SNCF Chief Executive Anne-Marie Idrac said Wednesday that Bombardier had been chosen over Alstom and German rival Siemens AG for its "higher quality of service," following a rigorous selection process in which some 5,000 criteria were considered.

But the decision drew an immediate outcry from left-wing opposition parties and looked set to rekindle a long-running political debate on "economic patriotism," just as campaigning intensifies for presidential elections next April.

"To see the SNCF make a decision like this is a real shame. It's sad and even worrying," said Daniel Guerin, a Paris regional lawmaker with the left-wing Republican Citizens' Movement. Alstom was "perfectly competent" to supply the order, he added.

SNCF said it placed a firm $2.33 billion order with Bombardier for 172 trains, due to enter service on suburban Paris lines in 2009-2015, and an option for a further 200 that could more than double the final bill.

Much of the work should stay in France, Idrac said, where Bombardier already has a factory near the northern city of Valenciennes. STIF, the Paris regional rail authority that is funding part of the deal, said some of the work would likely be subcontracted to Alstom.

Alstom, which is back in the black after a series of government bailouts that saved it from bankruptcy, expressed "disappointment" and suggested it may consider challenging the decision.

"We will now examine the conditions under which this order was awarded and draw our own conclusions," Philippe Kasse, a spokesman for the Paris-based engineering company said. "We're not ruling anything out in response."

The French company has previously complained that it was excluded from bidding for a deal to supply equipment for the Montreal subway, eventually awarded to Bombardier at a price Alstom considers it could easily have beaten.

The SNCF deal is a boost to Bombardier just a day after it announced that its aerospace division is cutting 1,330 jobs in Montreal and Belfast, Northern Ireland, as it reduces production of its regional jets.

There was also consolation for Alstom on Wednesday, as the company won a deal to supply 500 freight locomotives to China in a joint venture with Chinese company Dantong. The contract, announced during a visit to China by French President Jacques Chirac, is worth more than $1.3 billion.

Alstom shares fell 0.6 percent to $91.21 in Paris. The decision to hand the SNCF rolling stock deal to Bombardier had been widely anticipated in recent weeks French press reports that cited unnamed sources.

See also:

Bombardier of Canada wins huge SNCF contract

International Herald Tribune: October 26, 2006
By Nicolas Johnson

PARIS Bombardier, the world's biggest train manufacturer, won a contract Wednesday worth as much as €2.7 billion to supply commuter trains for the Paris region. The Canadian company edged out its French competitor Alstom.

The award includes a firm order of €1.35 billion, or $1.69 billion, for 172 cars for the suburban network, plus options for another 200 cars, said Jean- Paul Boulet, a spokesman for the buyer, the French state rail company, Société Nationale des Chemins de Fer Français, or SNCF.

Losing the significant order is a defeat for Alstom, which was rescued by the French government from near bankruptcy in 2003. Alstom, the world's largest maker of high-speed trains, has supplied the French railroad's entire fleet of TGV, or high- speed, trains.

"Alstom's loss is a blow," said Pedro Alvès, who holds Alstom shares but no Bombardier stock among the assets he oversees for Spot Gestão Financeira in Braga, Portugal. "This is a free market, and Bombardier could very well have made a better offer."

The trains to be supplied by Bombardier would replace more than one- fourth of the Transilien network used around Paris by the SNCF.

"We're very happy to have been selected," the Bombardier executive vice president, André Navarri, said at a news conference in Paris, before presenting a prototype of the new train. Bombardier is based in Montreal.

It was the first time that companies had to submit a full-scale model as part of their bids, said Philippe Ogier, who led the project for Bombardier.

Bombardier's offer was 9 percent lower than that of Alstom, said an aide to the SNCF chairman, Anne-Marie Idrac.

Shares of Bombardier fell 17 cents to close at 3.94 Canadian dollars, or $3.50, in Toronto. Alstom shares fell 40 cents to close at €72.50 Wednesday in Paris.

European railroads ordered $22 billion in rolling stock, signaling equipment and products in the year ended Jan. 31, accounting for about three-quarters of global orders, Bombardier said.

Bombardier, Alstom, and Siemens of Germany, the three biggest train makers, bid against one another on some projects, bid together on others, and also subcontract work to one another.

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France's Alstom signs China rail, hydro deals

Reuters: Oct 26, 2006

BEIJING - French engineering firm Alstom signed rail and hydro-electric deals with China worth a combined 400 million euros ($505.5 million) to the French company.

The deals, signed in front of reporters by Alstom Chief Executive Patrick Kron during a state visit by French President Jacques Chirac, included the sale of 500 freight locomotives worth 300 million euros for Alstom, the company said.

Patrick Kron, Chairman of the Board, Chief Executive Officer, aged 52 started his career in the French Ministry of Industry between 1979 and 1984 and then held various positions within the Pechiney Group.

Kron told Reuters on Wednesday the deal, shared with Alstom's Chinese partner, Datong, was worth a total of more than a billion euros of which several hundred million euros would go to Alstom.

Kron also publicly signed a deal to sell hydroelectric equipment for three dams to China for 100 million euros.