Hyundai files challenge to passenger rail tender

Hyundai Rotem, the rail manufacturing arm of the South Korean industrial concern has formally filed its appeal against the results of the botched Pasazieru vilciens (PV) tender Friday, the Procurements Supervisory Bureau (IUB) informed the public Monday on its website.  

Company reps arriving in Latvia on July 4 had already clearly stated their intent to do so. Hyundai’s bid to replace Latvia’s aging passenger railroad vehicles came in at €284 million euros for a 15-year lease period, markedly below announced Swiss tender winner Stadler, whose lease agreement totals €412 million euros and raised doubts over the existence of adequate financing sources for the deal. Latvia’s tender was to be a strategic opportunity for the South Korean concern to get a leg into European markets, where its products have not been widely distributed.

The IUB has set the term for hearing Hyundai's complaint until August 1. Meanwhile, the new board members appointed by the Transport Ministry July 8 have also been given two weeks to reassess the tender procedure and results.

PV was established in 2001 to separate domestic passenger services from other functions performed by the state-owned Latvijas Dzelzceļš (LDz). Although initially PV was a fully owned subsidiary of LDz, in October 2008 it was restructured into an independent state-owned company. The tender was announced November 25, 2013 for a 15-year lease agreement for a new fleet of electric trains.

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