CNR lobs massive charge against Israel after losing Electric Loco Tender to Bombardier

CNR didn’t meet Technical Requirements. We have sent China’s CNR a two-line letter disqualifying it from a huge locomotives tender; says Israel Railways.  CNR cites it is disrespectful.

cnr elec locoChinese railway company CNR has protested a decision to award a tender for locomotives to Bombardier in a letter sent Sunday to Israel Railways. The firm claimed the results of the tender were predetermined and hurt the “public’s interest” and demanded Israel Railways avoided completing the tender until CNR could examine the materials and “exhaust its procedural rights.”

Last week, Israel Railways announced that Canadian transportation giant Bombardier won a tender for the procurement of electric locomotives one of the largest in the electrification project undertaken by Israel. The total cost of the infrastructure overhaul is estimated at NIS 13.7 billion, while the current tender, for 62 electric engine cars with an option for 32 more, is believed to be worth NIS 1 billion. Four companies bid on the tender: Chinese firms CNR and CSR, French Co., Alstom and Bombardier. In recent months, CNR and CSR merged, leading Bombardier and Alstom to threaten legal action if the Chinese bids weren’t disqualified and they were.

Now, according to CNR, the tender process was tailor-made to suit Bombardier. The company cited several charges, including that firms which produced products according to European regulations received higher marks and the team in charge of the electrification project was composed entirely of advisors to Germany’s national rail company, Deutsche Bahn, which is a client of Bombardier.

Therefore CNR demands to receive all documents relating to the tender, including the bids, internal communications from the tender committee, the scores given to the other bidders, information relevant to the scoring of the bids, and all the expert opinions both internal and external presented to the committee.

In response, Israel Railways said it “offered all bidders an equal opportunity. The tenders committee made its decision based on practical considerations alone, according to the law.”

Israel Railways sent China’s CNR a two-line letter disqualifying it from the tender

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.

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.”