The Board of directors of the Belgian public railroad company NMBS/SNCB has finally chosen Spanish train builder CAF (Construcciones y Auxiliar de Ferrocarriles) as the preferred bidder for the supply of new train carriages.
It concerns a contract for up to 600 new train sets by 2034, for an estimated sum of between €1.7 billion and €3.4 billion. The first phase involves 180 railcars, capable of accommodating 54,000 seats.
The other candidates, France’s Alstom and Germany’s Siemens, could still appeal the decision, however.
CAF’s trains would consume less energy
CAF was not the cheapest candidate, but it scored best based on all criteria considered. For example, the Spanish company’s trains would consume less energy, resulting in a significant reduction in costs over the long run.
Competitor Alstom, among others, appealed to the Council of State against this decision. Following this, the latter decided to suspend the negotiations between NMBS/SNCB and CAF, as it deemed them not transparent enough.
NMBS/SNCB then did some recalculations, where CAF again came out on top. The politically colored board of directors has now decided to “reaffirm CAF as the preferred bidder, and this is based on a justification that takes into account the judgment of the Council of State,” and will further consult with CAF to reach a final agreement. However, the railroad company will ask CAF to make concrete the thought process of relying on local suppliers.
More local anchoring
The decision has once again drawn considerable criticism, both from unions and politicians. According to the trade unions, which had called for employment and production in their own country, the choice means the death knell for Alstom in Bruges.
“Besides the 600 employees at Alstom, numerous suppliers in the region will be affected, as the local anchoring goes back decades. Among others, suppliers Team Industries in Roeselare and Televic in Izegem are directly affected.”
The unions are also advocating for a debate and a revision of the law on public procurement. “Belgium is at the bottom of the European list for awarding public tenders. It is only natural that we opt for employment and production at home,” they say. Alstom itself will “take the time to evaluate the impact on Alstom and our options.”
‘EU procurement rules followed too strictly’
The government party CD&V also questions why Belgium offers so little protection to its own employment. “The consequences of the decision are heavy,” states MP Frank Demon. “No account was taken of the socio-economic consequences. However, Alstom was not only cheaper, but also a proven partner in our country,” says Demon, who is also an alderman in Bruges.
For your info: CAF previously supplied streetcars to De Lijn (Flanders) and MIVB/STIB (Brussels) and was part of the Tram’Ardent consortium for the streetcar in Liège (Wallonia).
According to Demon, European procurement rules were followed too strictly. And he emphasizes that when spending public money, the social and economic consequences must also be considered.
‘Irresponsible choice’
The reaction of the PVDA is along the same lines: “It is incomprehensible and downright scandalous that a Belgian public company chooses to sacrifice hundreds of local jobs, while all the necessary expertise is present here. Employees and their families will pay the heavy price for this irresponsible choice,” the opposition party says.
Vlaams Belang considers the intention of NMBS/SNCB to ask CAF to produce part of the order in Belgium “a mere sop to the local employees of Alstom, because there is no guarantee of such local production.” For the far-right party, “the number of local jobs at stake as a result is far too great for this NMBS/SNCB decision to be taken lightly,” and it will demand the necessary clarification in the relevant parliamentary committee.
No cooperation with the Israeli occupation
The plus-minus only positive reaction from a political perspective comes from Groen, although it strikes at a different intention on the part of NMBS/SNCB. The railroad company is now explicitly asking CAF to confirm that its operations respect international law and human rights, following criticism that it would cooperate with Israeli occupations. “Investment in our public transport, please, but not if there is blood on it,” Groen says.
“Only when CAF has completely ceased its activities in the illegal colonies can we proceed to the actual order. If that does not happen, then CAF is committing a breach of word, and the order cannot proceed.”
Minister hopes for jobs and subcontracting in Belgium
Finally, Federal Minister of Mobility Jean-Luc Crucke (Les Engagés) expects that NMBS/SNCB’s order with CAF will also effectively lead to job creation and subcontracting opportunities in Belgium. Crucke first stresses that this is an autonomous decision by NMBS/SNCB and that the railroad company has followed the European procurement rules, leaving no room for “national preference.”
But, he adds, “I expect this contract to benefit the Belgian economy in terms of employment, subcontracting, and industrial innovation. The negotiations should now focus on that direction.”The first train is scheduled to be delivered in 2029. “Any delay would jeopardize our strategic goal of increasing the rail share by 30% by 2032,” Crucke added.
The order also includes battery trains that will eventually replace current diesel trains.
Alstom’s order book is more than well filled
One more thing: Alstom’s unions in Bruges fear that missing out on the billion-dollar contract could be the death knell for their company but the French rolling-stock maker did post a 2.8% increase in sales to 4.5 billion euros in the first quarter of this fiscal year and saw its orders rise by 11.8% to more than 4 billion euros, compared to 3.7 billion euros during the same period in the previous fiscal year.
The company also confirms its targets for organic sales growth of 3 to 5% for this year. And despite an expected dip into the red by minus a billion euros for the first half of the year, the cash position for the whole year should turn positive again by between 200 and 400 million euros.
Europe accounts for 85% of the orders received. Orders include a 1.7 billion euros contract to supply 96 RER NG trains in the Ile -de-France region and one of around 600 million euros to supply 35 interregional e-trains in Bulgaria. Alstom also won a 3.6 billion euro contract last year to provide regional trains in northwest Germany.
In addition to plants in France and Belgium, Alstom has production sites in Germany, Spain, Italy, Poland, India, China (through joint ventures), the United States, Brazil, Mexico, Canada, the United Kingdom, Kazakhstan, and South Africa, among others, for the construction of trains and train components.
