CAF snatches multi-billion Belgian train contract under Alstom’s nose (update)

Belgian Trends-Tendances magazine reports that Spanish-listed train builder CAF has won a tender to build hundreds of trains for Belgian railroad company NMBS/SNCB. French player Alstom, which is firmly entrenched in Belgium, missed out on the contract worth more than 3 billion euros, even though it was cheaper than the Spanish competitor.

According to La Capital newspaper, the company is now exerting political pressure, and Thomas Dermine (PS), the mayor of Charleroi, is also calling for a political intervention in the Chamber of Representatives on the NMBS/SNCB decision.

Hundreds of MR30 railcars

“There has been a European tender based on technical and financial evaluation criteria. A ‘preferred bidder’ has now been appointed,” NMBS/SNCB responded to the magazine article. Specifically, the railroad company is now negotiating further with one party to reach a formal agreement. NMBS/SNCB is not yet saying who that party is, although it clearly looks like it is CAF.

The tender concerns MR30 railcars, which have an engine built in and thus do not have to be pulled by a locomotive. According to the tender published in late 2022, the intention is to sign a 12-year framework agreement to supply hundreds of railcars “for a fleet of up to 170,000 seats.”

The railcars will be used on IC, local, and suburban L and S connections. Incidentally, the tender included motor coaches that can run on batteries in places where the track is not yet electrified.

Difference of €107 million

NMBS/SNCB had previously said it wants to renew half of its fleet by 2032. According to Trends-Tendances, CAF proposed a contract worth 3.4 billion.

The Basque-based Construcciones y Auxiliary de Ferrocarriles (CAF) previously won orders from other transport companies in Belgium, such as some 146 streetcars for Flemish public transport company De Lijn and 47 M7 metro cars for Brussels public transport company MIVB/STIB.

According to the business newspaper L’Echo, Alstom, which thus missed out on the tender, is taking issue with the decision and has also sent a letter to Federal Mobility Minister Jean-Luc Crucke (Les Engagés).

According to the French manufacturer with Belgian divisions, their bid of 3.3 billion euros was cheaper than that of CAF and Germany’s Siemens (3.6 billion euros). The overall score was also similar, with 76.3% for CAF and 75.9% for Alstom.

Implications for Belgian branches?

Alstom employs 480 people at its Bruges plant, the former Bombardier, and more than 1,000 people in Charleroi, where research and development work is mainly done.

In December 2020, NMBS/SNCB still ordered 130 autonomously accessible carriages from Alstom, which then committed to having them—along with some 750 M7 carriages—delivered by the end of 2026. However, the company has since faced a 2.5-year delay in providing new trainsets for NMBS/SNCB.

In April 2023, Alstom also won a contract to equip 37 locomotives in the NMBS/SNCB fleet with the latest ETCS signaling technology.

Alstom talks about a “shocking decision” and calls for a “political reaction” because, according to the company, the NMBS/SNCB did not consider the local aspect of the offer. It also does not rule out that awarding the tender to CAF could harm the Bruges and Charleroi sites, writes L’Echo.

According to the newspaper Le Soir, the decision to consider CAF as a “preferred bidder” for the tender was taken unanimously by the board of directors of NMBS/SNCB. Moreover, there was no reason to question the procedure because the candidate companies for the tender were also anonymized.

Moreover, an anonymous witness of a member of the board of directors also says in the newspaper that “according to the management and the legal department, in the context of a European tender, it is not possible to establish a national criterion of employment,” something that specialized lawyers differ on, although they admit in the newspaper L’Echo that such a criterion is not evident.