Ivory Coast Starts Alstom Rail Talks After Hyundai Edged Out

(Bloomberg) -- Ivory Coast is talking to French train equipment suppliers Alstom SA and Thales SA about taking part in a 1.4 billion euro ($1.6 billion) urban-railway project to be funded by France, pushing out South Korean manufacturers that were part of the deal.

The West African nation is about to amend an initial 2015 concession agreement for the project with a French-South Korean consortium known as STAR, and expects to sign a fresh deal with only French companies this month, Transport Minister Amadou Kone said in an interview. Talks will get underway with Alstom and Thales next week, he said.

“Alstom has positioned itself. Thales has positioned itself. But we're going to conduct discussions next week in Paris to definitively pick the companies,” the minister said.

The 2015 agreement fell through because a consortium of four businesses -- French firms Bouygues SA and Keolis SA, and South Korea's Hyundai Motor Co. and Dongsan Development Co. Ltd. -- failed to get financing, prompting the government to take control of the project, Kone said. Bouygues and Keolis will stay in the consortium.

“It has become clear that the financial structuring didn't allow the consortium to mobilize the financing that was part of its commitments,” Kone said. “We negotiated with the Korean companies so that they accept to exit the group.”

Biggest Project

France agreed to fund the entire project as part of a 2 billion-euro package of mainly concessional loans on the condition that the commuter line in Abidjan, the nation's biggest city with at least 5 million people, is built by French companies, he said.

The Abidjan Metro, as the line will be called, is the government's biggest urban infrastructure project since it completed a central toll bridge that has helped ease traffic jams in the city. The first line will span almost 38 kilometers (23 miles) and connect the northern neighborhood of Anyama to the international airport in the south. A second east-to-west line will be constructed later.

“The train will completely reshape the city,” Kone said. “We're very happy to see the project finally happening. It's a very important project for the residents of Abidjan.”

Construction should start at the end of next month and will take four years, Kone said. Since Ivory Coast is due to host the 2021 Africa Cup of Nations soccer tournament, the government wants part of the commuter rail completed by 2020, he said. The metro will be able to transport an estimated 530,000 passengers a day.

The French government owns almost 26 percent of Thales. Alstom is in the process of combining its train business with Munich-based Siemens AG.

--With assistance from Ania Nussbaum

To contact the reporter on this story: Olivier Monnier in Abidjan at omonnier@bloomberg.net.

To contact the editors responsible for this story: Andre Janse van Vuuren at ajansevanvuu@bloomberg.net, Antony Sguazzin at asguazzin@bloomberg.net, John Bowker, Pauline Bax