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Business

Canadian Group Bombardier Lands German Train Deal

The rail division of Canada's Bombardier group has signed a framework agreement to provide German rail Deutsche Bahn with passenger rail cars in a deal worth some 1.5 billion euros ($2 billion).

Engineers at work on a Bombardier double-decker coach train

DB already has more than 2000 double-deck coaches in its fleet

Germany's state-owned rail operator Deutsche Bahn revealed in Berlin Monday that it planned to buy up to 1.5 billion euros ($2.0 billion) worth of train cars from Canadian group Bombardier.

The contract was for options on up to 800 double-decker train cars for regional German service, a DB statement said, stressing that the new vehicles will help position it to actively compete for tenders in its local rail transport market in the coming year.

"In these difficult economic times, we have decided to invest in the future," said DB CEO Hartmut Mehdorn. "We wanted to send a signal on economic policy."

Oiling the wheels of growth

Trains lined up in a city center

Germany has invested 2 billion euros upgrading its transit links

Back in December, Germany announced 2 billion euros of new spending for the country’s transport links -- taking its cues from governments across Europe which are boosting expenditure on infrastructure to spur economic growth.

The head of Bombardier Transport, a subsidiary of the Canadian group specialized in rail operations, Andre Navarri, noted that "it is the biggest framework agreement ever signed between Deutsche Bahn with a single supplier."

Transformation of the options to firm deliveries could begin in 2011, and the contract would run until 2020, a DB spokeswoman told AFP.

The agreement would see Bombardier Transportation build 800 double-deck coaches for DB, which was formed in 1994 during the restructuring of the country's railways

following reunification. Since 1994, DB has bought over 1600 double-decker coaches.

Montreal-based Bombardier is the world's largest maker of rail equipment and the third-largest civil aircraft maker.

Bombardier's stock was up 3 Canadian cents, or 0.6 percent, to C$4.75 early on Monday on the Toronto Stock Exchange

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