Industrial Cooperation in Railways & Urban Transport How to Bring Real Rail Benefit to the Middle East Amr B. Elsadek – ALSTOM Middle East 1

Differentiation of Definitions Transfer of Technology – Movement of innovations, knowledge, and techniques from an organization or country to another through assistance, investment, licensing, trade, or training. Transfer of Manufacture – Movement of the manufacturing process, in part or in whole, from one geographic location to another. 2

Different Rationale for Industrial Cooperation Indigenization Political Autonomy Economic Growth Industrial Development Competitiveness 3

Why Does the GCC want to as well? Enhance the non-oil based economy. Develop the local work force. Grow the regional industrial base. Create a GCC railway platform. 4

From a pure transfer approach …  Korea - KTX (Korean High Speed Train) ( )  34 trainsets of 20 cars co-produced with ROTEM (HYUNDAI, DAEWOO, HANJIN INDUSTRIES) VISSEM  500 km of Catenary co-produced with ILJIN and LG Cable  Signalling co-produced with LGIS and SAMSUNG  Korea - KTX (Korean High Speed Train) ( )  34 trainsets of 20 cars co-produced with ROTEM (HYUNDAI, DAEWOO, HANJIN INDUSTRIES) VISSEM  500 km of Catenary co-produced with ILJIN and LG Cable  Signalling co-produced with LGIS and SAMSUNG An investment which requires a vision to be sustainable today Include all components of TGV System (RS, CAT, CTC/IXL, ATC)  33 Companies involved  35 Agreements  58 Specific Transfer Plans  Documentation pages  Training in France1.200 trainees (1760 men x month)  Assistance in Korea300 assistants (1400 men x month)  33 Companies involved  35 Agreements  58 Specific Transfer Plans  Documentation pages  Training in France1.200 trainees (1760 men x month)  Assistance in Korea300 assistants (1400 men x month)

To a partnership approach  Kazakhstan Electric Locomotives (2012 – 2015)  Frame contract signed with Kazakh Railways for the supply of E-locomotives (Freight and passenger)  Creation of a Joint Venture between Alstom, TMH and KTZ : EKZ  Kazakhstan Electric Locomotives (2012 – 2015)  Frame contract signed with Kazakh Railways for the supply of E-locomotives (Freight and passenger)  Creation of a Joint Venture between Alstom, TMH and KTZ : EKZ An investment which requires a vision to be sustainable today  Results of EKZ  Agreed business plan between shareholders to adress jointly the CIS market :  1 st contract signed for Azerbaijan railways  Results of EKZ  Agreed business plan between shareholders to adress jointly the CIS market :  1 st contract signed for Azerbaijan railways

