Siemens assesses partnership with the Chinese for bullet train

Companies interested in taking part in the tender process for the high-speed train (HST) have already started seeking partnerships and consortiums, with an eye on the Invitation to Bid which should come out next week and whose auction is planned for November. This is the case of industrial giant Siemens, looking into a partnership with a Chinese group, which has already been the case in other countries. Trends Engenharia is seeking an agreement with large Brazilian construction firms and hopes to win a slice of the business valued at R$ 33.1 billion.

As the HST process becomes clearer, and after the process has been cleared by the Federal Audit Court (Tribunal de Contas da União – TCU), the Director-General of the National Land Transport Agency (Agência Nacional de Transportes Terrestres – ANTT), Bernardo Figueiredo, said yesterday that the tender for the project could take place by the end of November this year. This means that the railway giant Siemens is already starting to forge strong partnerships to enter into the auction. The company has not confirmed talks with the Chinese group, but has indeed helped to construct the first high-speed train in China, and between these companies there is a good relationship as described by the director of Siemens Mobility, Paulo Alvarenga, on commenting the issue. Asked about the partnership, he did not rule it out; hence, Siemens shall be establishing a solid consortium with one of the leading players in this business segment.

According to Alvarenga, it is impossible to enter a project like this alone, as exposure to risk is very high. “The HST project is of great interest to Siemens, we have participated in this high-speed market with significant presence over the last few years, so much so that, if we consider the most recent projects that have been devised, we have a significant majority, due to the fact that out of the seven projects which have been carried out in the world, five are ours. And, surely, we wish to uphold this track record of success which we have obtained in recent years”, he confirmed exclusively to DCI.

However, the director also pointed out that great care is needed up to the moment when the tender is launched, as it is possible that the items to appear in the document are not aligned with company interests. Mr Alvarenga highlighted that Siemens is every interested in this project and, with the large capacity of execution and also the necessary technology, together with the factories of the company in Brazil, the added value becomes very high.

In relation to the transfer of technology to Brazil and also the production of trains in the country, Paulo Alvarenga said that, similar to other projects throughout the world, the trains shall be constructed in Brazil; he mentioned, however, the fact that there is not sufficient scale to create the whole value chain, and for this reason some components for the train shall be brought in from Germany. In HSTs, the main question is indeed that of scale. In this project, we are talking about 42 trains, and this does not warrant assembling the whole value chain here in Brazil. However, it does allow a certain degree of nationalization.

With the clear challenges of infrastructure of the project in some regions where the train shall pass, for the director at Siemens the main issue shall be that of getting the project done within the set time frame and with adequate costs. Mr Alvarenga said that the studies for the HST are very superficial, and that the company winning the tender shall have to start the studies from scratch and this shall be complicated, as there is no solid base as a foundation. The studies that have already been carried out are almost non-existent, the information that appears is almost a Google map with a straight line showing where the train shall pass. The infrastructure of this project is very complicated and becomes a major engineering challenge, he says.

Koreans

In the middle of this process involving companies, projects and also the Government, Trends Engenharia, which participates and also gives local support to a Korean group of investors in the HST project since 2006, says they have clinched important partnerships with large companies of the construction segment, but no names have been mentioned as this is a confidential issue. All they did was confirm that some of these companies were previously involved in the tender of the Belo Monte unit.

For the President of Trends Engenharia, Paulo Benites, the company, in partnership with the Korean group, is already studying the route of the HST in Brazil, ever since 2007, and stresses that there is a strong connection between the technology to be used in the project and the specific conditions of the reference route. The project has a strong relationship between technology and the specific conditions of this route, and hence it is good to know that the Government and the Federal Audit Court were of the understanding that it would not be possible to implement a very strict project, because, if this was done, the project would be conditioned to the use of one single type of technology, he said.

In relation to the decision made by the Federal Audit Court, to bring down the value of public financing to 60% of the total value of the project and also to reduce the fare cap, Mr Benites did not approve of the decision, stressing that one of the best parts of the project was its financial structure. The Government passes the heaviest risks on to the private sector. The parameters have got worse, the fare is lower and the investments are tighter. We need to redo calculations.

Fonte: DCI