December 28, 2011 / 11:18 AM / 6 years ago

Bombardier wins $296 million British trains deal

3 Min Read

LONDON (Reuters) - Bombardier (BBDb.TO), Britain's last remaining train builder, has been awarded a 189-million-pound ($296 million) contract to supply 130 carriages to UK rail operator Southern.

The deal should help ease the pain caused by Britain's decision earlier this year to award a key rail contract to Germany's Siemens AG (SIEGn.DE), leading incumbent Bombardier to cut hundreds of jobs at its plant in Derby, central England.

Shares in Canadian-owned Bombardier rose as much as 2 percent on a generally weaker Toronto Stock Exchange on Wednesday to C$3.94, a welcome lift for the stock, which is down about 23 percent this year.

Bombardier, whose British unit makes trains for use on the country's railways, will build 130 of its new Electrostar rail carriages for Southern, which runs services in south London, Surrey, Sussex and Kent, Britain's Department for Transport (DfT) said on Wednesday.

"This deal for more than 100 new carriages is great news for rail passengers and brilliant news for Bombardier and Derby," Transport Secretary Justine Greening said in a statement.

"It lands Bombardier with a crucial train order and I look forward to Bombardier workers in Derby being among the winners of this important deal."

The DfT is providing 80 million pounds towards the new deal, which will see new carriages enter service in December 2013.

"This is a significant project which emphasizes the performance of Bombardier's products in the UK," said Paul Roberts, president of Bombardier Transportation, Services UK.

"The new trains will be manufactured in the UK with initial production commencing in the latter half of 2012."

The DfT in June awarded a consortium led by Siemens a 1.4-billion-pound contract to build and maintain 1,200 carriages for the Thameslink cross-London railway.

Earlier this month a committee of lawmakers said the process by which Britain reached that decision would be subject to an official review.

The Southern rail contract is the third sizable rail order for Bombardier this month.

Its train unit won orders worth $248 million to provide light rail vehicles and classic trams to the Frankfurt transport authority earlier in December.

Last week, it announced a $648 million order to supply 90 new electric rail carriages to Deutsche Bahn DBN.UL for service also in the Frankfurt area.

(Additional reporting by Nicole Mordant in Vancouver)

Editing by Neil Maidment and Mark Potter

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