Bombardier consortium named preferred bidder for $3.4 bln Egypt monorail


Adds details from UK trade minister, background

CAIRO, May 28 (Reuters) - Bombardier Inc BBDb.TO said its consortium has been named as Egypt's preferred bidder for a 3 billion euro ($3.4 billion) contract to build a monorail link out of Cairo, part a flagship project of President Abdel Fattah al-Sisi.

If confirmed, it would be the largest project in recent years for Bombardier's rail division, the group's biggest business, which has recently faced challenges, and it would likely create jobs in the UK where the Canadian company builds rolling stock.

Bombardier said in a statement that Bombardier Transportation had teamed up with two Egyptian companies - Orascom Construction OC.DI and the Arab Contractors - to bid for the contract to build a 54-kilometre (34-mile) monorail system connecting a new capital city with eastern Cairo. The contract also includes construction of a second, 42-kilometre line linking 6th October City with Giza.

The new capital is being built in the desert east of Cairo. Its construction has been delayed amid financing concerns but it is a top priority for Sisi.

British Trade Minister Liam Fox said the deal would generate jobs in Britain and that work could start later this year.

"We're now getting to the financing elements of the agreement," he said in an interview during a visit to Cairo.

Bombardier are "keen to get working if they can in the third quarter of this year. It's quite a tall order but it reflects I think their level of ambition for this project," he said.

"I think the government here wants to see quick results, I think the company want to see quick results."

The monorail's design and build contract has a potential value of 1.2 billion euros for Bombardier Transportation, while a 30-year operations and maintenance deal has a potential value of about 1.1 billion euros, the company said.

Egyptian officials have said they expect the first civil servants to start working from the new capital in mid-2020.

Bombardier's rail division has seen recent delivery delays and production problems on a handful of long-term projects, forcing the Canadian company to cut its first-quarter and full-year revenue targets for the division.

Earlier this month, the Canadian company said it would merge its corporate and regional jet units, besides selling off two aerostructures operations.

Orascom, an engineering and building business, is controlled by Egypt’s prominent Sawiris family. Arab Contractors is a major state-controlled construction firm.

($1 = 0.8938 euros)

(Reporting by Aidan Lewis in Cairo, Arathy S Nair in Bengaluru and Allison Lampert in Montreal; Editing by Susan Fenton)

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