From the Red Line
Published in

From the Red Line

Barking up the wrong tree

Time for your weekly dose of stupid.

Someone else in the train fan community had the bright idea to come up with a Change.org petition getting LTA to go with Alstom for the R151 contract. I believe in the Streisand effect so I won’t post it here, but you can probably go looking on the /r/Singapore Reddit forum.

That in itself is a pretty stupid idea. While I too support the idea of Alstom getting the R151 contract instead of Kawasaki, never mind the ethical question of influencing the procurement process, let’s face it. If you ask me,

This is Kawasaki’s contract to lose.

Below I have reproduced my original comments from the Reddit thread, though with some edits to make it feel more at home in a blog post as opposed to some random rant.

My thoughts in general:

Even our newer trains on other lines were built by Alstom (for NECCL) and Bombardier (for DTL) in China, by other factories, Shanghai Alstom Transport and CRRC Changchun respectively. The last time we had a train not built in China was the original C830s, shipped all the way from France. That drove up costs, and despite the dropping price of oil in 2017, no one’s going to pay to ship 396 traincars halfway across the world when we have such an immense industrial power up north.

Now, CRRC, or China Railway Rolling Stock Corporation, is a giant conglomerate able to abuse the heck out of economies of scale, with about 15–20 facilities across China. Each facility is free to choose who to partner with, so long as profit goes back up the food chain. In the former case, Kawasaki partnered with Qingdao Sifang, and Bombardier with CRRC Changchun, and both companies through these partnerships will always be able to build cheaper than the competition. (like for example Shanghai Alstom which is outside the CRRC umbrella)

Furthermore, at the risk of getting sued, I daresay that LTA and Kawasaki are pretty much in bed together. The only reason why we even use Alstom on NECCL was because back then Kawasaki, a Japanese manufacturer, didn’t have the experience with automated trains that Alstom had, and Alstom could hence offer a complete solution while Kawasaki could not. Our NEL is just a supersize version of Line 14 in Paris. And the CCL is largely similar.

Unlike what happened with that tragic flyover collapse a few weeks ago, such large contracts are not evaluated purely on cost (we’ll look at that later). But simply put, as we can see in the Alstom and Kawasaki cases, “pre-existing relationships” often help in the technical tender evaluation, especially for fleet additions/replacements.

The problem here is that Kawasaki’s factory in Kobe is fully tied up because every suburban railway in Tokyo wants to replace trains by 2020 because of the Tokyo Olympics. Thus, other Japanese manufacturers like J-TREC (formerly Tokyu Car), Hitachi, and Nippon Sharyo, are also fully occupied. Hence, Kawasaki has no choice but to build in China.

On the other hand, Qingdao Sifang is also the facility building China’s bullet trains, so if you think this incident is worrying, you might want to think twice before getting on board a CRH high speed train.

Bombardier, also, is having problems. They were recently booted out of New York after repeated delays with the delivery of their new trains, and I’m not hearing good things about the company in general, and not just their USA facilities.

Realistically, the only choices left are Alstom and Kawasaki.

Regarding the question of why the public should get involved

(as a reply to this comment)

I don’t profess to know a lot about LTA’s inner workings (I’m just a blogger, right?) but if I had to guess:

More scrutiny than deserved is being given to this contract, firstly because of the issues mentioned with the manufacturer, and secondly, the flyover collapse a while back put a spotlight on LTA’s way of handling bids (always take the lowest?)

LTA uses a two-envelope system to handle such large tenders — where the technical proposal is one submission, and the financial documents are another submission, and both are evaluated separately by different teams. Only when both teams agree on which proposal they should take, would they have chosen the winner.

I would hazard a bet that the incidents with the C151A trains have caused the Kawasaki bid to be given some demerit points in the overall consideration. However, the fact that a majority of the remaining NSEWL fleet are Kawasaki trains, making maintenance much easier, would probably make up for it.

In addition, the price Alstom had put in for the T251 contract was simply ridiculous ($950 million SGD? Seriously?), and despite losing slightly in the technical side, Kawasaki’s offer of $750 million (which was the lowest) was probably more reasonable for the LTA tender team.

Now, I can only hope that Alstom low-balled this contract, because personally I kind of like their build quality too. In the case of the extra trains for NECCL (Contracts 751C and 830C), Alstom’s winning bid of $354 million was not the lowest (the lowest bid was CAF at $281 million), but the fact that they would be built compatible to the existing fleet, and spares interchangeable and whatnot, probably gave them a leg up against the other competitors. For the record, Kawasaki opted not to bid for Contract 751C.

All this information is actually available at the LTA website if you want to look through it.

Obligatory disclaimer because I don’t want to get sued

Note that all this is solely my opinion. I do not profess to be any kind of LTA insider, nor do I have any knowledge of what the actual procurement process looks like. As with everything else on this blog, all my comments are just well-educated guesses. I may be wrong (I probably am).

--

--

--

A blog on transport issues in the Garden City of Singapore. You can say that I love controversy. Posts can get technical! Abuse of comments may be blocked. Subscribe to Telegram for updates: https://t.me/ftrlsg

Recommended from Medium

What is the best SaaS business model?

Disruptive Innovation for Competitive Advantage

Payments Ecosystem Overview

Why We Started Evolve

Working class American working at a convenience store.

An open letter to iconic (stale) retailers… You’ve let your business be disrupted!

Fostering Entrepreneurship in Northwest India

A business community to help businesses connect and grow- Bizkom

What European companies need to know before expanding to the US

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
yuuka

yuuka

Sometimes I am who I am, but sometimes I am not who I am not.

More from Medium

Next-level Authentication with Webauthn

Welcome to the Engine Room

Happiness for All — Part 2