China made trains may run on UK rail in 2012

08:43, January 20, 2011      

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China CNR Corp and CSR Corp, the nation's two largest trainmakers, surged by the daily limit in Shanghai trading after the South China Morning Post said that the companies were close to winning their first UK orders.

CNR jumped 10 percent to 8.77 yuan ($1.33), while CSR rose by the same amount to 8.66 yuan on Wednesday.

The trainmakers are in final negotiations for four deals worth 500 million pounds ($800 million), including a 200 million pounds contract with Alliance Rail Holdings Ltd, the Hong Kong-based newspaper said, citing the trainmakers' European representative and Alliance. The contracts would be the first for Chinese trainmakers in Western Europe, it said.

"This would help increase their global market share as CNR and CSR seek to expand outside China," said Han Weiqi, an analyst at CSC International Holdings Ltd in Shanghai.

CSR is also set to sign letters of intent for ventures with General Electric Co (GE) this week as China President Hu Jintao visits the United States. The deals may bring in $1.4 billion and add or preserve 2,000 US jobs, including an order for 500 exported locomotive kits and related services valued at $350 million, GE Transportation Chief Executive Officer Lorenzo Simonelli said in an interview.

Chinese trains may enter service in Western Europe in 2012, David Shipley, managing director of CSRE Ltd, the European partner of CSR and CNR, said in the South China Morning Post report. Deals may hinge on winning financing from Chinese banks, he said.

Alliance is in talks to lease 17 Polaris trains from CSR, the report said, citing Managing Director Ian Yeowart. The rail company plans to offer services between northern England and London from 2013, according to its website.

The Polaris train deal is pending approval from the UK rail regulator and from Alliance backer Arriva Group, a unit of Deutsche Bahn AG, according to the South China Morning Post report.

Shipley declined to comment on the other three possible UK deals, according to the report.

Source: China Daily/Agencies
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