Bombardier Gains $1.6 Billion Crossrail Deal After Siemens Exits

Bombardier Inc. (BBD/B) won a 1 billion-pound ($1.63 billion) contract for London’s Crossrail project, securing work at Britain’s last railcar factory after Siemens AG (SIE) withdrew from the bidding.

Bombardier will build 65 trains at its Derby plant, the U.K. Department for Transport and Transport for London said in a joint statement today. Trains are due from May 2017 ahead of Crossrail service starting in December 2018, they said.

The future of Montreal-based Bombardier’s U.K. production came under threat when Munich-based Siemens won a 1.6 billion-pound deal to build 1,200 carriages for Thameslink. The German company withdrew from the Crossrail bid because of high levels of workload.

“This announcement will mean state of the art trains providing quick, comfortable journeys for the millions of people Crossrail will serve,” U.K. Transport Secretary Patrick McLoughlin said in the statement, adding the deal would support the creation of 760 new jobs.

Bombardier will also build a depot at Old Oak Common as part of today’s contract.

Crossrail, an east-west link through the city, will add 10 percent capacity with up to 24 trains per hour, said DFT and TfL, which runs the London transport system. Bombardier has committed to placing 25 percent of the value of the work with small and medium-sized businesses, they said.

Britain has manufactured trains since it pioneered rail travel 200 years ago. Bombardier’s Derby site was one of several that made up state-owned British Rail Engineering Ltd. until that business was privatized, passing into the ownership of ABB Ltd., Daimler AG -- as Adtranz -- and then the Canadian company.

The other bidders for the 60 train, 600-carriage contract were Tokyo-based Hitachi Ltd. and Construcciones y Auxiliar de Ferrocarriles SA of Spain.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

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

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