By Nathalie Boschat and Gabriele Parussini
Of DOW JONES NEWSWIRES
AIX-EN-PROVENCE -(Dow Jones)- Alstom Transport (ALO.FR) is the preferred bidder to supply state-owned Societe Nationale des Chemins de Fer with as many as 1,000 regional trains, Chief Executive Philippe Mellier told Dow Jones Newswires in an interview.
"We are in exclusive negotiations for this contract, which including options could reach as many as 1,000 trains over ten years," Mellier said on the sidelines of an economist conference in Aix-en-Provence, adding that the contract should be finalized by September.
Alstom was chosen over Canada's Bombardier (BBD.AT) by SNCF and French regional authorities to overhaul the country's local transport network. The company should provide around a hundred trains in the first firm tranche of the order.
Mellier denied press reports that the total order amounts to EUR15 billion, adding that it should be less. "EUR15 billion for 1,000 trains would be far too expensive," he said. Still, without giving a detailed amount, he confirmed that "it would be a gigantic contract."
While the SNCF, which still has a de facto monopoly of passenger transport in France, is the main contractor, the details, including quantities and prices, need to be approved by the country's regional councils.
Alstom Transport's business is proving resilient in the current environment, Mellier said.
"Our backlog is still filling up...I am not telling you that our revenue is going to fall this year," he said. He declined to be more specific on the division's financial targets for the year.
Thanks to stimulus plans, with governments focus shifting to investment in public infrastructure, Alstom Transport's backlog is filling up, and, at around EUR20 billion, it represents more than three times the yearly sales of EUR6 billion.
"We have a very good visibility for the coming years," Mellier said. "The crisis would have to go on for a long time before we are affected."
He noted that the economic downturn is weighing on freight transport, while sparing passenger trains, by far Alstom Transport's largest market.
Mellier added that Alstom Transport was also benefiting from a rise in maintenance contracts, as some clients put off investment in new rolling stock and revamped their old trains.
-By Nathalie Boschat and Gabriele Parussini, Dow Jones Newswires; +33 6 1139 0445;
nathalie.boschat@dowjones.com; gabriele. parussini@dowjones.com
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Publié le 04 Juillet 2009 Copyright © 2009 Dowjones