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Hong Kong MTR

MTR Corporation did not consider maker’s faulty Singapore trains during tender process for HK$6b contract

But senior staff were worried something was wrong with mainland firm’s quality control procedures ahead of purchase of 93 new trains for MTR system

PUBLISHED : Wednesday, 13 July, 2016, 5:19pm
UPDATED : Thursday, 14 July, 2016, 8:15am

Despite the MTR Corporation’s doubts about a mainland manufacturer’s quality management, its record of producing 26 faulty trains in Singapore was not considered in the rail operator’s tendering process for a HK$6 billion contract for 93 urban trains last year, it emerged yesterday.

However, drawing a lesson from the fiasco, the rail giant is now considering including bidders’ records in future tenders to allow more stringent evaluation, according to MTR Corp sources.

The revelation came as the Post was told senior rail staff thought there was something wrong with CRRC Sifang’s quality control procedures as it failed to discover impurities in the aluminium alloy used for the body of 26 trains it produced for Singapore. This was the cause of hairline cracks found on their bodies and in key structural components in 2013.

“No matter where the materials come from, usually the manufacturer will conduct its own metallurgical analysis to ensure that the metals used are free from any impurities,” a source said.

“Therefore we think that there were some problems with CRRC Sifang’s quality management procedures. Since we will conduct our own metallurgical analysis, we don’t think we need to disqualify it as a bidder just because of this problem,” he said.

It is also understood that after reaching the conclusion, senior technical staff did not report it to the board because they did not think the matter was so serious that it required the board’s attention.

Separately, Dr Jacob Kam Chak-pui, MTR Corp’s managing director, said since they had already concluded in 2014 that safety issues did not arise with the subway trains produced by CRRC Sifang for Singapore, its qualification as a bidder remained intact.

“This record was not included in the tendering process for consideration for our procurement of 93 new trains because we already concluded that its trains did not pose any safety problems” he said.

Their view was based on the Singapore authorities’ assessment and information from the manufacturer that their trains were not safety-critical.

Kam also admitted they did not conduct an industrial inquiry like meeting the suppliers and making factory visits for the tendering process in late 2014, saying this procedure was unnecessary as they already understood the latest market situation.

“Industrial inquiry is not an indispensable requirement prior to a tender exercise,” he said

“Our technical team had sufficient knowledge of the rolling stock market ... therefore it was unnecessary to have a further industrial inquiry at that time,” Kam added.

After the tender was done through a “two-envelope system” – one for the technical specifications followed by another for tender price – the HK$6 billion contract was awarded to the mainland maker in July last year.

Stopping short of saying whether CRRC Sifang offered the lowest price, Kam said the train maker’s bid was deemed the best in value for money terms and energy and maintenance efficiency.

“The MTR Corp never sacrifices quality and safety for a lower price,” Kam explained.

Stressing stainless steel material would be used for the bodies of the 93 trains, ­the rail operator will be more stringent in selecting the supplier and also enhance its inspection, metallurgical analysis and tests to ensure quality.