Chinese firm wins $567M contract to build rail cars in Springfield

[cirr]

Chinese firm wins $567M contract to build rail cars in Springfield


Massachusetts Gov. Deval Patrick, left, speaks Tuesday, Oct. 21, 2014, at the site of the former Westinghouse plant where he announced that the Changchun Railway Vehicles Co., plans to build rail cars for use by the Massachusetts Bay Transportation Authority at a new factory in Springfield, Mass. At right is Richard Davey, state secretary of transportation. The T's board of directors is scheduled on Wednesday to discuss authorization of a $566 million initial contract with Changchun, a subsidiary of the Chinese-owned CNR Corp. (AP Photo/The Republican, Mark M. Murray)

By PHILIP MARCELO

Associated Press

Wednesday, October 22, 2014
(Published in print: Thursday, October 23, 2014)


BOSTON — A Chinese government-owned rail company was awarded a $566.6 million Massachusetts state contract on Wednesday to build subway trains for the “T,” the nation’s oldest subway system, despite concerns from local activists about China’s human rights record as well as complaints from competitors that the company’s winning bid was unrealistically low.

The Massachusetts Department of Transportation’s board of directors voted unanimously to approve a contract with CNR MA Corp. to build 284 new subway cars. The new cars are needed to replace the Massachusetts Bay Transportation Authority’s 32-year-old Orange Line trains and the 44-year-old Red Line cars that serve the Greater Boston area.

CNR MA is a joint venture of China Changchun Railway Vehicles and China CNR Corp. Ltd., a Chinese government-owned enterprise that is the world’s largest rail car maker. The project would be its first in North America.

At a Wednesday public hearing, Chai Ling, a Massachusetts resident who played a prominent role in the 1989 Tiananmen Square student movement, said the contract award would put a “blood-stained record” on the state, citing the “tyranny” of China’s government. “Please do not stand on the wrong side of history,” she said.

Xiwei Lu, president of the CNR MA, said later that his company abides by all labor laws and provides wages “two or three times” the average pay in China. “We care about our employees,” he said, inviting reporters to visit the company’s facilities in China. “They are the real creators of value for our company.”

On complaints from competitors, Lu said the company is committed to establishing a foothold in the U.S. and its bid and proposed new manufacturing facility was a reflection of that. “We want to be in this market,” he said.

An MBTA spokesman said the agency’s review found no human rights violations by China CNR Corporation Limited. The contract calls for at least 60 percent of the work to take place in the U.S. and for the company to offer Massachusetts workers salary and benefits at least comparable to the region, officials said Wednesday.

CNR MA has pledged to build the subway cars at a new, $60 million factory in Springfield that would become its U.S. headquarters. The 150,000-square-foot facility, proposed on the 40-acre former Westinghouse Electric plant site, is expected to create over 250 new manufacturing and construction jobs for the western Massachusetts region.

The rail cars, the first of which will be delivered in 2018, are expected to help increase the subway system’s capacity and decrease passenger wait times. The MBTA says the total Red Line and Orange Line improvement budget is about $1.3 billion and calls for upgrades to the system’s rail car maintenance and storage facilities.

 

[C130]

i see no problem. peace through work. our infrastructure is in dire need, and if the chinese want to come in and give a helping hand and finance good.

 

[cirr]

Don't compete with us，or we will have you steam-rolled。

Reactions by competitors in the bidding are simply hilarious。These people should learn that the days when they can charge their customers exorbitant prices for mediocre products and services are gone。


Chinese Company Hoptes MBTA Contract Will Be U.S. Launching Pad

By Matt Murphy October 22, 2014

BOSTON — Over the objections of rival bidders and human rights advocates, a Chinese rail car manufacturer on Wednesday won a lucrative state contract to supply the MBTA with 284 new Red Line and Orange Line cars to be assembled in Springfield.

The Massachusetts Department of Transportation Board unanimously awarded a $566.6 million contract to CNR MA, a subsidiary of the world’s largest manufacturer railcar manufacturer in China who plans to use the MBTA project as an entry point to the North American manufacturing market.

“Simply put, this board vote will ensure we get people to work in Massachusetts and put people to work in Springfield,” outgoing Transportation Secretary Richard Davey said, attending his final MassDOT board meeting before he plans to resign next week.

The MBTA in January turned to another international company, the France-based Keolis, to take over operations of the state’s commuter rail network with an eight-year, $2.69 billion contract.

The selection of CNR MA, who significantly under-bid other competitors for the contract, drew criticism during a board meeting Wednesday related to concerns about doing business with a company controlled by the Chinese government, which has a questionable record on worker and human rights.

