The bid by Chinese railway equipment manufacturer China North Railway (CNR) in the huge Israel Railways locomotives tender has been disqualified, according to a letter sent yesterday by Israel Railways to CNR management in China. The letter said that CNR's bid had been disqualified because it failed to meet the technical requirements of the tender. According to CNR, however, the perplexing letter was very short and provided no explanations, giving rise to suspicions that the bid had been disqualified because CNR had merged with another participant in the tender. The tender, which involves the supply of 62 electric locomotives, with an option for 16 more, is one of the largest procurement tenders by Israel Railways in recent years.
"Globes" revealed yesterday that CNR's bid had been disqualified. The tender is estimated at €270 million (NIS 1.1 billion). Senior industry sources said that CNR had been disqualified because of its merger with China South Railway (CSR), which is also competing in the tender. The sources said that the two companies' merger gave rise to concern about price collusion between them. They added that by disqualifying one of the bids, Israel Railways was trying to avoid a future lawsuit by the other two bidders in the tender, French company Alstom and Canadian company Bombardier. These companies have already threatened to seek court intervention if the Chinese bids are not disqualified. CNR said that Israel Railways' laconic letter was disrespectful and non-serious. CNR added that the letter only added to suspicions that the technical disqualification was just an excuse to disqualify it, and was actually motivated by the merger with CSR. The China Lines company, which is representing CNR in the tender, said, "A two-line official letter leaked before it was sent raises questions about the motives behind it. We will demand and receive a professional, serious, and respectful explanation of the reason why the world's largest locomotive company was disqualified. Otherwise, we will have to act using all the means at our disposal."
Israel Railways said, "The company does not comment on matters being discussed by the tenders committee."
Published by Globes [online], Israel business news - www.globes-online.com - on July 16, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015