Bombardier named top choice for $4.5B rail project

Bombardier Transportation is on track to win its biggest rail contract in at least five years after being named the preferred bidder for a multi-billion dollar monorail project in Egypt, a strategically important area for the beleaguered Canadian manufacturer.

The Montreal-based plane and train maker announced Tuesday that it is the top choice to build two rail lines, one in Cairo and one in Giza, in partnership with Egyptian firms Orascom Construction and the Arab Contractors. It beat out rivals from China and Malaysia.

It said the project is worth three-billion euros (C$4.5 billion), split between the design and build contract and a potential 15-year deal for operations and maintenance.

It’s unclear how long it will take to negotiate the final contract, but if signed it will mark the largest of Bombardier’s significant rail orders in at least five years. According to its annual reports, 2014 was the last year Bombardier reported a rail order valued at more than US$1 billion.

“Any contract this size and this significance is always good news,” said Will Tanner, Bombardier’s director of communications for the United Kingdom and the Middle East.

“It once again shows that we have a world-class portfolio, able to compete and win against Asian competition in key markets in the Middle East.”

The Middle East is a growing market for Bombardier thanks to an increase in public transportation and infrastructure projects.

The potential contract comes at a challenging time for Bombardier’s rail division.

Unexpected challenges from complex projects prompted it to slash its 2019 earnings and revenue forecast earlier in May.

When it released its quarterly results a week later, the company put on hold loose targets for 2020 given the problems in the rail division and reorganized its aviation division.

Despite the problems getting its existing rail projects running on time, Bombardier is confident there won’t be a further slowdown if it wins this big order. “Absolutely not,” Tanner said. “This is a good opportunity, one that shouldn’t detract in any way from our existing work.”

Bombardier shares were unchanged Tuesday. Its stock has taken a beating over the past year.