Spanish firm to sign $640m train contract

Auckland is likely to get Spanish-made electric trains after a close bidding contest in which a Korean contender is understood to have lost out.

Efforts were being made yesterday to arrange a contract for the supply of 57 electric three-car trains, to be signed this afternoon by Auckland Transport and CAF of Spain, which has customers in 25 countries.

Officials of CAF - which stands for Construcciones y Auxiliar de Ferrocarriles - are believed to be in Auckland for the signing to expedite the supply of trains by 2013-14.

But it was unclear last night whether all the intricacies of the deal, which will include a lengthy maintenance term, would be ironed out in time for it to be sealed today.

CAF was one of two short-listed contenders, the other being Hyundai Rotem of South Korea, which is mid-way though supplying Wellington with its third generation of 48 two-car electric trains.

As well as the supply of trains, the contract will include a 12-year maintenance period in which CAF will operate from a depot Auckland Transport intends to build beside the main trunk railway at Wiri.

The company will add Auckland to a long list of cities running its trains, including Rome, Brussels, Washington DC, Hong Kong, New Delhi, Mexico City, Madrid, Istanbul, Sao Paulo, Santiago and Algiers.

The deal will be funded largely with a $590 million Government package, to be partly repaid and possibly topped up by the Auckland Council.

Although the Government is providing a $90 million grant to ensure enough trains can be bought, half of a $500 million loan will have to be repaid over about 35 years by the council, the Transport Agency providing subsidies to cover the balance.

The council's share will cost ratepayers about $17 million a year, on top of up to $30 million in annual charges for access to state-owned KiwiRail's tracks.

Auckland Mayor Len Brown disclosed last month that the city might also have to pay an extra $20 million to $30 million for the trains - an overall cost of $640 million has been included in the city's draft 30-year blueprint.

But Auckland will get 50 per cent more trains than the Government initially proposed in order to reduce operating costs, which would have been higher if it had to run a mixed bag of electric multiple units and locomotive-hauled carriages.

Some older trains will still be needed for services beyond the track network which the Government is electrifying for an additional $500 million, but only as far as Papakura and Swanson.

Although KiwiRail kicked off a tender round last year with 10 potential suppliers, which it whittled down to two, the final choice was Auckland Transport's after the Government agreed the city should own the new trains.

That's been welcomed by the Rail and Maritime Transport Union, which believes local ownership is the best way to protect the fleet from privatisation.

The contract will call for the first electric train to arrive in September 2013, and for the full fleet to be running by the end of the following year.

On track
* What 57 three-year "electric multiple unit" (EMU) trains
* When first to arrive late 2013, all running by the end of 2014
* Cost up to $640 million.