American Railcar Industries, Inc. announces engagement to design and develop railcars for Indian Railways
Posted: 5 May 2011 | | No comments yet
The Indian Railways Research Designs and Standards Organization awarded ARI the Global Tender to design and develop certain railcars…
The Indian Railways Research Designs and Standards Organization awarded ARI the Global Tender to design and develop certain railcars...
American Railcar Industries, Inc. (Nasdaq:ARII) (the Company or ARI) announced today that the Indian Railways Research Designs and Standards Organization (Indian Railways) awarded ARI the Global Tender to design and develop certain railcars for service in India for a total contract price of $9.6 million. The Company remains Agile, Responsive and Innovative in identifying new business opportunities that expand its global footprint.
“ARI is very excited about the opportunity to work with Indian Railways. We believe this agreement will assist in establishing ARI as a high quality and dependable producer of freight railcars for use in the Indian market,” said James Cowan, President and CEO. “We remain committed to identifying and seizing new opportunities both domestically and abroad. The economy and railcar market have been challenging over the last couple of years and ARI is responding to those challenges with an expanded market strategy.”
Under this agreement, ARI will work with Indian Railways to assess the operating conditions for freight railcar traffic, design four new railcar types for heavier axle loads and build six railcar prototypes in the United States. Throughout the project, ARI will provide training to Indian Railways personnel on design, testing, manufacturing practices, quality assurance and maintenance of these railcar designs.
ARI will receive payment based upon the completion of certain design, manufacturing and development activities. ARI expects the contract to extend over several years with almost half of the steps being completed within the first couple of years.
The construction of the Company’s Indian joint venture’s state of the art railcar manufacturing facility near Chandigarh, India is currently underway. The joint venture Amtek Railcar Industries Private Limited (Amtek Railcar), of which ARI has a 50% ownership, may utilize the railcar designs being developed under this agreement, or similar railcar designs, for the joint venture’s product offerings in India. The Company believes this contract will allow ARI and Amtek Railcar to bolster their relationships with Indian Railways.