Bombardier Inc and the Power Corporation of Canada have signed a joint venture agreement to build passenger coaches in China. The deal follows a memorandum of understanding signed with the Chinese government in November 1997.

The local partner is Sifang Locomotive & Rolling Stock Works in Qingdao, part of the state-owned Locomotive & Rolling Stock Industrial Corp (Loric). Sifang will have a 50% stake in the JV, with Bombardier and Power Corp holding the other 50% ’together and equally’. The JV will invest C$110m in a 50000 m2 workshop at the existing Sifang plant at Jihongtan near Qingdao in Shandong province.

To support the joint venture, Chinese Railways has ordered an initial build of 300 high-quality inter-city coaches, with an option for a further 200. Following the negotiation of final contract terms, production is expected to get under way in mid-1999. Total value of the order is put at C$550m.

Bombardier Transportation’s President & Chief Operating Officer Jean-Yves Leblanc said that the move was a ’significant step’ in expanding the group’s operations in the region. As well as inter-city stock, the Sifang venture is intended to produce suburban stock, EMUs, double-deck coaches and metro cars for domestic use and export, harnessing established Bombardier designs to local conditions. Employment at the plant is expected to rise to 1300 in around three years.

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