Officials said no American companies currently manufacture subway cars.

Three of the bidders not recommended for the contract – Bombardier, Kawasaki Rail Car, and Hyundai Rotem – also urged the MassDOT board to delay awarding to the contract to CNR MA, and to seek “best and final” offers from all the bidders.

The competitors questioned CNR’s lack of experience building and delivering rail coaches in the United States, and an attorney with Hyundai Rotem also raised a question about “impropriety” in the process after Gov. Deval Patrick volunteered this week that he met in Hong Kong with CNR officials in December 2013 in the middle of the bidding process.

Davey also attended the meeting in Hong Kong last December. “The governor met with CNR while he was on a trade mission last year. The governor has been public about that meeting and his interest in learning more about the company,” MassDOT spokeswoman Cyndi Roy said. “The details of the procurement were not discussed at that meeting nor did the Governor play a role in deciding which company the MBTA recommended to the board.”

MBTA General Manager Beverly Scott said moving to a “best and final” offer was “unwarranted” because the agency did not need to seek clarity on any portions of the bids. “It’s not an auction. I’m not trying to be glib,” Scott said.

The bid from CNR MA came in significantly lower than any of the other bids, with the closest coming from Hyundai Rotem for $720.6 million. Bombardier bid $1.08 billion, and Kawasaki $904.9 million.

Board member Janice Loux called it “hypocritical” for Hyundai Rotem to question CNR MA’s experience in North America after the MBTA awarded Hyundai its first contract in the United States for commuter rail cars. Hyundai Rotem has been criticized by transportation officials for falling behind schedule and delivering trains that needed to be fixed once they arrived in Massachusetts.

“This is a win for our riders. It’s a win for our financial bottom line. And it’s a win for the authority,” Loux said.

The board did not discuss the concern over human rights violations in China, and offered praise of the procurement process.

Robert McGinn, the former chair of the state Republican Party, testified against doing business with China, which he described as a repressive regime. McGinn is married to Chai Ling, one of the student leaders in the Tian’anmen Square protests of 1989 and the founder of All Girls Allowed, a humanitarian organization that aims to stop the human rights violations related to China’s One-Child Policy.

“I believe the governor will likely live to regret this decision should he ever decide to seek another public office,” McGinn said, suggesting the contract decision would likely “follow him like a dark cloud.” Ling also testified against doing business with China.

MBTA officials said nothing in their background checks found human rights violations by CNR.

“We will abide all the laws and we pay much attention to our employees. We care (about) our employees. They are the real creators of value for us,” CNR MA President Xiwei Lu said after the vote. “We are the leading rail car manufacturer in the world. We are the biggest one. We cannot be this if we are tough to my employees.”

The contract requires senior level executive engagement, a Massachusetts-based project team, and wages and benefits for employees comparable to the region and prevailing wages in the trades.

Lu said CNR pays its employees in China a “very nice wage,” equal to two or three times the Chinese average, which he estimated at $3,000 a year. “It’s a hard life. We have 1.3 billion population,” he said.

CNR has supplied rail cars for more than 13 countries, including Brazil, Argentina, Australia, New Zealand and Hong Kong. Lu said he was able to under-bid the other companies because CNR hopes the MBTA project will be the start of a larger expansion into the North American market.

“We are committed to be here. I want to enter this market. So I don’t calculate all the investment in one project,” Lu said.

CNR MA plans to build a $60 million manufacturing facility on Page Boulevard in Springfield to serve as the company’s U.S. headquarters with assembly and office space and a test track for the new MBTA cars. The company estimates creating 100 construction jobs in the city and 150 new manufacturing jobs that will remain after the MBTA project is complete as CNR seeks additional domestic contracts. Work on the new plant will begin in the fall of 2015.

The contract also calls for 60 percent of all parts to come from the United States.

James White, from the Access Advisory Committee to the MBTA, testified in support of the contract and the specifications of the new subway cars, which include larger doors and passenger capacity. “These will be the most accessible vehicles in the T’s history,” White said.

The MBTA will purchase 152 new Orange Line cars to replace the 32-year old fleet and 132 new Red Line cars that haven’t been upgraded for over four decades. The design process is expected to take three years for the Orange Line and an additional 15 months for Red Line cars, with pilot cars expected to be delivered on the Orange Line in early 2018 and Red Line cars a year later.

All new cars, including an additional 58 optional Red Line cars included in the contract, are expected to be in service by 2023. The total cost of the project is $1.3 billion, including $800 million for the purchase of the cars, design, engineering, testing and legal costs and $500 million for signal system upgrades and expanded subway car maintenance facilities at Wellington Station in Medford and the Cabot facility in Boston.

