Hyundai Rotem has entered the bidding race for a tram project in Jerusalem, following the collapse of a deal between an Israeli consortium and a Chinese rail manufacturer due to geopolitical concerns.
The Israeli government had been close to finalizing a contract with CRRC Changchun Railway Vehicles, one of China’s leading train makers, to supply rolling stock for the Blue Line of the Jerusalem tram network. However, the agreement was halted at the last minute amid growing political unease over CRRC’s presence on a U.S. Department of Defense blacklist.
According to Railway Supply, a railway industry news outlet, Israel’s Ministry of Finance suspended the signing of the contract between the JTrain consortium and CRRC on Apr. 11. The report noted that CRRC has been blacklisted by the U.S. government since 2022, and this raised concerns among Israeli lawmakers about national security implications.
JTrain holds exclusive development rights for the Jerusalem Blue Line project, one of three tram lines planned or operating in the city, alongside the existing Red and Green lines. Hyundai Rotem’s Rail Solutions Division submitted a proposal to JTrain last year in hopes of joining the $2 billion project.
With the Chinese bidder out of the picture, industry observers say Hyundai Rotem could benefit from the shifting geopolitical landscape, particularly the escalating U.S.-China rivalry, which has increasingly shaped infrastructure procurement decisions in allied nations.
The S. Korean company has been expanding its global rail business in recent years. In February, it secured a $1.5 billion contract to supply double-decker electric trains to Morocco. That deal marked one of its largest overseas projects to date.
Last year, Hyundai Rotem’s Rail Solutions Division generated around $1 billion in revenue, making up 34% of the company’s total sales. Its total rail project backlog stood at around $6.2 billion as of the end of 2024.
CRRC, once seen as a dominant global supplier, has encountered growing resistance in international markets.
In 2019, during the first term of U.S. President Donald Trump, the company was initially selected to design new railcars for New York City. However, then-Senate Minority Leader Chuck Schumer urged the Department of Commerce to investigate whether the deal posed a threat to national security.
That controversy spurred legislative efforts in the United States to prohibit the use of public funds for purchasing trains or buses manufactured by firms tied to the Chinese government.
CRRC had also participated in the Moroccan rail bidding process, but was eliminated before the final round—clearing the path for Hyundai Rotem to secure the deal.
