Metrorex, the subway transportation operator in Bucharest yesterday signed a 240 million-euro deal with French group Alstom, outsourcing maintenance services for the subway cars for fifteen years.
“Transferring repair and maintenance services to a specialised company is common practice in Europe. We hope to see Metrorex costs go down as a result of this contract, considering the agreement covers the maintenance of the entire stock, i.e. the 251 cars made by Astra Arad and the 18 new trains made by Bombardier,” Marius Lapadat, Metrorex general manager stated.
The agreement with Alstom was signed during President Ion Iliescu’s visit to France, with the ceremony attended by French Premier Jean-Pierre Raffarin.
The operations of the French company will be conducted in the three maintenance depots of Metrorex and will involve the already existing staff. “The French company will also make a series of investments for upgrading and retooling the train maintenance facilities,” Lapadat added.
The investments will target among others, installing a top-notch IT system, bringing the depots up to the environment protection standards in force, as well as holding professional training courses on safety, production quality and management.
The contract will start being run in January 2004. The Metrorex representative says the money the contract needs will be obtained from supplier loans raised by Alstom and secured by the Transports Ministry and Metrorex.
“This long-term contract is very important to us, as it allows us to improve our expertise in subway transportation maintenance,” said Patrick Kron, Alstom’s CEO and chairman of the board.
Alstom was chosen for this project based on an international contest, with bidders including Bombardier and Siemens.
The French group is going through a difficult time, having managed to avoid collapse by means of a refinancing deal worth 2.8bn euros concluded with the French State, with the creditors and shareholders. This programme, however, was halted by the officials in Brussels, so that the European Commission, the French Government and Alstom’s management drafted a new rescue plan worth 3.2bn euros. President Pierre Bilger left Alstom in March 2003, and the management announced an extensive restructuring programme that caused unrest among investors and cancelled nearly 50% of the price of the shares in a single trading session.
The failure of the restructuring measures made the French Government intervene and prevent a collapse considered to be “a social and industrial disaster” that would have affected about 110,000 employees.
The outsourcing of certain Metrorex services is part of the company’s cost-cutting strategy. The transportation service provider in Bucharest totalled 6,349bn ROL (203 million euro) debts at the end of last year, as well as 5.7 million euro (179bn ROL) losses at a 1,314bn ROL (42 million euro) turnover, as shown in the latest financial statement filed with the Finance Ministry.