Ailing Alstom wins Shanghai subway deal

12th October 2004, Comments 0 comments

SHANGHAI, Oct 12 (AFP) - French industrial giant Alstom signed an agreement Tuesday to supply 16 complete subway trains to Shanghai for some EUR 130 million (USD 160 million) in another deal reached during French President Jacques Chirac's visit to China.

SHANGHAI, Oct 12 (AFP) - French industrial giant Alstom signed an agreement Tuesday to supply 16 complete subway trains to Shanghai for some EUR 130 million (USD 160 million) in another deal reached during French President Jacques Chirac's visit to China.  

The agreement was signed Tuesday between Alstom and Shentong, a Chinese enterprise based in the eastern financial hub Shanghai and announced by French Transport Minister Gilles de Robien.  

Chirac himself witnessed the signing ceremony after arriving by subway at the Yanan Street metro station where the ceremony was held.  

The French president has been on a four-day visit largely aimed at securing business and trade deals with China while also kicking off a high-profile cultural media campaign known as the "Year in France" in China.  

During the Beijing part of his trip, Chirac met Chinese President Hu Jintao and oversaw the signing of a series of business deals valued at several billion dollars.  

Alstom alone signed contracts of up to EUR 1.5 billion, including deals to provide locomotives and trains to China worth up to EUR 1.0 billion (USD 1.23 billion).  

In Shanghai, the company hopes to participate in the supply of up to 500 subway cars that will be needed on the seven to eight subway lines that the city hopes to have built by 2008, company officials said.  

"Alstom sold its first machinery to China 50 years ago and then set up its first joint venture in China 25 years ago," said chief-executive-officer Patrick Kron.  

"We are here in China for the long term."   Shanghai's subway system is set to expand from the present 124 kilometres (75 miles) to 350 kilometres in 2010 and 800 kilometres in 2020.  

Tuesday's deal will include 128 subway cars of which Alstom itself will have orders valued at 30 million, while associate Satco and Puzhen, based in Nanjing, will take the rest, sources close to the deal said.  

The 16 trains will be used on the extension of Shanghai's number one metro line, they said.  

Besides trains and subway cars, the company which has had a series of financial problems in recent years, also signed a letter of intent for the sale of EUR 400 million of hydro-electric turbine and pumping equipment to the provinces of Hubei, Henan and Guangdong.  

The Shanghai portion of Chirac's trip has been mainly geared at forging a French presence in China's booming hi-tech industries, with the French president presiding over the establishment of a joint bio-medical research project between France's Pasteur Institute and the China Academy of Sciences.  

Before arriving at the metro signing ceremony, Chirac also visited the Shanghai offices of the French video game maker Ubisoft, which employs some 300 people in China, including 30 expatriates.  

Ubisoft, which earned EUR 508 million in profits in 2003, became the first French video game developer in China in 2004 and has enjoyed strong sales with its Ray Man and Splinter Cell games.

 

© AFP

Subject: French News

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