The Ministry of Industry, Trade and Labor's industrial cooperation authority, which ensures that reciprocal procurement is executed after foreign companies win Israeli government contracts, has approved a €25 million procurement plan submitted by Siemens' (NYSE: SI; XETRA: SIE). Following the Ministry's approval, restrictions on Siemens' ties to Israel Railways will be lifted.
Siemens won a €120 million contract to supply rolling stock to Israel Railways, comprising 87 single-story passenger train cars. All of Siemens procurement as part of its commitment to reciprocal procurement will relate to assemblies for the railway industry in Israel, and will include local assembly of train carriages. The Ministry approved Siemens' plan to assemble the cars in Israel, with central assemblies to be manufactured and provided by Israeli suppliers.
The final version of Siemens reciprocal procurement plan will be approved within three months, as stipulated by the tender.
Siemens is now seeking a local assembly plant, and is examining several Israeli companies as potential partners for carriage assembly, including IAI Ramta Aerostructures and Systems Division in Beer Sheva; Ha'argaz Ltd.; Merkavim Metal Works Ltd.; and Israel Military Industries (IMI) in Haifa, and others.
Ministry of Industry, Trade and Labor industrial cooperation authority chairperson Bina Bar-On said the reciprocal procurement agreement with Siemens was of strategic importance, and that it held great potential for Israeli companies to cooperate with Siemens, and develop opportunities in the railway business.
Published by Globes [online], Israel business news - www.globes.co.il - on Thursday, March 16, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006