Hitachi, MHI partner on Thai railway bid

Hitachi Ltd. and Mitsubishi Heavy Industries Ltd. will jointly bid next month for a contract to build an elevated railroad in Bangkok, it has been learned.

The two companies are also considering integrating their overseas rail businesses after the joint bid, sources said. Analysts said such cooperation between Japanese firms could improve their competitiveness in bidding for rail systems abroad.

Hitachi and MHI will take part in the tender to construct a line in Thailand‘s elevated railroad system that would connect central Bangkok and the northern part of the city.

The line, which will be 26 kilometers long and have eight stations, is scheduled to begin operating in 2014 and cost 350 billion to build.

Since the Japan International Cooperation Agency has extended a yen-denominated loan to the Thai government for railway construction, the Hitachi-MHI consortium is believed to be favored to win the contract.

The two companies signed a partnership agreement on international railroad construction in June, but this will be the first time for them to make a joint bid.

Several emerging economies are looking to construct railroad systems quickly to deal with surging population increases and environmental problems.

However, Siemens AG of Germany, Alstom Transport of France and Bombardier Transportation of Canada have led the way in global rail contracts, winning a combined 56 percent of orders and keeping Japanese companies on the backfoot.

The two companies decided an alliance would help them compete with foreign rivals by taking advantage of Hitachi‘s ability to make quality rail cars and signal systems, and MHI’s track-making know-how.

Source: http://www.tradingmarkets.com/news/stock-alert/hit_hitachi-mhi-partner-on-thai-railway-bid-1393876.html