Current situation :  752 coaches manufactured (compared to 68 initially)  180 coaches for export (Singapore) (none initially)  33 tramways (none initially) Current situation :  752 coaches manufactured (compared to 68 initially)  180 coaches for export (Singapore) (none initially)  33 tramways (none initially) Time Line approx Type C Metropolis Cars Type A Metropolis Cars ProjectsXin Min (SH Line 5)Yang Pu (SH Line 8)Pudong (SH Line 6)Shanghai L1 Ext2Shanghai L2 West ExtShanghai L2 East ExtShanghai L10 Singapore NEL/CCLShanghai Trams Number of trains2 Prototypes10x4-cars trains5x4-cars trains1 Prototype12x6-cars trains10x6-cars trains5x6-cars trains21x4-cars trains16x8-cars trains11x8-cars trains 8x8-cars trains + 8x4-cars trains 20x6-cars trains 18 NEL 6-cars trains + 24 CCL 3-cars trainsSongjang+ Jiading Number of cars Project Status 100% out of warranty- overhaul contract 100% out of warranty- Overhaul contract 10 trains out of warranty4 trains out of warranty2 trains out of warranty1st delivery in May141st delivery Apr 16 Pre-design and Fonctional Adaptative Design ATSA-BCN ATSA-VPF SATCO Validation/Type Tests ATSA-BCN ATSA-VPF SATCO Details Design ATSA-BCN ATSA-VPFSATCOATSA-VPF ATSA-VPF-SATCO SATCO Bogie Frame ATSA-FBO CRC(China) PRSW(China) ATSL-CRC(CHINA)CRC(CHINA) Aluminium Profiles ATSA-BCN ATSL-SATCO SATCOPRSW(China) ATSL-VPF SATCO Aluminium Modules ATSA-BCN CRC(China) PRSW(China) ATSL-VPF SATCO Steel Material ATSA-BCN ATSL-SATCOSATCO PRSW(China) ATSL-VPF SATCO Steel Modules ATSA-BCN CRC(China) PRSW(China) ATSL-VPF SATCO CarBodyShell Assembling and Painting ATSA-BCN SATCO Carbody Electrical S/Assemblies ATSA-BCN SATCO Mechanical S/Assemblies ATSA-BCN SATCO First Phase Fitting ATSA-BCN SATCO First Phase FittingPiping Tests ATSA-BCN SATCO Final Fitting ATSA-BCNSATCO ATSA-BCNSATCO Car cabling Tests Final Fitting Phase ATSA-BCNSATCO ATSA-BCNSATCO Cars and Train Serial Tests ATSA-BCNSATCO ATSA-BCNSATCO Material Sourcing Vehicles ATSA-BCNATSL-SATCO ATSA-BCNATSL-SATCO SATCOATSL-PRSW-SATCO ATSL-VPF-SATCO SATCO Bogie Assembly ATSA-FBOCRC(China) ATSA-FBOCRC(China) PRSW(China) SATCO Material Sourcing Bogies ATSA-FBOATSL-SATCO SATCOATSL-PRSW ATSL-SATCO CHINA METRO: transfer of technology of metro through a JV with local industrial group Progressive transfer from Europe to China

Strong expertise and processes in the company  Audit and assessment of local competencies  Estimate appropriate trainings  Appropriate planning and phasing  Appropriate investment  Implementation of the transfer  Staffing of required people (workers and management)  Deployement of investment (factories, tools, IT etc …)  Start-up follow-up  Execution follow-up for a continuous quality of production  Audit and assessment of local competencies  Estimate appropriate trainings  Appropriate planning and phasing  Appropriate investment  Implementation of the transfer  Staffing of required people (workers and management)  Deployement of investment (factories, tools, IT etc …)  Start-up follow-up  Execution follow-up for a continuous quality of production

Localisation of Components Direct Localization A European supplier decides to open his own manufacture facility in Turkey Direct Localization A European supplier decides to open his own manufacture facility in Turkey Supplier Development OEM supports a local supplier, already present in similar market, during the development and manufacturing of new products. Supplier Development OEM supports a local supplier, already present in similar market, during the development and manufacturing of new products. Next to RS manufacturers, a strong supplier base shall be created to minimize costs, currency fluctuations (Ex : Russia), tax impacts, transportations costs. Governmental support, long term strategy is needed to secure investments Next to RS manufacturers, a strong supplier base shall be created to minimize costs, currency fluctuations (Ex : Russia), tax impacts, transportations costs. Governmental support, long term strategy is needed to secure investments

CITAL – A Rolling Stock Success Story in Algeria 10 A JV comprising Alstom (49%), Ferrovial Algeria (41%*) and Enterprise du metro d’Alger (10%). Created initially in 2011 to assemble and maintain Citadis trams in North East Algeria primarily for the Algerian market. Recently extended its production range to include Coradia regional and intercity trains. *Ferrovial’s participation later diluted by 10% when SNTF was included in the equity mix by the same amount.

Key Take-Aways for a Successful Industrial Cooperation in the Middle East 11 Scale and plan the size and speed of transfer to the size of the recipient market and the recipient’s ability to absorb technology and knowledge. Audit and identify the appropriate efforts and resources required. Make a gradual and incremental deployment of production identified. Establish a long term partnership between technology provider, local partner(s) and feeding industries to ensure continuity and sustainability. Contribute to the local industry to help develop and champion it over the imported alternative(s).

Thank You Amr B. Elsadek GCC Business Development Director; ALSTOM