Bombardier Wins $4 Billion Train Order In China
Robert JonesBombardier Inc., the maker of CSeries jets and trains, said its Chinese partner venture had a winning bid valued at $4.01 billion or 27.4 billion Chinese renminbi for 80 high-speed trains.
Bombardier’s slice of the work is estimated at 13.5 billion renminbi, the Canadian-based company said today via a statement. Bombardier’s joint venture, Bombardier Sifang Transportation Ltd., will construct the high-speed trains in Qingdao, China.
The Asian country is developing an excess of 6,000 kilometers (3,700 miles) of new high-speed rail lines. The trains purchased by China boast a top speed of 380 kilometers per hour The Bombardier’s Zefiro train order consists of a total of 1,120 cars. The first batch is scheduled for delivery in 2012 with the last deliveries going out in 2014.
Cameron Doerksen, an analyst based in Montreal with Versant Partners said the agreement is an important step for Canadian company as it increases its share of the high-speed rail sector.
According to Doerksen, the contract is estimated to represent nearly 20% of Bombardier’s transportation unit’s yearly revenue.
Bombardier won the order from China’s Ministry of Railways. The joint venture, started 11 years ago, has now provided more than 1,000 passenger rail cars to the Chinese market.
Nicholas Heymann, an analyst with Sterne Agee & Leach in New York, said in an interview that China’s plans to grow its high-speed rail system offers more opportunities for the company. Bombardier has won contracts from China representing about 1,700 high-speed cars and is hopeful to win orders for as many as 3,000 cars.
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