US lawmakers blast Chinese rail firm amid cybersecurity fears

Workers build bullet trains at a factory of CRRC Tangshan Co., Ltd. in Tangshan, north China's Hebei Province, March 23, 2018. CRRC Tangshan Co., Ltd. is a Chinese railway equipment manufacturing company.

WASHINGTON: China's CRRC, the world's top passenger train maker, was slammed by U.S. lawmakers during a hearing on Thursday to limit the world's top passenger train maker's access to U.S. projects amid security fears.

CRRC Corp Ltd has launched a charm campaign in the United States as it seeks to secure a Washington D.C. metro car contract worth over $500 million, after roaring into the American passenger rail market by dramatically underbidding foreign rivals.

Concerns CRRC could soon set its sights on the much more lucrative U.S. freight market and use its railcars to spy on passengers have prompted a series of legislative proposals. A bipartisan bill unveiled in the U.S. House this week, which mirrors one proposed in the Senate earlier this year, would prevent transit agencies from spending federal dollars on projects awarded to CRRC.

At a House hearing on state-owned enterprises and rail, Phillip Washington, chief executive of Los Angeles County Metropolitan Transportation Authority, was asked by Arkansas Republican Rick Crawford if he knew CRRC was a Chinese state-owned enterprise "hellbent on conquering the rail market."

"I stand by our procurement," Washington said, noting CRRC's bid in 2017 offered the best terms on the $647 million contract to build 64 subway cars for the city.

CRRC was not invited to testify at the hearing, just weeks before the May 31 due date for bids for the Washington D.C. tender.

"CRRC has no plans of building freight railcars in the U.S. and is focused exclusively on the manufacture of passenger railcars in the U.S.," said Dave Smolenksy, a spokesman for CRRC's Chicago-based unit.

While some experts see the cyber security fears as overblown, many see CRRC's likely expansion into the American freight market as a significant security and economic concern.

During the hearing, Crawford read a CRRC tweet that appears to have been deleted: "So far 83% of all rail products in the world are operated by #CRRC or are CRRC ones. How long will it take for us conquering the remaining 17%?" - Reuters