Stockholm metro developer defends contract award to Chinese firm

The organisation responsible for delivering the expansion of Stockholm’s metro system has defended its decision to award a tunneling contract to a state-owned Chinese firm.

Region Stockholm, the body responsible for all publicly-funded transport and healthcare in Stockholm County, Sweden, was criticised this week for awarding a contract to build three Blue Line tunnels to Nacka to the contracting giant China Tunnel Railway Group (CTRG). 

The runner-up in the contest, Subterra Sverige (Subterra Sweden), claimed the winning price, around $28m, was below the cost price of the work. Another contractor, Veidekke, told media that it chose not to bid for the work because "serious companies" could not win.

But today Region Stockholm published a statement on its website rejecting those claims. 

It said the bid from CTRG, a highly experienced tunneling contractor, was close to its own calculated price and not below cost.

"The offer from China Railway Tunnel Group is close to what we have calculated in our calculations and we do not see this to be a sub-price, as it has been written in some places in the media," says an English translation of the statement in Swedish.

The organisation said it made many strict demands on bidders, including on sustainability, working environment and information security. Bidders also had to show good financial standing to be able to do the work.

"China Railway Tunnel Group meets all the requirements we set and they submitted the lowest bid," Region Stockholm said, adding that since tax money was paying for the metro expansion, funds had to be spent wisely.

Region Stockholm also pointed out that CTRG had bid for tunnels in Barkarby but those contracts went to Swedish companies NCC and Subterra Sverige.

It added, however, that other bidders had until 7 October to appeal the contract award to CTRG, as its contract had not yet been signed.

CTRG is a subsidiary of China Railway Group Limited, which is ranked by ENR as the second largest construction company in the world. China Railway Group is a public company in which the Chinese state is the major shareholder.

Image courtesy of Region Stockholm

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