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Siemens Wins Battle of Fast Trains *By DAVID JOLLY*

PARIS — In an effort to prepare for competition on cross-Channel rail
traffic, Eurostar<http://topics.nytimes.com/top/reference/timestopics/organizations/e/eurostar/index.html?inline=nyt-org>said
Thursday that it had awarded a hotly sought contract to upgrade its
aging fleet of fast trains to a
Germany<http://www.nytimes.com/info/germany?inline=nyt-geo>company,
Siemens.

The announcement did not sit well in Paris, which had been backing a French
champion, and officials sharply criticized the decision.

The £700 million, or $1.1 billion, contract will provide Eurostar — which is
majority owned by the French state through its ownership of the national
railway S.N.C.F. — with 10 of Siemens’ sleek new Velaro e320 trains. Siemens
beat out the A.G.V. trains made by Alstom, the French industrial
conglomerate. Designed by the Italian firm Pininfarina, the trains will be
capable of traveling on other networks, as Eurostar seeks to extend its own
reach into Germany and the Netherlands.

The Eurostar e320, as it is known, will carry more than 900 passengers at a
top speed of 320 kilometers, or 200 miles, per hour, compared with the 750
passengers the current generation carries, at speeds of up to 300 kilometers
per hour, Eurostar said. It will also have onboard WiFi and entertainment
systems. The company hopes the new fleet will better position it for the
arrival of Deutsche Bahn, the German operator that hopes to start offering
service from points in Germany to London by the end of 2013, when Eurostar’s
monopoly ends.

Nicolas Petrovic, Eurostar’s chief executive, said Thursday in London that
the decision to award the contract to Siemens was based on “technical,
commercial and pricing criteria.”

“It was a very competitive tender and at the end Siemens made the best
overall offer,” Mr. Petrovic said. “There’s nothing else behind that but
commercial benefit to Eurostar.”

But the news was a bad break for Alstom at a time when stagnating economies
are keeping European orders down and competition is growing in overseas
markets from rising stars like China. Alstom was bailed out by the French
state in 2004, when President Nicolas
Sarkozy<http://topics.nytimes.com/top/reference/timestopics/people/s/nicolas_sarkozy/index.html?inline=nyt-per>was
finance minister, and it is seen as a national standard-bearer.

Dominique Bussereau, the secretary of state for transportation, last month
went so far as to call for the creation of “an
Airbus<http://topics.nytimes.com/top/news/business/companies/airbus_sas/index.html?inline=nyt-org>of
the rails,” a cooperative arrangement to end ruinous competition
between
French and German champions, which he said only benefited China.

In a joint statement Thursday, Mr. Bussereau and Jean-Louis Borloo, the
minister for ecology, energy, and sustainable development, expressed their
“stupefaction” at Eurostar’s “failure to take the applicable security
regulations into account.”

They said they supported international competition, but considering the
three fires that have occurred in the tunnel, including a particularly
damaging one in 2008, “no deterioration in the level of security can be
considered.”

They pointed to the fact that the Siemens’ trains employ “distributed
traction,” where the locomotive function is distributed throughout the
train, instead of traditional locomotives, which pull from the front and
push from the rear.

When the tunnel safety rules were written in the 1980s, the only trains
considered were Eurostar trains made by Alstom using the traditional
technology. Since then, the global trend is increasingly toward distributed
traction.

The Channel Tunnel<http://topics.nytimes.com/top/reference/timestopics/subjects/c/channel_tunnel/index.html?inline=nyt-classifier>Safety
Authority, which advises the French and British regulators overseeing
the tunnel, recommended in March that this rule be relaxed to allow for
distributed traction trains. The authority also called for a reduction to
375 meters from 400 meters in the minimum train length allowed. The length
is important because emergency exits inside the tunnel are spaced 375 meters
apart. (The e320s ordered by Eurostar are 400 meters long.)

Eurotunnel, as well as a French-British intergovernmental committee,
approved those recommendations this year.

“In principle, there is nothing in this train which would be ruled out as
far as it being able to obtain authorization,” said Richard Clifton, head of
the British delegation to the Channel Tunnel Safety Authority.

But Mr. Borloo and Mr. Bussereau said that the French emphasized Wednesday
at a meeting of the intergovernmental committee “the absolute necessity for
exhaustive studies” before distributed traction trains could be authorized.

“What is surprising about this announcement is that the Siemens train
doesn’t conform to the safety standards and security rules of the tunnel,”
said Virginie Hourdin-Bremond, a spokeswoman for Alstom.

Siemens declined to comment.

“There will just be some more discussion, but I think common sense will
prevail,” said Mr. Petrovic of Eurostar, in acknowledging the French
concerns.

He added that he expected the contract to be completed “in the next few
weeks at maximum.”

A European Commission<http://topics.nytimes.com/top/reference/timestopics/organizations/e/european_commission/index.html?inline=nyt-org>directive
to stimulate competition in international passenger rail routes
came into force Jan. 1, but the jury is still out on whether entrenched
players in passenger traffic, including Deutsche Bahn and S.N.C.F., also
known as Société nationale des chemins de fer français, will make room for
upstarts. A similar 2007 directive regarding freight traffic has not yet had
the desired effect.

On Oct. 19, a Deutsche Bahn high-speed
train<http://topics.nytimes.com/top/reference/timestopics/subjects/h/high_speed_rail_projects/index.html?inline=nyt-classifier>will
arrive in London after passing through the tunnel for tests. The
company hopes to show that two of its 200-meter trains tied together are as
safe as a single 400-meter train, and that distributed traction is safe in
the tunnel.

Deutsche Bahn, fully owned by the German state, estimates it will carry as
many as a million passengers to London each year, from Cologne and possibly
Frankfurt, once its service is running. Currently, its high-speed trains go
as far as Brussels, meaning passengers change there for the Eurostar
service.

Andreas Fuhrmann, a Deutsche Bahn spokesman, said the new service would
would generate a new market in Germany for cross-Channel rail traffic, as
most people traveling to Britain today choose to fly or take a bus.

Like Eurostar, Deutsche Bahn is planning to use the Siemens Velaro platform
for its service, he said.

*Julia Werdigier contributed reporting from London. Nicola Clark contributed
from Paris. ***


Mike Muldoon

Rosemont Seneca Partners, LLC

1010 Wisconsin Ave., NW

Suite 705

Washington, DC 20007

(202) 333-1880

mmuldoon@rosemontseneca.com <eschwerin@obblaw.com>

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