Bombardier wins massive Crossrail contract

<p>The company beat rivals from Japan and Spain.</p>

Bombardier's share price is up this morning (February 6th) after the company was confirmed as the winning bidder for a major government contract.

The firm has won the £1 billion contract to provide trains for the Crossrail project in London, beating competition from rival bidders such as Japan's Hitachi and Spain's CAF.

Chief executive at Crossrail, Andrew Wolstenholme, stated that Crossrail is going to "transform" public transport in London and the south-east of England.

"Procurement of the rolling stock and depot is just one more step in delivering this new railway and making it a reality for millions of passengers," he said.

Mr Wolstenholme added that the deal, which will provide 760 manufacturing jobs and 80 apprenticeships, was conducted in a "fair, objective and transparent manner".

Boris Johnson, Mayor of London, said: "The manufacture of these new trains will not only revolutionise rail travel in London, they will deliver jobs and economic growth in their birthplace in Derby and across the UK."

Rail upgrades

There had previously been calls for the government to hand the Crossrail project to a British company, ensuring the money and jobs stays in this country, but the government insisted it had to come to the decision through the proper channels.

Crossrail is due to run from Maidenhead and Heathrow Airport in the west of the capital to Abbey Wood and Shenfield in the east. It is one of the biggest transport infrastructure projects the UK has ever seen.

The government says that capacity on the rail network in London will be boosted by ten per cent as a result of the Crossrail scheme, which paves the way for the high speed rail programme that is set to link London and cities further north such as Birmingham and Manchester.

But the high speed scheme has been dogged by controversy due to the high amount of money that is being spent on the programme, which critics suggest could be better used in other areas.

Stocks in Bombardier rose by around two per cent on the back of the announcement.

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.