Bombardier (TSX: BBD) is considering petitioning the court to void Siemens’s (NYSE: SI; XETRA: SIE) win in a rolling stock tender by Israel Railways. The value of the tender is likely to amount to €900 million. Bombardier recently asked Israel Railways to furnish it with documents used by the tenders committee.
The tenders committee declared Siemens the winner last week. Israel Railways initially ordered 86 railway cars at a cost of €120 million. Under the contract, Israel Railways can order 585 more cars.
Bombardier is questioning the tender’s validity. The company notes, “There is a feeling that things were not done cleanly. The tender took 18 months, and we must examine the tender documents well, in view of the enormous financial consequences.”
Another tender loser, Alstom (NYSE, LSE: ALS), also plans to demand the tender documents in order to examine the process.
Bombardier Transportation Israel general manager Yossi Deskal said that Bombardier had asked to examine the document, and would consider additional steps according to its findings. Another source said that Bombardier had a very uneasy feeling. The source added that it should be verified whether or not the tender had been fixed in advanced.
Israel Railways dismisses the complaints. General manager Ofer Linchevski said that Israel Railways invited all the losers in the tender to see the material. He said, “We conducted a proper and transparent process ,and I assume that eventually, after an exhaustive examination, there will be no court petition.”
Israel Railways said that Siemens’s bid had been substantially cheaper than the other bids.
Published by Globes [online] - www.globes.co.il - on January 16, 2006