State body picks Chinese major over Bombardier, Hyundai Rotem

Train and rail equipment manufacturer China Railway Rolling Stock Corp is on a roll when it comes to securing railcar contracts in the United States.

In Philadelphia, the board of the Southeastern Pennsylvania Transit Authority on Thursday approved the purchase of 45 multilevel coaches from the Chinese train giant's subsidiary, CRRC MA, for its regional rail network.

The contract award was based on technical ratings and pricing, said the authority, with CRRC's proposal offering the best value. The multilevel coaches will meet "Buy America" requirements, with 60 percent or more of the parts, labor and fabrication done in the US.

"This contract award allows SEPTA to advance a major service-improvement initiative at a cost that fits within our budget constraints," Chairman Pasquale T. Deon Senior said in a statement.

"We look forward to seeing the new multilevel coaches in service for our customers."

General Manager Jeffrey Knueppel said the regional rail's passenger levels had grown by more than 50 percent over the last 15 years.

"The addition of new multilevel coaches and electric locomotives are critical for expanding capacity and meeting the needs of our riders," he said.

He added that the fleet upgrades would play a key role in advancing the authority's regional rail service improvement program.

CRRC MA came in with a low bid of $137.5 million, easily besting competitors Bombardier of Canada, which bid $171.5 million and the $187.8 million bid by Hyundai Rotem of South Korea.

CRRC MA's deal includes an option for 10 more cars, which, if exercised, would result in the contract's value rising to $161 million, still below the base bids by Bombardier and Hyundai Rotem.

The first of the coaches are expected to be delivered in late 2019. They will be paired with SEPTA's new electric locomotives, which are being built by Siemens of Germany.

The multilevel coaches will be produced primarily at CRRC MA's main US manufacturing facility in Springfield, Massachusetts.

It is the latest win for CRRC. Last week, CRRC Sifang America broke ground in Chicago for a $100 million plant that will build railcars for the city's transit authority.

In 2015, construction began on the $95 million plant in Massachusetts to build rail cars for Boston's transit authority. That plant is scheduled for completion this year and the first cars are expected to be delivered to Boston in 2018.

CRRC was formed in 2015 by the merger of China's top two high-speed rail makers China North Railway and China South Railway.

CRRC has also expanded moves into rail equipment and maintenance businesses in Australia, South Africa, India, Turkey and Europe through building research centers, factories and joint ventures.

Eager to compete with its European and Japanese rivals in this field, China will further develop smart trains which use advanced digitalization and automation technologies that enable automatic speed controls and fault detection, said Feng Hao, a rail transportation researcher at the National Development and Reform Commission.

Paul Welitzkin in New York contributed to this story.