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Explanation by CRRC Qingdao Sifang Co., Ltd. on the Partially Shipping Back of Singapore Metro Trains

07/07/2016

In response to the recent media’s interest in and coverage on the shipping back of the C151A metro trains exported to Singapore by CRRC Qingdao Sifang Co., Ltd. (hereinafter referred to as “CRRC Sifang”), CRRC Sifang hereby express sincere appreciations for the care and support of friends from all walks of the society. Supervision by the general public is more than welcomed, as CRRC Sifang will be motivated by such focus to exert more intensified and consistent efforts for better service and products to our valuable customers.

In light of the above mentioned concern, CRRC Sifang hereby make the following explanations:

1. Overview on C151A Metro Trains

Respectively in May 2009 and April 2012, the Consortium formed by Kawasaki Heavy Industry, CRRC Sifang and Kawasaki Heavy Industry Singapore was awarded the C151A order for 35 sets of metro trains in total by the Land Transport Authority of Singapore (hereinafter referred to as “LTA”). The first set of train was delivered to the customer in January 2011 and the delivery of the rest was finished by September 2014.

2. General Information on Trains Shipped Back

In June 2013, some local defects were detected on the carbody shells of 26 trains during a routine inspection to the C151A trains by the operator.

Such defects, after evaluation, were identified to have been caused by unqualified raw materials of the aluminum alloy profiles in certain batches. Systematic analysis shows that such defects bear no safety risk and will not impair train safe operation. However, based on the sense of accountability to our valuable customers and products, CRRC Sifang offered to send the trains with local defects back to the manufacturing facility for repair.

3. Progress of Manufacturer Repair

Steady progress is being made on the batch by batch shipping back and repair of the involving trains. Trains previously repaired have been re-put into service in Singapore, delivering sound operation performance. The first set of such repaired trains has been working safely for approximately 300,000 kilometers.

4. Next Steps

As an enterprise of over one-hundred-year history, CRRC Sifang has delivered over 30,000 rail transit vehicles to more than 20 countries and regions in the world, which has extensively verified CRRC Sifang’ strong product quality. After informed of this incident in June 2013, we felt deeply distressed and took a series of measures to address the problem. Through proactive discussions with the customer, we proposed solutions and guaranteed that all measures were well implemented. Additionally, we launched procures for problem analysis and correction measures, carried our internal reviews on quality assurance practices and drafted improvement approaches. As a lesson to learn, we will further refine the requirements of supplier management and raw material inspection, intensify quality management through the entire process of R&D, procurement, manufacture, quality control and after-sales service. CRRC Sifang is and will always be a strong champion of rail transit products better in quality, safer in operation and more comfortable in riding.

Thank you once again for your care and support to CRRC Sifang. We welcome your supervision on the company. And your engagement will help us forge a better CRRC Sifang.

CRRC Qingdao Sifang Co., Ltd.

July 6, 2016

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