CRRC Qingdao Sifang Locomotive has withdrawn from a public tender for a Bulgarian train contract, which had prompted a European Commission (EC) investigation into distortion of the market, after the Chinese manufacturer was accused of under-cutting European-based firms.
The tender launched by the Bulgarian Ministry of Transport concerned the purchase of 20 electric push-pull trains, plus 15 years maintenance and related staff training. The estimated value of the contract is Lev 1.2bn ($US 660m).
CRRC reportedly submitted a bid worth less than half of that submitted by Talgo, Spain, and 46.7% below Bulgarian State Railways’ (BDZ) estimate. The Bulgarian government subsequently referred the bid to the EC under the Foreign Subsidies Regulation (FSR), which came into effect in July 2023.
The EC alleged that CRRC Qingdao Sifang Locomotive was able to make such a low offer because the company received €1.75bn in state subsidies, which it did not declare.
Under the FSR, companies must notify their public procurement tenders in the European Union when the estimated value of the contract exceeds €250m, and when the company was granted at least €4m in foreign financial contributions from at least one third country in the three years prior to notification.
As a result of CRRC’s withdrawal, the EC has closed the investigation.
“In just a few weeks, our first investigation under the Foreign Subsidies Regulation has already yielded results,” says Mr Thierry Breton, European commissioner for the internal market. “Our single market is open for firms that are truly competitive and play fair. We will continue to take all necessary measures to preserve Europe’s economic security and competitiveness – with assertiveness and speed.”
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