China’s State Backed CRR Corp. Unit Bags $1.3 Billion Chicago Rail Car Contract

March 10
11:43 PM 2016

Chicago Transport Authority (CTA) has awarded $1.3 billion rail cars contract for the city's "L" urban rail system to a unit of China's CRRC Corp. on Wednesday. The deal aims a monumental overhaul replacing about half of its fleet and has been recognized as the largest car purchase in CTA's history.

CRR Corp. has bagged the second Chinese deal in the US in just 18 months after CNR Corp. has won the $567 million deal to supply trains for Boston's subway system. Under the deal, CSR Sifang America JV, will supply 846 units of 7000-series rail cars to CTA.

Chinese state-owned rail car manufacturing company CRRC Qingdao Sifang and CSR America are the other partners of CSR. CSR has quoted the lowest rate in the bid, reports Bloomberg citing a CSR statement furnished in its website on Thursday, as the source.

The last batch of CTA rail tracks are of 5000-series and have been designed in the past decade and built by Bombardier Transportation, which lost this year's bid. The new cars have been planned to replace 2600 cars produced in 1980s, according to a report published in the Chicago Tribune.

Prototypes for an initial order of 400 rail cars are scheduled to be delivered by 2019 and expected to go into a service a year later after tests. CSR will also invest $40 million to build a rail assembly facility in southeast side of Chicago.

The deal also appears as the largest subway car project received by a Chinese equipment company from a developed country till date. The deal enables to land produce with tags reading 'Made In China' in Chicago, reports Reuters citing an email statement from CSR.

China's railway firms have been reported bidding aggressively for contracts in overseas markets with inspiration from Beijing. However, they have so far been successful mostly in developing markets. Chinese firms have also expressed interest in developing high speed rail lines in California and Nevada.

CNR and CSR Corp. have merged last year forming CRR Corp. aiming to achieve greater economies and compete more effectively in the global market. Chinese Premier Li Keqiang have reportedly been leading an overseas push by train equipment makers as part of strategy to transform China into an advanced industrialized nation.

Chinese Premier Li Keqiang has reportedly been trying to establish his country as an advanced industrialized nation. Following the national strategy, Chinese companies are bidding desperately to get rail contracts while finding success only in the developing countries. A unit of CRR Corp. has become successful in getting $1.3 billion contract for supplying rail cars to CTA on Wednesday, the largest contract in a developed country.

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