The company states that it will clearly fulfill the conditions that would be written in the contract for the supply of electric locomotives.

supply of electric locomotives
Picture: Антоніо Морено, Alstom

Antonio Moreno, Managing Director of Alstom in Central and Eastern Europe, spoke about how Ukrainian companies would be involved in the production of the first French electric locomotives for Ukrzaliznytsia. He also noted whether localization would be provided at 35% and whether the Electric Locomotive Plant in Nur Sultan (Kazakhstan) would be involved in the production chain under the Ukrainian contract.

This was reported by the railway magazine Railway Supply with reference to the CTS.

In particular, at the TRAKO 2021 Gdansk railway exhibition, answering a question from a CTS journalist about whether the localization of electric locomotive production in Ukraine would be 35% at the first stage, Moreno said: “This is stipulated in the contract we plan to sign. We will fulfill our obligations. And our commitment is to reach 35%. As stated in the contract, so we will act.” However, he did not specify in what perspective this percentage will be reached.

Shmyhal: Ukraine will not sign a contract with Alstom without 35% localization

When the top manager was asked whether a plant in Kazakhstan would be involved in the production chain, he said that UZ locomotives would be assembled only in France and Ukraine.

The top manager also reminded that the project will be funded by the French side and told about how the French company plans to cooperate with Ukrainian manufacturers:

“This is a big project. This is not only the production of locomotives, it is part of a global project for the railway industry in Ukraine… In parallel with the preparation of the contract, we are preparing production areas – part in France, part in Ukraine.

This is a contract for 130 locomotives, but which will be delivered in different years…

Involvement of Ukrainian enterprises will depend on them, on how well they will meet the requirements. When we sign a contract for locomotives, we will sign contracts with several Ukrainian suppliers in parallel, and their products will be delivered to France to complete the first locomotives. The first 10 locomotives will be made in France, and the transfer of technology to Ukraine will begin on the 11th.

We will also have to prepare a plant for production in Ukraine, which cannot happen overnight. Investments will be needed, an identification system will need to be set up and… will have the courage to start production in Ukraine. But all this will happen in parallel…

This is a complex task that requires the introduction of new processes and more efficient production technologies. It is necessary to establish new requirements for quality standardization, certification, ID-systems. This is what we plan to do.

When we talk about localization, it takes time and effort to develop supply chains and completely update the quality of investment.

As previously reported by CTS, Antonio Moreno also said that Alstom has signed more than 50 non-disclosure agreements with potential Ukrainian suppliers. At the same time, they are talking not only about the supply of components under the planned contract for the production of electric locomotives for Ukraine, but also about the supply of components to the enterprises of the Alstom network in general.

On May 13 this year, an intergovernmental agreement was signed between France and Ukraine on financing the purchase of electric locomotives for Ukrzaliznytsia. The document was later ratified by the Verkhovna Rada.

Alstom freight electric locomotives will be purchased at the expense of the state budget and external borrowings. In particular, the French side will provide loans amounting to 85% of the transaction amount. Financial support should be provided in the amount of 750.125 million euros.

In this regard, the company has already stated that it is ready to localize the production and maintenance of locomotives in Ukraine up to 35% gradually. “In order to benefit from the terms of the French Treasury loan, the French government requires that at least 50% of the products covered by the financing be made in France. This is the reason why the volume of Alstom localization will be implemented consistently: the first 10 electric locomotives will be manufactured in France, in order to provide these 50%; starting from the 11th electric locomotive, production activities will be transferred to Ukraine, namely: production of locomotive carts, including carriage frames, locomotive roofs, locomotive equipment, as well as testing and certification, ”Alstom explained earlier.

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