Monday, October 31, 2016

Alstom and Bombardier set to win the “contract of the century” – Europe1

The “contract of the century” to renew the RER ile-de-france to be precise. After the media specialist Mobilettre, Alstom and Bombardier are expected to win this strategic agreement, an information confirmed by Europe 1. The two companies, which saw their order book is empty dangerously, so what to do to turn their factory for a few years. On the other hand, the new one is more difficult to accept for the competitor CAF, which was considered to have good chances of winning. All the more that the shadow of a political decision hangs over this choice.

what is this “contract of the century” ? The greater paris area, is constantly trying to favor public transport at the expense of the car, but this policy is running up against a limit, especially for the inhabitants of the large and small crowns : a regional express network (RER aging, punctuality random and crowded trains which are always on some portions. The union of transport of Ile-de-France (Stif) has therefore decided to renovate some of the lines, even to the extend as it is the case of the RER E, but also to renew its rolling stock. A call for tender was launched in may 2013, quickly dubbed “the contract of the century”, and for good reason : it is to build 270 trains RER NG (new generation) by 2022 for a total of between 3 and 3.5 billion euros. 124 trains must be assigned to the RER line E, while line D must get a hundred.

That was on the ranks ? Three rail manufacturers emerged with all the more gusto that orders railways are increasingly rare in France. The first candidate is Alstom, which has made about him at the start of the school threatening to close down its site in Belfort, and getting the State of a command surprise of twenty high-speed trains.

The Canadian Bombardier is also vying and has partnered with Alstom to put all the chances on his side. Like his French counterpart, Bombardier has not hesitated to consider the worst if it does not sink quickly as a contract : its French factory in Crespin, in the North, has no “command to produce beyond the 1st quarter of 2019″, highlighted in mid-October, the president of the French subsidiary. However, the difference of Alstom, who is doing very well with the exception of France, Bombardier encounter real difficulties and is in a full restructuring.

The third candidate is the Spanish CAF, which has a plant in Bagnères de Bigorre. And as the presidential campaign, that approach is conducive to calls for help, CAF has also warned that there would be little work at the end of 2018 and that he was desperately in need of orders.

Why Alstom and Bombardier are going to take. Facing three enterprises lack of orders in France, the State was highly anticipated and has decided to call in an auditing firm to compare offers and thus avoid being accused of favoring this or that group. This study would have led to the choice of the offer of the tandem Alstom – Bombardier because it is the only one able to follow the pace set by the buyer : provide 70 trains per year.

The offer of CAF ruled out despite more competitive prices. The constructor Spanish, therefore, would have been rejected because of its size : it has a hundred employees in France, compared to 1,000 for Alstom in Valenciennes and 2,200 for Bombardier at Crespin. But this explanation has difficulties to pass from CAF, which ensures that he would have been able to hire 500 employees and rely on other plants of the group located in Spain. If the choice of Alstom-Bombardier is confirmed, it would be much more difficult to accept that FCA proposed a price more competitive than its competitors.

A decision purely economic or also political ? The constructor Spanish is all the more surprising that he says that the audit ordered by the State was not foreseen in the tender. Moreover, it was launched without warning at the beginning of the month of October, that is to say, just after the Alstom case : several observers question the timing of this audit, which can be seen as an indirect way to legitimize the choice of the French constructor.

If the government has decided to call in an outside service provider, it is precisely to avoid this kind of suspicion. But in rejecting the offer of CAF, the State savings also a likely controversy a few months of the presidential election : of 3,200 jobs are under threat in the North, barely mitigated by the promise of 500 new hires in the South-West. By choosing, on the contrary, the joint offer of Alstom and Bombardier, the risk of social degradation is limited to 100 positions. All these reasons have led CAF to reserve the right to challenge the result of this call for tender, once it is formalized. And to reiterate its threat to close its French site if no order is passed in the coming months. The French rail sector is a decidedly explosive.


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