Jan.23 (NBD) --The state-run Metropolitan Transportation Authority (MTA) of the U.S. is very close to signing a deal that will thoroughly modernize its aging fleet of subway cars. Though the agency’s board has yet to approve the deal, the MTA is planning to spend 4 billion U.S. dollars to acquire this large, new set of subway cars.

Japanese firm, Kawasaki, is expected to secure the order. China's rail car maker CRRC was also reported to have jointly run the bid with Bombardier Transportation by Reuters.

Kawasaki told NBD on Monday that the company is working on the deal related to New York subway cars, yet no order has been formally made so far.

Fierce bidding war for New York subway

As an attractive metropolis, New York is densely populated. But its subway system is increasingly dysfunctional and unreliable. In the summer of 2017, a subway car was stuck in the tunnel for an hour without air conditioner. Derailments also happen there. 

The agency that runs New York City’s troubled subway said on Friday that it plans to spend close to 4 billion U.S. dollars to buy over a thousand new train cars to modernize an aging fleet, a major investment meant to help remedy the delays and breakdowns that plague the transporation system.

The first cars, which will be manufactured under a contract between the Metropolitan Transportation Authority and the Japanese company, Kawasaki, are scheduled to be delivered in July 2020.

NBD noticed that on the website of the MTA, the contract consists of a 1.4-billion-U.S.-dollar base order for 535 R211 subway cars, with options for 1,077 additional cars. Compared to R46 models, R211 will have wider doors with LED displayers. Holders, lights and slogans will all be improved.

According the reports of Routers in September 2017, Kawasaki rival Bombardier also bided for the project but was dropped from consideration due to past delivery delays.

If Kawasaki lands this R211 order, that apparently would be the manufacturer's largest single order it earned from the MTA.

CRRC expanding footprint in US market

It was reported that CRRC had particupated in the bidding of the MTA project.

However, citing an employee at CRRC, Caixin reported in October 2017 that CRRC was dropped out from the bidding.

On 22 January, NBD tried to reach CRRC as an investor, but CRRC replied that there hasn't been any information yet. So far, the NewYork subway car order is the largest one it has bid for. If CRRC could land the order, it would be a new landmark.

CRRC obtained its first U.S. contract in 2014, a 566-million-U.S.-dollar deal with the Massachusetts Bay Transportation Authority (MBTA) for 284 subway cars, which will be delivered by 2023. In 2016, CRRC Qingdao Sifang won 1.3-billion-U.S.-dollar order for 846 Chicago railcars, its largest order ever at the time. In March 2017, CRRC MA, its Massachusetts-based unit gained LA metro contract worth up to 647 million U.S. dollars.

According to company filings of CRRC, the value of overseas contract made in 2016 increased 40 percent year on year.

Sun Zhang, a professor of Institute of Rail Transit, TongJi University told NBD that ancient saying goes "Some battles you win, some battles you lose." If the railway maker failed to land the order due to technological reasons, then it has to make itself more competitive. 

Email: tanyuhan@nbd.com.cn