Sources inform ''Globes'' that Israel Railways is in advanced negotiations with Bombardier Inc. (TSX:BBD), Siemens (NYSE: SI; XETRA: SIE), Alstom (NYSE, LSE: ALS) and Vossloh AG (XETRA:VOS) to outsource maintenance of rolling-stock. Israel Railways uses locomotives and rolling stock of all four companies. Under the preliminary format of the plan, Israel Railways will set up a joint venture with each one of the four rolling-stock manufacturers for the maintenance of equipment sold to Israel Railways.
Negotiations with Bombardier of Canada are for the maintenance of 48 carriages, the negotiations with Germany’s Siemens are for the maintenance of 87 single-deck carriages due to be delivered, and the negotiations with France’s Alstom and Spain’s Vossloh Espana SAU are for locomotives due to be sold to Israel Railways.
Israel Railways wants to outsource rolling-stock maintenance for two main reasons: to cut costs, and to improve maintenance efficiency, which will increase its operating fleet. The main problem facing the plan is opposition by the Israel Railways workers committee.
Israel Railways general manager Ofer Linchevski confirmed the report. He told “Globes” that the company’s expansion required the procurement of equipment and the preparation of a logistics network to maintain it. “The problem with the workers committee will be solved through negotiations,” he said.
Israel Railways workers committee chairman Shaul Okish told “Globes” that the workers would consider consenting to the structural change only if they were given a 51% stake in the new company.
Israel Railways’ fleet of locomotives and rolling stock is its operational Achilles Heel. The company suffers from both a shortage of equipment and obsolete equipment. Israel Railways has 146 double-decker carriages, 60 old passenger carriages, 48 sets of carriages, 37 additional carriages, and 80 locomotives. It is in negotiations for the purchase of six locomotives and 87 passenger carriages from Siemens.
Published by Globes [online], Israel business news - www.globes.co.il - on December 7, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006