Abellio contract is consolation for Bombardier

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An image of a Bombardier Aventra trainset. The rail supplier will build 333 of the cars for use in the U.K.
LONDON — A $1.3-billion rail and infrastructure upgrade in England’s Midland region by Dutch transport giant Abellio includes an investment in 333 coaches to be assembled by Bombardier. This will be a significant consolation for the Canadian company just weeks after the snub from German conglomerate Siemens following merger talks during the summer.

Utrecht, The Netherlands-based Abellio, along with partners Japan’s East Japan Railway Co. and Mitsui, picked up a 10-year contract to run the next West Midlands rail franchise under a new company named West Midlands Trains Ltd. from December 2017 until 2026. Abellio is a majority shareholder.

Taking over running of the franchise from London Midland, Abellio has placed a $900-million order for more than 100 trains as part of a high-tech upgrade of its franchise, which covers routes in the English West Midlands, as well as from London Euston to Crewe, and Liverpool to Birmingham in England. A further $400 million will be used to improve the railroad’s infrastructure

Bombardier will use its 175-year-old train-building works in Derby, England, to produce the coaches for 90 mph three-car electric trains for metro services and 110 mph five-car electric trains for outer suburban and long distance configurations. Spanish railcar manufacturer Construcciones y Auxiliar de Ferrocarriles will also supply two-car diesel multiple unit trains and four-car trains as part of the investment.

“Our modern Aventra trains will be built in the Midlands for the Midlands, and provide passengers with greater connectivity, reliability, and shorter journey times,” says Richard Hunter, U.K. managing director, Bombardier Transportation. “Being selected for this important order is another huge endorsement of our workforce and the quality of the products we design, engineer and manufacture here in the UK.”

The $400 million infrastructure investment will be plowed into new train depots and spent on station modernization. This will include 1,000 new automobile parking spaces and more than 2,500 motorcycle parking spaces. Feasibility studies will also be undertaken into the prospect of opening new stations in the region.

In September, rivals Siemens and Alstom agreed to merge their rail operations in a deal to create a European heavyweight rail manufacturer, called Siemens Alstom, to compete with China’s state-backed operator CRRC. Siemens merged its mobility unit into Alstom, taking a 50 percent stake in the French company.

Previously, Bombardier had been in discussions over a merger with Siemens. When news of talks between Siemens and Alstom broke, Bombardier shares dropped more than 10 percent. Bombardier’s rail operations are key to its transportation unit, which took $7.6 billion in revenue in 2016.

Abellio is the international passenger transport subsidiary of the Dutch national railroad company Nederlandse Spoorwegen. In the U.K. it operates the ScotRail, Greater Anglia and Merseyrail franchises.
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