Hyundai Rotem signs Korea's largest overseas railway maintenance contract
Hyundai Rotem signed a contract for a maintenance project worth 748.2 billion won ($488.5 million) with Morocco's national railway operator ONCF, as the Korean company moves to broaden its role as a railway solutions provider.
Hyundai Rotem exports its electric railcars.HYUNDAI ROTEM
Hyundai Rotem is expanding beyond railcar exports and into operations and maintenance to broaden its role as a railway solutions provider.
The company signed a contract for a maintenance project worth 748.2 billion won ($488.5 million) with Morocco’s national railway operator ONCF in Rabat, Morocco, on Thursday — the largest overseas railway maintenance contract ever secured by a Korean company.
Morocco is one of the three hosts of the 2030 FIFA World Cup and is preparing for the event by expanding its rail network, centered on Casablanca, its largest city.
Hyundai Rotem also won a 2.2 trillion won contract last year to supply 440 double-decker electric railcars to ONCF. The latest contract will allow the company to provide maintenance services for the fleet.
The project will be carried out over the next 20 years through a joint venture established by Hyundai Rotem and ONCF. Under the agreement, the railway company will supply parts for vehicle maintenance and repairs and provide technical support for comprehensive maintenance work — including inspections, repairs and replacements — to ensure optimal performance and operational safety.
“This contract will not only contribute to strengthening Morocco’s public transportation system but also have a positive impact on expanding Africa’s railways,” a Hyundai Rotem representative said. “We will take responsibility for both the delivery and after-sales maintenance of the railcars and strive to contribute to the development of the local railway industry and public transportation.”
Hyundai Rotem has been expanding its railway business in other countries as well.
Lee Yong-bae, the CEO of Hyundai Rotem, left, and Mohamed Rabie Khlie, the director general of Morocco's national railway operator ONCF, pose for a photo in Rabat, Morocco, on June 18 after signing a contract for a railway maintenance project in Morocco.HYUNDAI ROTEM
Commercial operations for the Jaloliddin Manguberdi high-speed train in Uzbekistan — supplied by Hyundai Rotem in a contract worth 270 billion won — began in May. The train runs on the country’s longest rail route, stretching about 1,020 kilometers (634 miles) between the capital Tashkent and Khiva, a historic Silk Road city in the western region. While the route used to take around 15 hours by train, the high-speed train reduced that to about 7 hours. Hyundai Rotem is supplying six trainsets, each consisting of seven cars.
In April, the railway company signed a 491 billion won contract with Vietnam’s Thaco Group to supply driverless trains for the Ho Chi Minh City Metro line No. 2. The two sides also signed a memorandum of understanding for Hyundai Rotem to supply signaling systems.
Additionally, Hyundai Rotem signed a 320 billion won contract with the city government of Edmonton in Alberta, Canada, in February to supply high-floor light-rail vehicles.
Industry observers say that Hyundai Rotem is building a railway value chain export model that extends from train manufacturing to local maintenance, operations and production. They also expect the Morocco maintenance contract to strengthen the company’s position in the African railway market.
Hyundai Rotem’s Rail Solutions division is expected to generate revenue of 2.44 trillion won this year, increasing 16.7 percent from last year, according to estimates from Hyundai Motor Securities. The division is projected to log an operating profit of 36.6 billion won during the same period, up 25.3 percent.
“Beginning in the second quarter, the share of low-margin domestic projects will decline while revenue from overseas projects, including the Los Angeles Metro, will be reflected in earnings, improving profitability,” said Baek Ju-ho, an analyst at Hyundai Motor Securities, referring to the company’s deal to supply electric railcars to the U.S. city.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
