September 23, 2016 / 9:57 PM / 2 years ago

China's CRRC, Bombardier to join forces on international bids

MONTREAL (Reuters) - Canada’s Bombardier Inc (BBDb.TO) and the China Railway Rolling Stock Corporation (CRRC) (601766.SS), longstanding partners in the Chinese domestic rail market, said on Friday they had expanded their relationship to join forces on international bids.

A plane flies over a Bombardier plant in Montreal, January 21, 2014. REUTERS/Christinne Muschi

“The agreement sets the stage for us to win more joint bids, both in China and worldwide,” said Mike Nadolski, a spokesman for Montreal-headquartered Bombardier.

Nadolski could not specify a time frame when the two would bid together for a project.

Encouraged by Beijing, China’s railway firms are now aggressively bidding for contracts in overseas markets, with CRRC winning a $1.3 billion bid in March to build rail cars for the city of Chicago. [nL4N16I3J4]

Foreign participation in China’s rail market has for the last decade been limited to minority stakes in joint ventures or as sub-suppliers of domestic players, often with the condition that they transfer technology to local partners.

The Canadian plane-and-train maker has operated in China for years through joint ventures and helped build the world’s biggest railway network by both length and revenue.

For Bombardier, being able to bid with CRRC on international deals is an “interesting development,” one transportation analyst said on Friday, speaking on condition of anonymity. But without a specific project to bid on, the announcement is not material for Bombardier, he said.

Both companies have recently faced manufacturing headaches.

In July, CRRC said it would step up quality checks on its products after Singapore shipped 26 of its metro trains back for repair just three years after they were delivered. [nL4N19S214]

Also in July, the provincial agency in charge of transportation in and around Toronto said it had filed a notice of default against Bombardier Inc for delayed delivery of a fleet of light-rail vehicles. [nL1N1A61HK]

Reporting By Allison Lampert; Editing by Cynthia Osterman

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