BEIJING (Reuters) - Canada’s Bombardier Inc (BBDb.TO) expects to receive safety certification from China for its high-speed trains as early as next month, providing a springboard for more orders, the firm’s top executive in the country said.
The regulatory clearance, after years of tests, means Bombardier will be able to begin delivering 80 of its CRH380D trains first ordered in 2009, worth an estimated $2 billion to the Canadian firm. China tightened rail safety rules after 35 people died in a train crash in 2011 near the city of Wenzhou.
“In the next two weeks, by end of next month, (the train) is expected to get the certificate. Then we will start delivery,” Bombardier China’s president, Jianwei Zhang, told Reuters in an interview on Tuesday.
The high-speed rail sector in China has grown rapidly over the past decade after the country set out to build the world’s longest high-speed network. Bombardier, which has five joint ventures in the country, is the only foreign firm in China able to take orders for a whole high-speed train.
The expansion of its high-speed rail sector has pushed the government to merge its top two train makers, CSR Corp (601766.SS)1766.HK and China CNR 601299.SS6199.HK, to create a firm able to compete internationally against the likes of Germany’s Siemens (SIEGn.DE) and France’s Alstom (ALSO.PA) for orders.
Asked whether receiving the safety certification would generate new orders, Zhang said, “Absolutely...Frankly speaking, I cannot say too much, but I’ve already got an order.” The official said he couldn’t comment further before official confirmation of the order is announced.
The CRH380D trains ordered in 2009 by China’s now-defunct Ministry of Railways completed the 600,000 kilometres of test operations now required for certification last October. The trains will be delivered to the ministry’s successor, state-run network operator China Railway Corporation.
Capable of speeds of up to 380 kilometres per hour, the trains are being jointly produced with a unit of domestic train maker CSR Corp (601766.SS)1766.HK in a contract worth $4 billion in total.
Zhang said he was not concerned about the possibility of growing competition in the international market for high-speed trains. He said the firm’s Chinese partners were competitive on price and financing, while Bombardier had advanced technology.
“After merging, CNR and CSR will be stronger for the international market. And Bombardier as a partner, if your partner is stronger, it’s better for us,” he said.
Editing by Kazunori Takada and Kenneth Maxwell