Chinese train maker withdraws from Bulgaria tender after EU probe

5 months ago 24

Chinese rail giant CRRC has withdrawn from a tendered project in Bulgaria after the EU last month launched a probe into it over suspected subsidies, the European Commission said on Tuesday (26 March).

As a result of CRRC’s withdrawal, the commission “will close its in-depth investigation”, it said.

Brussels had announced the probe on 16 February, with EU internal market commissioner Thierry Breton at the time saying CRRC Qingdao Sifang Locomotive was thought to have relied on subsidies to “submit an unduly advantageous offer” to try to win the tender for electric trains in Bulgaria.

On Tuesday, the commission said it “takes note of the withdrawal” by CRRC.

“In just a few weeks, our first investigation under the Foreign Subsidies Regulation has already yielded results,” Breton said.

He said that Europe’s single market remained open “for firms that are truly competitive and play fair” but that Brussels will take “all necessary measures to preserve Europe’s economic security and competitiveness”.

Bulgaria’s tender was for the purchase of 20 electric trains, and their maintenance over 15 years, for a total value of around €610 million.

CRRC is the world’s largest train manufacturer. It has contracts in more than 110 countries and regions, from US cities to India and Latin America.

Under the EU’s Foreign Subsidies Regulation, firms have to notify the European Commission of any public procurement tenders in the EU worth more than €250 million, if they were also granted at least four million euros in foreign financial contributions in the three prior years.

The EU has recently stepped up scrutiny of Chinese companies that may be benefiting from state subsidies to outbid rivals.

In September, commission chief Ursula von der Leyen announced a probe into Chinese subsidies for electric vehicles judged by European industry to be “artificially low”.

And in January, Brussels unveiled policies to prevent sensitive technology or infrastructure from falling into the hands of economic rivals such as China.