Poltava Locomotive Overhaul Plant signs contract with GE

Poltava Locomotive Overhaul Plant (PTRZ: N/R) announced this week that it signed a five-year contract with GE Transportation to jointly modernize its TEM2 and 2TE10 locomotives. According to the agreement, GE Transportation, the General Electric’s locomotive and railway equipment wing, will supply Super Skid power plants for 200 Poltava-made 2TE10 diesel locomotives over the period. The deal also provides for GE-equipment to modernize TEM2 locomotives starting in 2009. Poltava Locomotive also stated plans to increase the share of overhaul & modernization services in total sales to 50% by 2015 (from 16% in 2008E), and maintenance services to 20% in that time (from 2% in 2008E). According to the company, this will allow it to achieve annual sales of USD ~165 mln through 2015. Inna Perepelytsya: The company’s agreement with GE will help to realize its ambitious 2015 targets. The total number of 2TE10 and TEM2 locomotives in former USSR countries and Poland is ~7 ths (all produced between 1958 and 1996). Annually, the company overhauls and modernizes 200 locomotive sections.