CSR Sifang America, a subsidiary of China Railway Rolling Stock Corp (CRRC), has been awarded a $1.3 billion contract to supply up to 846 new 7000-series railcars for the Chicago Transit Authority (CTA).

The company said on Wednesday that it will also build a new railcar assembly facility in the Windy City, representing an investment of $40 million, and will generate about 170 jobs.

"CSR Sifang America was selected because its proposal provided the best overall value for the Chicago Transit Authority, including technology, production schedule, creation of jobs in the US and price — CSR America's bid was $226 million lower than the competing bid from Bombardier Transportation," CTA spokesman Jeff Tolman told China Daily.

"With this agreement, CTA riders will get state-of-the-art rail cars and Chicago returns to our roots as the place where the next generation of rail cars are built, providing good jobs for our residents. That is a classic win-win for Chicago," Mayor Rahm Emanuel said in the CTA statement.

In July 2014, Emanuel and the Chicago Federation of Labor announced a partnership to encourage the creation of US manufacturing jobs by working with CTA to include a "US employment" provision in the bids for the new cars.

"CSR Sifang America has proposed a facility for the southeast side of Chicago. The size and schedule of the facility have not yet been determined, but CSR Sifang America has pledged to invest up to $40 million," Tolman said.

The facility is expected to hire 170 locals, including mechanical engineers and electricians.

The prototype railcars are scheduled for delivery to the CTA in 2019 and are expected to be in service the following year. The base order of more than 400 railcars will arrive by 2024, with options for an additional 446 vehicles.

"This railcar purchase — the largest in CTA history — will give CTA one of the newest fleets in the United States," CTA President Dorval R. Carter Jr said in the press release.

Once delivery of the new rail cars is complete, the average age of CTA rail cars will drop from 26 years to 13 years.

The new 7000-series railcars are projected to save the CTA about $7 million a year due to reduced maintenance costs and less use of power.

CRRC Qingdao Sifang said in a statement that the new vehicles, equipped with LED lighting, passenger information systems and air conditioners, will be able to tarvel at 112 kilometers per hour (70 mph).

Last year, another CRRC subsidiary was awarded a contract from the Massachusetts Bay Transportation Authority to design and manufacture 284 subway cars for Boston's transit system.

The 220,000-square-foot assembly facility has broken ground in Springfield, Massachusetts, and is expected to provide 150 jobs for local residents in manufacturing, engineering and administrative roles.

Wang Mengshu, a deputy to the National People's Congress and deputy chief engineer of China Railway Tunnel Group Ltd, hailed the Chicago deal as "another major breakthrough for the Chinese railway industry in the North American market".

Contact the writers at hezijiang@chinadailyusa.com.