Siemens gets $1 billion Chinese train order

FRANKFURT -- German industrial conglomerate Siemens AG said Friday it had received a $1 billion order for its share of a contract to deliver 100 high-speed trains to China.

The Munich-based company said it had signed a deal with Tangshan Railway Vehicles Co. Ltd., Changchun Railway Vehicles Co. Ltd., and the Chinese Academy of Railways to supply components such as electrical equipment and chassis to the project.

Siemens has area facilities in Buffalo Grove, Deerfield, Chicago, Hoffman Estates, Schaumburg, Glen Ellyn, Elk Grove, Mundelein, Oak Brook, Rolling Meadows, and Wood Dale

The order includes the first trains for the new Beijing-Shanghai route, which are to be put into service at the end of 2010, Siemens said. Trains for the Wuhan and Guangzhou and Wuhan and Shijazhuang routes are to be supplied later.

Siemens said its part of the production will take place in Krefeld-Uerdingen and Nuremberg, Germany; Graz, Austria; and Shanghai, Tianjin and Jinan, China.

Assembly of 70 of the trains will take place in Tangshan, China, while 30 will be assembled in Changchun, China.

Siemens said the order represents China's further commitment to investing in its national rail network.

"This new order from China is especially gratifying to us because together we will be supplying the first vehicles for the Beijing-Shanghai route, the most important high-speed line in the country," said Hans-Joerg Grundmann, Siemens' mobility division's chief executive in a statement.

"Moreover, we will strengthen the long-term cooperation with our Chinese partners in a high-speed market that, in future, will be the largest in the world," Grundmann said.

The company said the trains for the order announced Friday will be based on its CRH 3 Velaro platform, at 16 cars with a capacity of 1,060 passengers. Siemens said the new trains will be able to achieve an operating speed of 217 mph (350 km/h) and will be able to complete the 819 mile (1,318 km) Beijing-Shanghai run in four hours.

A previous order placed by the Chinese Ministry of Railways four years ago was for 60 trains of the type CRH 3 from Siemens and Tangshan Railway Vehicles. Eleven of those trains have been in service between Beijing and Tianjin since the 2008 Olympic Games and boast a degree of punctuality of over 99 percent, according to Siemens.

The news pushed shares of Siemens nearly 1 percent higher to euro43.95 in Frankfurt afternoon trading.