grayling, the U.K. Secretary of State of Transport, said in a statement the investment is part of “the biggest rail modernization program for over a century.
“West Midlands passengers will see longer, more frequent trains, faster journeys and a more reliable service for passengers,” Grayling said.