Great opportunities for Czech tram-makers in the USA

04-09-2003

On August 22, 2003, a new tram line was opened in Tacoma, Washington. The trams are supplied by the Czech companies Skoda Inekon. In this week's edition of Economics Report, we talk to Martin Tlapa, the head of the Czech government's trade promotion agency, CzechTrade, about trams and trolleybuses as a traditional Czech export article.

On August 22, 2003, a new tram line was opened in Tacoma, Washington. The trams are supplied by the Czech company Inekon. This is one of the transport infrastructure projects in the United States that offer an opportunity to Czech companies to export their products. The Czech Republic has a long tradition in producing trams and trolleybuses and Czech vehicles can be seen in many places around the world.

Several cities in the United States have been expanding and modernising their public transport networks due to growing problems with individual car transport. Czechs already have a foothold in the market. Besides the Tacoma project, Inekon Group won a contract for tram supplies Portland, beating such giant rivals as Siemens and Bombardier. New projects across the States are worth an estimated 58 billion USD. The only limiting factor for the Czechs is "Buy America", a regulation which stipulates that projects financed from federal funds must include 60 percent of American supplies and vehicles must be assembled in the States. Some Czech companies are therefore considering establishing joint-ventures with American firms or setting up subsidiaries.

I spoke to Martin Tlapa, the head of the Czech government's trade promotion agency, CzechTrade, about trams and trolleybuses as a traditional Czech export article:

"There are several companies in the Czech Republic that can offer excellent solutions to meet demand for new transportation infrastructure. One of the priority markets is the United States. We have good references for companies like Inekon or Skoda. Czech suppliers just recently finished a new tramline in Tacoma, Washington. CzechTrade is looking for new opportunities in other places in the United States. We are trying to obtain information from Florida where they are planning a large infrastructure project and we encourage Czech suppliers to take part in such tenders. It is not an easy business but we would like to be able to provide information about such opportunities to Czech companies."

How much of a problem for Czech companies is the "Buy America" regulation?

"This is the reality, not only in the United States but other countries as well. The solution is to have local partners. I am very happy to see the strategies of Czech suppliers, that they are trying not just to export huge volumes of their products but focus on added value, that means to have a local supplier which will provide say steel parts for the trams, and we supply the technology or electric engines for the cars. This is absolutely normal in many countries and Czech companies know that they should have local partners for such big projects."

You mentioned Tacoma, are there any other concrete projects that Czech companies are interested in?

"Yes, there are, but I am not sure if the companies would want to share this information with others. We are examining a project in Miami to reconstruct the transportation system, worth around 200 million USD. There has been information about similar projects also in Vancouver, Canada. I know that Czech companies are looking for such opportunities and I hope that we will be successful because this is a very strong export item, we have excellent suppliers, good references and I think this is something that will increase the volume of our trade with the United States in the future."

04-09-2003