China National Railway Group Co., Ltd. (hereinafter referred to as “China Railway Group”) recently launched the second high-speed EMU tender in 2020. On November 23, China Railway Materials Co., Ltd., a subsidiary of China Railway Group, announced the bidding for 58 Fuxing EMUs of 350 kilometers per hour, a total of 978 vehicles, and the total price of this bid is about 10 billion yuan.

The announcement shows that the bidding for the 350 km/h Fuxing EMU and the 350 km/h Fuxing Alpine EMU has 31 trains and 27 trains each, all of which are 8-car formations. According to the number of trains, the high-speed EMUs of China Railways can be divided into three types: 8-car group, 16-car group and 17-car group. The 8-car group is called standard train.

The procurement objects for the Fuxing EMU with a speed of 350 kilometers per hour are all subsidiaries of CRRC Co., Ltd. (hereinafter referred to as CRRC). There are 4 companies, namely CRRC Qingdao Sifang, CRRC Changchun, CRRC Tangshan and the joint venture Qingdao Sifang Bombardier (hereinafter referred to as “BST Company”).

This is the third bidding for high-speed EMUs by the National Railway Group in 2020. Prior to this, on June 28, China Railway Group tendered 137 Fuxing EMUs of 250 km/h , with a total price of about 16.1 billion yuan; September 28, bidding for 25 Fuxing Alpine EMUs of 350 km/h, with a total price of about 4.3 billion yuan; A total of 220 EMUs were purchased in the three tenders, with a total price of about 30.4 billion yuan.

Following the lower-than-expected bidding for high-speed EMUs in 2019, China National Railway Group’s equipment procurement continues to show a downturn in 2020. In addition to EMUs, nearly 400 locomotives and 30,000 wagon tendered in 2020, which is less than expected.

The reduction in the delivery of railway vehicle equipment directly affects CRRC’s operating performance. CRRC’s 2020 third-quarter report shows that CRRC’s revenue in the first three quarters of 2020 was 145.775 billion yuan, a year-on-year decrease of 5.66%; net profit was 6.793 billion yuan. Yuan, a year-on-year decrease of 19.25%, and the decrease in railway equipment revenue was the largest among all business segments, which was 56.304 billion yuan, a year-on-year decrease of 36.38%. Railway equipment business is the business segment that accounts for the highest proportion of CRRC’s operating income. The third quarterly report shows that railway equipment business accounted for 38.62% of the current total revenue.

According to data released by the China Railway Group on October 30, affected by the epidemic, the national railway passenger volume will be 1.486 billion passengers in the first three quarters of 2020, a sharp drop of 45.81% year-on-year, which is less than the 3.85 billion passenger volume target set at the beginning of the year. In the first three quarters, China Railway Group’s passenger transportation revenue was 163.269 billion yuan, a year-on-year decrease of 46.33%. Although the loss was reduced by 16.832 billion yuan from the first half of the year, the net loss was still 78.711 billion yuan.

According to data from the National Railway Administration, as of 2019, the country has 22,000 locomotives and 76,000 passenger cars, of which the 3665 are high speed EMUs. The number of railway freight cars nationwide is 878,000.

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