China: Siemens Wins Strategically Important Contract in Shanghai
25 March 2002 16:50
Siemens Transportation Systems (TS), together with its Chinese partner Zhuzhou Electrical Locomotive Works (ZELW), is to deliver the heavy rail rolling stock for Shanghai’s latest metro line, Line 4 (Pearl Line Phase 2). A corresponding contract for 28 six-car metro trains was signed today in Shanghai. An option for ten more identical trains for the extension of Line 1 was also granted. With these strategically important contracts worth a total of around U.S.$270 million, TS has consolidated its already enviable position in the growing metropolis and has also considerably strengthened its prospects in the promising Chinese market for mass transit systems as a whole.
'For Siemens, this order is a genuine breakthrough', emphasized Prof. Edward G. Krubasik, who on the Corporate Executive Committee is responsible for the TS Group, 'because it means we have now successfully introduced our own modular metro concept in China as well.' Delivery of these heavy rail vehicles will start in Spring 2004 and end in the middle of 2006. Approximately 80 percent of the contract’s value is accounted for by products and services from Siemens. The share of local content totals just over 60 percent of the total.
'This contract will provide the basis for long-term collaboration with our local partner, ZELW,' explained Hans-Dieter Bott, who as Group Vice President is responsible for the Asian region. 'As a result, we’ll also be able to achieve a high level of local content when future invitations to tender are issued for mass transit rolling stock in China.' In the area of signaling and safety systems, TS has been doing this for years thanks to its highly successful joint venture in Xian. With these two strong footholds, TS has every chance of continuing the steady expansion of its business activities in the dynamic Chinese market for mass transit systems.
Around two dozen Chinese cities, each with more than a million inhabitants, have announced their acute need for modern mass transit solutions. In future, there will be a total of 17 mass transit lines—eight metro lines, five LRT lines and four rural lines—in Shanghai alone, which, with a population of more than 16 million, is the largest city in China. The first two metro lines were built as turnkey projects by a consortium that included Siemens and were opened in 1995 and in 2000.
Except for the first two trains to be completely built in the Vienna plant of the TS Heavy Rail division and exported to China, the new heavy rail rolling stock for the Shanghai contract will be manufactured locally in the factory of ZELW, our partner in Zhuzhou. For these locally manufactured metros, Siemens is to supply all the electrical and electronic equipment, as well as a variety of mechanical components.
The Transportation Systems Group (TS) of Siemens AG is one of the leading international suppliers to the railways industry. As single source supplier and system integrator, the Group combines in its business seg-ments Automation & Power, Rolling Stock, Turnkey Systems and Integrated Services all the expertise neces-sary to cover the spectrum from signaling and control systems to traction power supplies, as well as rolling stock for mass transit, regional and main line services. Extensive experience in project management and forward-looking service concepts complement our portfolio. In fiscal 2001 (ended September 30) TS generated sales of €4.0 billion with a staff of around 14,800 the world over. Earnings before interest, tax and goodwill amortization (EBITA) amounted to €186 million. Further information on TS can be found at www.siemens.com/ts
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