Siemens (NYSE: SI; XETRA: SIE) has won a NIS 5 billion tender to supply railway cars to Israel Railways. The tenders committee chose Siemens this morning to supply 671 railway cars over 10 years.
86 railway cars are being ordered now for NIS 700 million, with an option to order an additional 585. Delivery will begin in August 2007. The order will double the number of railway cars in operation.
The railway cars in the tender can be operated by electricity. The deal includes an option for maintenance of the cars, either by Siemens or through a joint venture. Siemens overcame international companies Alstom (NYSE, LSE: ALS) of France and Bombardier (TSX: BBD) of Canada.
Israel Railways chairman Moshe Leon said that the choice of advanced railway cars manufactured by an international concern would make a significant contribution to improving the level of service and quality. He added that a further NIS 2.5 billion allocation for buying railway cars would be needed by the end of Israel Railways’ five-year plan in 2010.
Israel Railways general manager Ofer Linchevski said that the 86 railway cars had been ordered to meet the increasing demand for railway transportation.
Israel Railways’ current lack of railway equipment causes inadequate service, failure to meet schedules, and low frequency on its routes.
Published by Globes [online] - www.globes.co.il - on January 11, 2006