CSR, GE May Bid on US High-Speed Rail Projects Amid Obama's Push

Strategic Insights -

China's largest rail vehicle maker CSR Corp. and partner General Electric Co. are considering a joint bid to build high-speed train lines in California and Florida, following U.S. President Barack Obama's efforts to increase investment in railways. The potential collaboration may face competition from other train manufacturers, including Bombardier Inc., Alstom SA, and East Japan Railway Co. China has also expressed its intention to provide financing for a planned California high-speed line, with an estimated cost of at least $40 billion.

Key Takeaways:

  • CSR and GE are exploring a joint bid to build high-speed train lines in California and Florida, with potential projects on the east coast.
  • The companies aim to finalize their collaboration within the next three years and decide which lines to bid on.
  • CSR chairman Zhao Xiaogang stated that bidding for such projects can help give the company an international profile and boost its image as a global company.
  • CSR seeks to increase overseas sales to 20% of total revenue by 2015, up from the current 8%.
  • The company expects total sales to reach 150 billion yuan ($23 billion) by 2015.
  • CSR is also bidding for projects in China, where the nation plans to double its high-speed passenger network to approximately 16,000 kilometres by 2020.
  • The CSR-GE partnership may support about 3,500 jobs in the US, with final assembly taking place in the country.
  • California plans to build a high-speed rail network connecting Sacramento and San Francisco to Los Angeles and San Diego.

Statistics:

  • Estimated cost of the California high-speed line: at least $40 billion
  • Target overseas sales revenue for CSR by 2015: 20% of total revenue
  • Expected total sales for CSR by 2015: 150 billion yuan ($23 billion)

Sources:

  • Bloomberg News
  • U.S. President Barack Obama
  • CSR Corp. chairman Zhao Xiaogang
  • Shao Renqiang, CSR secretary
  • Stanley Yan, Shanghai-based analyst at Masterlink Securities Corp.
  • General Electric Co.
  • Bombardier Inc.
  • Alstom SA
  • East Japan Railway Co.
  • Toronto Star (2010)