The European Union has opened an unprecedented investigation into a unit of China’s state-owned train maker CRRC Co. Ltd. over alleged unfair subsidies, reports Caixin. The European Commission announced the probe Friday on CRRC unit Qingdao Sifang Locomotive and Rolling Stock over its bid for a €610 million ($657 million) public procurement contract in Bulgaria to provide electric trains along with maintenance and staff training.
The probe, which could block the company from the deal in the worst outcome, is the first in-depth investigation under the Foreign Subsidies Regulation that came into effect in July designed to prevent foreign subsidies distorting the market of the 27-country block.
As required by the new rules, CRRC Qingdao Sifang notified the European Commission on Jan. 22 about the tender. The commission has until July 2 to make a ruling.