SHANGHAI (Reuters) - State-backed China CNR Corporation is making a pitch to sell its high-speed trains to California, signaling China’s growing export ambitions for such technology after building the world’s longest network in just seven years.
It marks the first concrete attempt by China to sell high-speed locomotives abroad and establish itself as a credible rival to sector leaders such as Germany’s Siemens, Canada’s Bombardier and Japan’s Kawasaki.
CNR, its unit Tangshan Railway and U.S.-based SunGroup USA are submitting an expression of interest to California’s $68 billion high-speed rail project for a contract to supply up to 95 trains that can travel as fast as 354 kilometers per hour (221 miles per hour), SunGroup told Reuters.
“We believe that high-speed rail is something that China does very well, and it’s a product that we can export across the world,” SunGroup spokesman Jonathan Sun said in a phone interview, adding that SunGroup, CNR and Tangshan Railway had been working together for four years.
Manufacturers are expected to send in expressions of interest by Oct. 22 to the California High Speed Railway Authority, which will later issue formal requests for proposals. About a dozen firms from places such as Japan and Spain are expected to compete, it said.
California has been candid about its desire for Chinese investment in the 800-mile-long (1,287 kilometers) line from Los Angeles to San Francisco; U.S. media reports said governor Jerry Brown met Chinese rail officials in April last year, including those from Tangshan Railway, to discuss the project.
No estimates for the contract’s value have been published, but in its 2014 business plan the California High Speed Railway Authority estimated each trainset would cost $45 million, based on a purchase of 70 vehicles.
“We haven’t officially gone out to bid yet. This is us saying to the industry that we need trainsets. They have to meet these standards. We’re asking, ‘Are you interested in learning more, and do you think you could do this for us?’” said Lisa Marie Alley, deputy director of public affairs at the High-Speed Rail Authority.
China has made no secret of its desire to export its high-speed technology abroad, having built over 12,000 kilometers of track at home in less than a decade. CNR and CSR Corp are China’s largest locomotive makers, while China Railway Construction and China Railway Group build track.
The country has helped or indicated its interest to build thousands of kilometers of high-speed track in countries such as Turkey, Saudi Arabia and Venezuela, though it has yet to sell a high-speed train abroad. Premier Li Keqiang - dubbed by local media as China’s high-speed rail salesman - has led a drive to promote its technology in Thailand, Britain, Russia and India.
A Chinese consortium was the only competitor to present a bid for a tender to build a 210-km high-speed rail line in Mexico, the Mexican government said last week.
“The Chinese market right now is booming, and there’s a very high level of investment, but five, 10 years down the road will it still be at this level? We don’t know. So it makes sense for these companies to want to diversify their revenue streams,” Barclays analyst Yang Song said.
The sector’s image was, however, marred by a 2011 collision between two high-speed trains near Wenzhou in Zhejiang province that killed 40 people and was later blamed on design flaws.
Project details published on SunGroup’s website show the consortium is putting forward the CRH380BL train, a model used on the Beijing-Shanghai line, which can travel up to 380 kph.
Sun said an initial order would probably be about 18-20 trains and that they would open a factory to make the trains in California if they won the bid, as required by U.S. law.
The consortium also intends to bid for the next available contracts to build track sections of the line. A group led by Tutor Perini is building the first segment, while consortiums that include Dragados and Samsung are bidding for the next construction package.
“In the future we want to be involved in all aspects of the project,” Sun said. “Because by undertaking a package you can showcase the true value of the high-speed technology that China has created and manufactured.”
Additional Reporting by Robin Respaut in SAN FRANCISCO; Editing by Will Waterman