Chinese company drops bid for Bulgarian train contract after EU probe

A Chinese company has dropped a bid, subject to a European Commission investigation, for a public contract for electric trains in Bulgaria, the EU executive arm announced on Tusday.

The European Union's market "is open for firms that are truly competitive and play fair," EU Internal Market Commissioner Thierry Breton said in a statement in praise of the outcome.

The commission announced an investigation in February into a bid from CRRC Qingdao Sifang Locomotive Co. Ltd, a Chinese company, for a public contract in Bulgaria for electric trains.

The investigation was launched to find out if public subsidies allowed the Chinese state-owned company to submit a more advantageous bid.

The investigation, the first of its kind, took place under new powers to protect the EU's economy from market distortions linked to subsidies for companies from non-EU countries like China.

Chinese state support for business is a particular sore point for the EU, which for decades has applied strict competition rules to domestic companies.

When bidding for public contracts, subsidies must be disclosed for orders worth €250 million or more. Companies supported with state money can be excluded from public contracts in the EU.

The contract in Bulgaria was for 20 electric trains worth €610 million ($656 million) and their maintenance over 15 years.

As a result of the Chinese company's withdrawal, the commission will close the investigation.