Siemens Wins $1 Billion Contract for Israel Railway’s New Self-propelling Train Cars

Expanding the railway’s train fleet has become critical since an increase in passengers has led to heavy crowding at peak hours

An Israel Railways train.
Eliyahu Hershkovitz

The German industrial conglomerate Siemens is the successful bidder that will supply 330 electric passenger train cars to Israel Railways, the state-owned rail company informed the Tel Aviv Stock Exchange on Tuesday.

Siemens will receive 3.2 billion shekels ($907 million) for supplying the rail cars themselves, roughly 400 million shekels for maintenance services and another 230 million shekels for building a maintenance facility in Israel. All told, the German company’s contract will be worth 3.83 billion shekels. Siemens beat out the French firm Alstom in the final stage of bidding, bringing a lengthy process to an end a year after the bids were submitted.

Siemens will be providing an entirely new model of train car – electric and self-propelling – that is not yet in use anywhere in the world. The two middle cars of a four-car train will be double-deckers and the two on the ends will have one level of seating. Siemens also won the bid for providing Germany with trains featuring the same design, and they will take to the rails there before they enter service in Israel.

The new Siemens train cars will collectively provide about 1,700 passenger seats and will boost Israel Railway’s stock of train cars by 37%. The expansion of the railway’s train fleet has become critical as the increase in riders has caused crowding on the trains.

About two weeks ago, Israel Railways announced that four of the six international bidders to supply the train cars had been disqualified for technical reasons after receiving failing grades. They included the Canadian company Bombardier, which is currently Israel Railways' main train car supplier and which had been considered a leading contender.

Last year, Siemens acknowledged that it paid bribes to the state-owned Israel Electric Corporation between 1999 and 2005 and agreed to pay the Israeli government 160 million shekels. Siemens was also part of the MTS consortium that in 2007 won the bid to build the Red Line of the light rail system for the Tel Aviv region. The consortium ultimately lost the job, however, when the Israeli government decided to withdraw the contract.