 

[cirr]

Leaving aside political considerations，it will be cakewalk for China to win the bid for the California High-Speed Rail Project。

 

[C130]

Leaving aside political considerations，it will be cakewalk for China to win the bid for the California High-Speed Rail Project。

i'm so-so on HSR, but California makes sense though.
I like the TGV trains.

 

[TaiShang]

Obviously, the China-US business relations should move beyond the orthodox buy & sell of manufactured goods and commodities. US already has considerable investment in China (e.g., biomedicals, pharma), China now should be able to be more constructively and concretely present on the US market. It is a win-win.

 

[mike2000]

wow. cant believe my eyes. How the wolsd seems to have changed. China now building railways for the U.S? The U.S reallly needs to buckle up and invest more in its infrstructure and nurture its own national railway champions, just like in europe we have siemens, alstom,canadas bombardier, japans shinkasen,hitachi and china CSR and CNR .
Anyway though im really shoked and surprised to see the chinese won thia contract, i think its good for the U.S as they seem to be getting the best value for money on this. Other compainies usually overcharge we consumers, so i always welcome competition since it helps us consumers

 

[kyle Chiang]

wow. cant believe my eyes. How the wolsd seems to have changed. China now building railways for the U.S? The U.S reallly needs to buckle up and invest more in its infrstructure and nurture its own national railway champions, just like in europe we have siemens, alstom,canadas bombardier, japans shinkasen,hitachi and china CSR and CNR .
Anyway though im really shoked and surprised to see the chinese won thia contract, i think its good for the U.S as they seem to be getting the best value for money on this. Other compainies usually overcharge we consumers, so i always welcome competition since it helps us consumers

Completely agree with you.Competition make world better~
Welcome more and more Britain and American companies come to make money in China.

 

[cnleio]

Money is coming, $$$ from American. Good job !

Money is coming, $$$ from American. Good job !

 

[C130]

Money is coming, $$$ from American. Good job !

no we'll just borrow the money and it'll just added to the debt clock

 

[cnleio]

no we'll just borrow the money and it'll just added to the debt clock

Borrow money == Suicide slowly

U.S.A superweapons << Huge money support << $$$ Credit. When U.S Dollar as the international currency bankrupt, everything will go.

Just like i said in other thread, there will be no War between U.S and China, no nation can replace China to U.S even borrow money. U.S and China we r "一根绳子上的两只蚂蚱/ Both nations r standing in the one ship" but Chinese know swimming.

Now our relationship more like the WWII U.S-Britain, who's the U.S? Britain ?

 

[Aepsilons]

wow. cant believe my eyes. How the wolsd seems to have changed. China now building railways for the U.S? The U.S reallly needs to buckle up and invest more in its infrstructure and nurture its own national railway champions, just like in europe we have siemens, alstom,canadas bombardier, japans shinkasen,hitachi and china CSR and CNR .
Anyway though im really shoked and surprised to see the chinese won thia contract, i think its good for the U.S as they seem to be getting the best value for money on this. Other compainies usually overcharge we consumers, so i always welcome competition since it helps us consumers

It is not the first time, buddy. During the American Industrial Revolution, it was the Chinese hard laborers who toiled away to help build American railways. This was 140-150 years ago. They don't get enough credit, but credit is owed where its due. One can even argue that China indirectly helped America's industrialization in the 19th century.

 

[C130]

Borrow money == Suicide slowly

U.S.A superweapons << Huge money support << $$$ Credit. When U.S Dollar as the international currency bankrupt, everything will go.

Just like i said in other thread, there will be no War between U.S and China, no nation can replace China to U.S even borrow money. U.S and China we r "一根绳子上的两只蚂蚱/ Both nations r standing in the one ship" but Chinese know swimming.

Now our relationship more like the WWII U.S-Britain, who's the U.S? Britain ?

well good thing China only holds a small part of our debt. defaulting big deal everyone does it at least once right

 

[mike2000]

It is not the first time, buddy. During the American Industrial Revolution, it was the Chinese hard laborers who toiled away to help build American railways. This was 140-150 years ago. They don't get enough credit, but credit is owed where its due. One can even argue that China indirectly helped America's industrialization in the 19th century.

Wow....i never knew this.
Always good to learn something new. Thanks my good friend nihonji.

 

[Aepsilons]

Wow....i never knew this.
Always good to learn something new. Thanks my good friend nihonji.

The pleasure's mine, buddy.