MONTREAL (CP) -- Bombardier Transportation has signed a contract worth up to US$1.6 billion to supply double-deck trains to Swiss Railways for inter-city travel.
The initial contract is for 59 Bombardier Twindexx trains, with options for 100 more.
The contract is the largest ever awarded by Swiss Federal Railways' (SBB), which will also spend about $100 million on its network and development costs. It was announced last month in Europe, subject to a 20-day appeal, but Bombardier's share of the $1.7-billion project wasn't disclosed.
Bombardier, the world's largest train manufacturer, won the contract over rivals Siemens AG and Stadler Rail AG.
The trains consist of a total of 436 fully air-conditioned carriages providing more than 36,000 seats.
Bombardier sites in Zurich, Villeneuve and Winterthur, Switzerland, will increase capacity to complete the project.
"Switzerland has always played an important role for Bombardier, both as a market and as a production location," said Andre Navarri, President of Bombardier Transportation.
"The three Swiss sites with 900 employees are not only a fixture in the country's traditional rail industry but are also important elements of our international network of innovation and production."
Delivery of the Twindexx trains will begin in 2012, and the first vehicles will feature in the standard timetables from December 2013.
All 59 trains will be delivered by the end of 2019.
Swiss Railway CEO Andreas Meyer said Bombardier best fulfilled the contract's criteria with its modern, customer-friendly trains. They are equipped with wide doors, wireless Internet, and business class compartments.
"What is more, the roll compensation means that we can also save more time, improving punctuality and reducing missed connections. This is an important step towards improving our own service."
Analysts have said such contracts are needed to replenish Bombardier's $27.1-billion order backlog and generate revenues. They also position Bombardier to bridge the gap until aerospace recovers. Europe, China and India are expected to drive the railway division's growth.
Bombardier recently said it was watching the credit situation in Europe carefully, but remained optimistic about the outlook for new orders this year.
David Newman of National Bank Financial expects several new Bombardier orders will come to fruition around the globe over the next two years in Britain, Montreal, New Jersey and Italy. It also could be a strong contender in the development of the U.S. high-speed rail network.
"Demand for rolling stock and the upgrading of transportation infrastructure is expects to drive future growth at Bombardier Transportation, with new systems limited to select urban projects," he wrote in a recent report.
Bombardier also submitted an expression of interest for an equity stake in United Electrical Engineering Plants to help modernize Russia's signalling network.