Unconfirmed reports of Bombardier and Alstom in merger talks

Neither Bombardier nor Alstom have confirmed reports published by Bloomberg, that the two rail companies are discussing a potential merger.

An unnamed source told Bloomberg that the French rollingstock manufacturer and Canadian train maker have been in talks over the past few months.

A spokesperson for Bombardier told Rail Express said the company does not comment on market gossip.

A spokesperson for Alstom also noted that the company does not comment on market speculation.

The reports published in Bloomberg had an immediate impact on the share prices of both companies, with Alstom shares rising by 2 per cent in Paris, and Bombardier shares ending 5.7 per cent higher in Toronto.

In Australia, both companies have a major presence, with Alstom recently announced as the manufacturer of the rollingstock for Perth’s Metronet project. With a 50 per cent local content requirement, the company has committed to building the trains at a manufacturing facility in Bellevue. Alstom’s light rail vehicles are running on the recently opened Sydney light rail line.

Bombardier’s Australian presence is spread across all states except Tasmania, and the company has manufacturing facilities in Victoria and WA.

Bombardier, which also manufactures aircraft, had previously been in talks with German rail manufacturer Siemens about merging, however the Munich-based rail manufacturer then swapped to negotiate with Alstom. The EU subsequently blocked this merger based on antitrust laws.

On Monday, January 20, Bombardier announced that it would provide maintenance for 656 high-speed train cars in China, on top of a joint-venture contract to build 160 new high-speed cars in China.

WA businesses receive capability funding

West Australian businesses have received funding to prepare to locally deliver rollingstock for the state’s Metronet project.

Eight businesses have won funding as part of the Local Capability Fund (LCF) under the Metronet Railcar Procurement round.

Businesses which have received up to $20,000 include refurbishment services provider Frontline Rail, the WA branch of rail transport maintenance and engineering business Chess Engineering, as well as specialist engineering and service providers.

The funding can be used by the businesses for capacity-building, planning, improvements to internal infrastructure, equipment, training, and certifications.

Applications for the fund remain open until January 31, or until funds are exhausted.

Under the contract to deliver new rollingstock for the Metronet project, rail car manufacturer Alstom will utilise local businesses for 50 per cent of the contract.

When complete, Alstom will produce 246 new C-series railcars and six diesel railcars. The railcars will be built in WA at the new Bellevue Assembly Facility.

Alstom finalises $1.3 billion contract for WA’s biggest railcar order

Alstom will build 246 Metronet railcars as well as a manufacturing and assembly plant in Bellevue, Western Australia, after the project contract was finalised this week.

According to the state government, the railcar manufacturing order “has come in $347 million under the original budget of $1.6 billion”. Under the 10-year contract at least 50 per cent of the railcars will be built locally.

As part of the project, Alstom will establish a base in WA at the 12,000 square metre plant near the old Midland Railway Workshops where railcar maintenance will also be carried out for the next 30 years.

“Work will start on building the new production plant in Bellevue and completed in 2021 next year, on top of six other Metronet projects that will be under construction in 2020 alone,” WA premier Mark McGowan said.

Since the closure of the Midland Railway Workshops in 1994, WA’s trains have been predominately built in Queensland with only two per cent of the work completed in WA. The local work will create 200 jobs as well as a number of indirect jobs, according to the WA government.

“Not only were local jobs lost, it was also more expensive to outsource railcar supply. The cost per railcar under the last order of B-Series trains was $4.05 million, while the cost under the new C-Series contract is around $2.97 million,” a government spokesperson has said.

Local companies have already been awarded contracts for fitting out the Bellevue railcar plant, including a $3.8 million contract awarded to Vector Lifting for the delivery of lifting jacks, a bogie press and bogie turntables has. An $850,000 contract for the supply of four cranes was recently awarded to Bassendean manufacturer Eilbeck.

“We’ve secured a quality deal for the state, by bundling multiple railcar orders into one super-contract, we have encouraged the market to make very competitive bids for the work,” minister for transport Rita Saffioti said.

“Importantly, this project will also deliver two three-car sets to replace The Australind and provide South-West residents with the reliable rail service they deserve.”

The contract includes 246 railcars, arranged in 41 six-car EMU sets, for additional Metronet capacity and to replace the ageing A-Series. It also includes six railcars to replace the existing Australind service, which will be delivered as two three-car DMU sets.

The first C-series trains produced at the Bellevue plant will be ready to use on the network in 2022 and will have an operational life of 35 years.  The new Australind railcars are expected to be ready in 2022-23.

Alstom Australia & New Zealand managing director Mark Coxon said the contract structure would allow the state to manage Perth’s projected future growth while re-establishing its rail manufacturing industry.

“We are delighted to have been awarded this contract and look forward to partnering with the state of Western Australia to deliver this significant project,” Coxon said.

Better technology including LED lighting, USB charging points and regenerative braking will also be installed to make the new trains more efficient. Once operational, Alstom’s HealthHub predictive maintenance tools will be used to optimise performance and reliability.

“The project will see the transfer of the latest railway technologies and manufacturing processes to Western Australia, establishing the most technologically advanced train manufacturing and maintenance sites in Australia,” an Alstom spokesperson said.

The company is also set to partner with local TAFE and training organisations to create new fast-tracked training and skills development programmes.