Contract for railcar giant to build 45 cars for transit authority up for vote

A Chinese railcar manufacturer is poised to be awarded another contract from a US city.

The board of the Southeastern Pennsylvania Transportation Authority (SEPTA), which serves the Philadelphia metro area, is scheduled on Thursday to approve a contract for the purchase of 45 railcars.

SEPTA spokesman Andrew Busch said the agency is recommending that CRRC MA, a unit of China Railway Rolling Stock Corp, be awarded the contract based on technical rating and pricing.

CRRC MA told SEPTA it will build the cars for $137.5 million, less than the $171.5 million bid from Canada's Bombardier and a $184.8 million bid from Hyundai Rotem, a South Korean firm with a manufacturing plant in Philadelphia.

"I cannot grasp how they (CRRC) are able to do it at that cost," said Andrew Hyer, a spokesman for Hyundai Rotem, according to the Inquirer.

CRRC MA Vice-President Jia Bo told the Philadelphia Inquirer that CRRC's bid was lower because much of the design work will be done in China, there are strong existing relationships with suppliers, and the company will be sharing expenses among its other US rail projects.

CRRC's contract with SEPTA would include an option for another 10 cars for $23.5 million.

SEPTA spokesman Busch said the agency staff is not concerned with the difference in the bids.

"A thorough technical review was completed for all proposals by SEPTA vehicle engineers. All three proposals SEPTA received were within the acceptable technical range. SEPTA staff has determined the CRRC proposal is the best value and most advantageous for the Authority, and is recommending the award based on technical rating and pricing," he wrote in an email.

Bush said that CRRC MA is a subsidiary of the largest railcar manufacturer in the world. "The parent company produces over 6,000 rail vehicles a year for the Chinese domestic market as well as numerous international markets. These range from high-speed electric multiple units to rapid transit cars," he added.

Last week, CRRC Sifang America broke ground in Chicago for a $100 million plant that will build cars for the city's transit authority.

In 2015, construction began on CRRC MA's $95 million plant in Springfield, Massachusetts, to build rail cars for Boston's transportation agency.

Completion of that plant is scheduled for this year, and the first cars from that plant are expected to be delivered to Boston in 2018.

CRRC was formed in 2015 by the merger of China's top two high-speed rail makers China North Railway (CNR) and China South Railway (CSR). It emphasizes overseas industrial distribution and management in order to achieve global prominence.

paulwelitzkin@chinadailyusa.com