Alstom, Chinese Partners May Jointly Bid on U.S. Rail Contracts

Alstom SA may bid with Chinese partners for high-speed rail contracts in the U.S., Brazil and Argentina under an agreement to boost cooperation, according to Patrick Kron, chief executive officer of the French trainmaker.

“We have a two-prong approach, both to cooperate on the Chinese market where there are massive needs, and on export markets,” Kron said today in a telephone interview from Beijing. Joint bids in the Americas are “among the things we will study,” he said.

Alstom signed a long-term cooperation agreement with China’s Railway Ministry to develop infrastructure in the country and elsewhere, the Levallois-Perret, France-based company said today in a statement. Alstom and Chinese companies “will accelerate new areas of the cooperation on a wide spectrum,” including intercity rolling stock, high-speed trains, locomotives and signaling, it said.

The French manufacturer, the world’s second-largest trainmaker by revenue, is trying to grow in China, the world’s biggest market for rail infrastructure, as budget constraints may hurt sales in Europe. Orders at its transport unit fell 16 percent in the six months through September from a year earlier.

Alstom and Chinese companies including China CNR Corp. will discuss partnerships and investments, and see which markets they can target together, Kron said. The talks could translate into “tangible projects” within three months, he said.

Design, Efficiency

“We could co-design” high-speed trains and other equipment “to provide more efficient offers,” the Alstom CEO said. “This framework agreement is the opportunity to create a real step-change in our business in China.”

Alstom, which is also the world’s third-largest maker of power equipment and power-transmission gear, rose 4.5 percent to 34.09 euros in Paris trading today. That pared the stock’s drop this year to 31 percent, valuing the manufacturer at 10 billion euros ($13.3 billion).

The French company’s expansion outside its home country includes teaming up with Russian railway-equipment maker Transmashholding to tap markets in the former Soviet Union.

Both Alstom, whose products include France’s high-speed TGV train models, and the Chinese ministry have separately expressed interest in the past three years in a railway project to link Los Angeles and San Francisco.

Alstom has held off from some Chinese orders because it has refused to transfer bullet-train technology to Chinese manufacturers. Contracts won by competitors include a $4 billion order for 80 high-speed trains awarded in September 2009 to Montreal-based Bombardier Inc. and a 750 million-euro, 100-train purchase from Siemens AG.

Alstom is the second-largest maker of rolling stock by sales after Munich-based Siemens, according to Bloomberg data.

To contact the reporter on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.

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