Interview: #Alstom Sees Growth Potential in SEE #Metro Rolling Stock Market

INTERVIEW - Alstom sees growth potential in SEE metro rolling stock market Gabriel Stanciu, Alstom Managing Director for Romania, Bulgaria and Moldova Source: Alstom website

(SeeNews) – French rolling stock manufacturer Alstom is interested in tenders for metro trains across Southeast Europe, as it sees a high growth potential in this market segment stemming from the region’s accelerated urbanization, Alstom managing director for Romania, Bulgaria and Moldova Gabriel Stanciu told SeeNews.

“The world counts today more than 12,200 km of tracks and over 150 million city dwellers are commuting every day via metro. It is clear that the metro market will continue to grow for the years to come as a result of high urbanization,” Stanciu told SeeNews in a recent emailed interview.

“During the past century, metro systems have been key to the success of many major world cities,” he noted.

In November, Alstom won a 100 million euro contract to deliver 13 Metropolis trains to Bucharest underground railway system operator Metrorex. The contract has an option for the delivery of a further 17 trains that can bring its total estimated value to 240 million euro.

According to the Association of the European Rail Supply Industry, UNIFE, the average annual accessible market for metro trains worldwide is estimated at 7 billion euro ($8.5 billion) for the period 2019-2021, compared to 5.4 billion euro during 2013-2015 – an increase of 4.5%, Stanciu said, adding that there is a significant need for modern rolling stock in Southeast Europe (SEE) and Alstom has been a top provider for the past decades.

OVERHAULING BULGARIAN STATE RAILWAYS’ FLEET

At the end of 2019, Alstom signed a five-year 137 million levs ($78 million/70 million euro) deal for the maintenance of diesel and electric multiple unit trains operated by Bulgaria’s BDZ Passengers, part of state-owned railway group BDZ Holding.

“This is Alstom’s first contract on the Bulgarian market, following a tender that took more than two years to complete. It involves the full maintenance for the 46-train passenger fleet of BDZ Passenger Services, both diesel and electric units. Despite the enormous difficulties and significant delays caused by the coronavirus pandemic, the project has started and is progressing,” Stanciu said.

Three depots in Bulgaria’s three largest cities – Sofia, Plovdiv and Varna, have undergone extensive refurbishing. Alstom opened an office in Sofia, and has started building a network of local suppliers to work with. According to Stanciu, more than 50 people are now full-time dedicated to the BDZ project and their number is expected to grow in the overhaul phase.

“Some of these trains have been completely immobilised for a long time, and now they are being brought back to life. We have started working on four such diesel trains out of the six covered by this contract, we have changed the motors and made them functional again.”

Alstom has started upgrading BDZ’s electric units with additional features such as Wi-Fi for passengers and lighting systems using LED technology. In the first quarter of 2021, the company will start the fleet overhaul, as part of a massive operation during which it will replace various important parts, perform checks and tests in order to make sure the trains can operate safely.

Alstom, which is a transport solutions provider active in all areas of modern mobility, submitted an offer for the delivery of 16 electric trains to BDZ worth an estimated 246.8 million levs in June.

“We have been pre-qualified for the last stage of the tender, having high hopes to be chosen as preferred bidder,” Stanciu said. Bulgaria recently announced plans to spend EU funds made available under the Recovery and Resilience Facility on new rolling stock for BDZ.

“Passenger fleet is another key area in need of massive improvements and upgrades throughout the region, in all countries,” Stanciu stressed. 

RAILWAY INFRASTRUCTURE UPGRADES

Alstom is very active in tenders for railway infrastructure upgrades in Romania but not so in Bulgaria, where the company’s current focus is on rolling stock upgrades.

In September, Romanian railway infrastructure operator CFR signed a 2.72 billion lei ($655 million/560 million euro) contract for an upgrade of a railroad section with international consortium RailWorks, of which Alstom is part.

In Bulgaria, Alstom’s core competencies have been overshadowed by the focus on civil engineering works put in the rehabilitation projects.

“If and when these projects will require advanced technical solutions such as ERTMS Level 2 and high-performance catenary and power supply installations, we will do our best to offer competitive solutions,” Stanciu said.

The biggest constraints that Alstom faces in tenders held in Romania, Bulgaria and Moldova are related to incomplete or weak technical projects, problems with worksites as well as to authorities’ preference for the lowest price.

“First of all, I must say that I don’t think there is any problem at the very high level of decision making, but rather in the lower ranks, in the middle management of the institutions dealing with transport infrastructure,” Stanciu explained.

Thus, many investment projects are hastily put through auctions, depending on the national priorities or the European obligations – pressure regarding funding deadlines, for example, and generally, as a result the technical project is weak, incomplete, he said, adding that the expropriations are not done beforehand and the worksite may not be handed over upon signing of the contract which leads to further delays and increased costs.

Another problem is the focus on the lowest financial offer, in many cases. “It is a false impression that this encourages competitivity and efficiency. It rather encourages dishonest offers, with artificially lowered estimated costs only for the sake of winning and to the utter detriment of the quality of the project.”

“Infrastructure provides long-term solutions, for many generations, not temporary solutions, so quality should be the first priority, of course with a justified price, with the correct price,” Gabriel Stanciu concluded.

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