Boston Subway To Use Chinese Trains

Posted: October 27, 2014 in Econ 101, Technology and Energy

SEE ALSO: China to Pitch High-speed Trains to California


Coming to a Boston Subway Near You: Made-in-China Trains

Boston transport authorities awarded China CNR Corp. (6199) a $567 million contract to supply trains for the city’s subway system, the first deal of its kind for a Chinese company in the U.S.

The deal would put CNR’s products in all of the world’s six continents, the company said in a statement today. The proposal is for CNR to supply 284 cars for the Boston subway’s orange and red lines, with an option for 58 more, according to the Massachusetts Department of Transportation’s website.

The deal breaks new ground for Chinese train makers whose overseas push, backed by Premier Li Keqiang, has been mostly limited to developing markets. Fellow state-owned CSR Corp. (1766) plans to bid for rail projects in California, though no contracts have been signed.

“It’s symbolic because the U.S. market is very difficult to break into,” said Lawrence Li, a Shanghai-based analyst at UOB-Kay Hian Investment Co. (UOBK)

CNR climbed to a record in Hong Kong and rose 5.3 percent to its highest close since July 2011 in Shanghai trading.

CNR equipment will replace 32-year-old cars on the orange line and 44-year-old cars on the red line, which connects Cambridge to downtown Boston. Delivery of the cars will begin in 2018 and finish in 2021, the Massachusetts Bay Transportation Authority said in an Oct. 21 statement on its website.

CNR will dedicate two manufacturing lines at a Chinese facility and build a 150,000 square-foot facility in Springfield, Mass. to assemble the vehicles, according to the statement.

CNR offered the cheapest price among five bidders and a little more than half of Bombardier Inc. (BBD/B)’s bid. The other bidders were South Korea’s Hyundai Rotem Co. (064350), Japan’s Kawasaki Rail Car and CSR Qingdao Sifang.



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