Siemens withdraws UK Crossrail bid

Siemens AG pulled out of bidding for 1 billion pound contract to build carriages for the London Crossrail project, giving the initiative to two rival bids that hope to sign the deal.

The company has led the line of suitors to win the contract and its withdrawal is a major boost to Bombardier and Hitachi, who are expected to build the trains in Britain if they win. If Siemens has won the company said it would build the trains in Germany.

In a similar deal in 2011 Bombardier opposed to a decision made by UK government for selecting Siemens to build trains for Thameslink, choosing to give the 1.6 million pound order to the German company rather than Bombardier, which would have built the trains in the UK. Bombardier, the Canadian owned firm based in Derby threatened last year to close its plant unless it won the contract. Bombardier cut 1,000 jobs in 2011 after the Thameslink deal was denied.

In recent bidding Siemens said it doesnt have the possibility to deliver a contract of that scale, supplying 600 carriages for the new line to connect east and west London. The official statement of the company explained: “Crossrail is a very large project and since first undertaking our initial assessment of capacity and deliver-ability, Siemens has won multiple additional orders,” a company statement said. “To pursue another project of this scale could impact our ability to deliver our current customer commitments.”

The company underlined the bidding process was “fair and diligent” and would not unfairly favor Bombardier over the other bidders – CAF of Spain and Hitachi of Japan.

The deal includes 73-mile Crossrail link that should join Heathrow airport to Canary Wharf due for completion in 2018. A final decision on who will win the deal worth more than 1 billion pound is expected in mid-2014.

Siemens AG share price is down almost 1% today piling on year to date loss of 8.55%. Companys shares trade for $100.17 per share.