French firm seals train deal amid diplomatic differences

PARIS

French rail transport manufacturer Alstom has agreed to a €300 million ($351 million) agreement to build commuter trains for the city of Melbourne amid a major diplomatic row between France and the Australian, US, and UK governments over a new global security pact, according to a company statement.

The 93-year-old company, based in the northern Paris suburb of Saint-Ouen, inked a deal on Monday with the second-largest city Down Under for manufacturing 25 six-car X’trapolis trains.

Alstom, also the company behind France’s high-speed AGV and TGV trains as well as the Eurostar, makes passenger transport along with signaling equipment and locomotives.

The new trains are to be built in the town of Victoria with at least 60% of the materials coming from local suppliers. The town of Ballarat, just near Melbourne, is home to an Alstom plant.

The diplomatic discord afoot however started last week after an announcement by the US, UK, and Australia on the formation of an alliance, with Australia receiving a new set of nuclear-powered submarines from the US and UK allies. The announcement was led by US President Joe Biden from the White House, with Australian Prime Minister Scott Morrison and British Prime Minister Boris Johnson tuning in virtually.

The new pact, dubbed AUKUS, will discard the Future Submarine Program that France currently has in place with Australia to build diesel-powered submarines. The contract is worth some €56 billion ($66 billion). Australia will assemble eight nuclear-powered submarines with its new allies, the US and UK.

French government officials were immediately taken aback by the announcement, issuing a press release on Thursday with their dismay over what they called "unprecedented challenges" being faced in the Indo-Pacific region.

Since then, Foreign Minister Jean-Yves Le Drian has given multiple TV interviews excoriating the alliance, calling it everything from “regrettable” to “duplicitous.”

On Sunday, French government spokesman Gabriel Attal called the matter a “major breach of confidence.”

Biden on Sunday requested a phone call with French President Emmanuel Macron for later in the week to ease the tensions that have erupted over the new tri-country pact.

On Friday night, France also recalled its ambassadors to the US and Australia from Washington and Canberra to discuss the issue.