Bombardier scales back Middle East operations

08 August 2016

Firm’s rail division eyeing Egypt monorail project

Canadian aircraft and trains manufacturer Bombardier is scaling back its Middle East presence, sources tell MEED.

“Some have been made redundant, while others have left the company and the country upon the completion of their contracts,” one of the sources, who had left both the company and the UAE, told MEED.

The number of employees at the firm’s regional offices, located in Dubai, is understood to have been significantly reduced.

Bombardier representatives were not immediately available to comment when contacted by MEED. 

The family-controlled firm posted a loss of $490m, equivalent to 24 cents a share, in the second quarter of its 2016 reporting period. Revenues declined 7 per cent to $4.31bn.

Bombardier has struggled with mismanagement, debt and declining stock prices in recent years. It brought in a new chief executive in 2015 and initiated major cost-cutting measures, which have helped improve the performance particularly of its private jet business, according to a report by the Wall Street Journal.

In the GCC, Bombardier’s rail business has experienced a mixed fortune. It signed a $383m deal to supply rolling stock for the Riyadh Metro in 2013. The work involves supplying 47 of its Innovia Metro 300 two-car driverless trains that are equipped with Mitrac propulsion technology.

It is part of one of the consortiums bidding for the first package of the yet-to-be-awarded Mecca Metro as well.

In 2010, Bombardier was subcontracted by Saudi Oger to engineer, procure, construct and operate the electrical and mechanical elements of a monorail system for the King Abdullah Financial District (KAFD) in Riyadh. The subcontract included the supply of six trains. The KAFD, however, has faced major delays. It is currently 70 per cent complete but it is struggling to lease space to financial institutions.

Bombardier also leads one of two consortiums that made an offer for the contract to build a monorail system in Greater Cairo in Egypt. The Prime Minister’s office is understood to be in the final stages of reviewing the offers made by Bombardier and the China Gezhouba Group Corporation (CGGC).

The project was initially being supervised by the Ministry of Housing, Utilities and Urban Development, which prematurely announced in May 2015 that it had commissioned the Canadian-led team to build the project. Egypt’s Ministry of Transport (MoT) subsequently took over the scheme in late 2015, and said it would be working closely with the Housing Ministry on the implementation. CGGC subsequently made its offer.

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