EU Tightens Procurement Rules as Turkish Manufacturer Excluded from Polish Train Tender

The European Union is increasingly restricting access to public procurement contracts for manufacturers from non-EU countries. After a series of measures targeting Chinese companies, Turkish rolling stock producer Bozankaya has now become the latest casualty of the bloc’s stricter procurement framework following its exclusion from a major train tender in Poland.

Regional operator Koleje Dolnośląskie, serving Poland’s Lower Silesian Voivodeship, has excluded Turkish manufacturer Bozankaya A.Ş. from a procurement procedure covering the supply of four hybrid trainsets, with an option for up to 16 additional units. The tender concerns either hydrogen-electric or battery-electric multiple units, with all prototype trains required to complete a one-year testing programme on the Polish rail network before entering commercial service.

The three remaining bidders, PESA Bydgoszcz, Siemens Mobility, and Škoda Group, have all progressed to the next stage of the competition.

Bozankaya currently operates within the European railway market primarily through the tram sector. The company has supplied vehicles to the Romanian cities of Timișoara and Iași and is currently fulfilling a contract for Naples. However, the Polish operator justified the company's exclusion by citing new EU procurement rules that allow contracting authorities to limit or exclude bidders from third countries that do not maintain reciprocal trade agreements with the European Union.

Europe Tightens the Door on Non-EU Rolling Stock Suppliers

The case follows a series of similar actions involving Chinese state-owned manufacturer CRRC Corporation Limited, whose growing presence in Europe has raised concerns among policymakers and industry stakeholders.

In 2024, under pressure from a European Commission investigation into alleged state subsidies, CRRC withdrew its bid for a train contract in Bulgaria, leaving Spanish manufacturer Talgo as the preferred supplier. Earlier this year, the company was also excluded from a procurement process for 12 trams in Lisbon after EU investigators concluded that state-backed financial support had enabled CRRC to submit an unusually low bid.

Since 2023, the European Union has gradually tightened market access rules, largely in response to the aggressive expansion of Chinese state-supported manufacturers. At the EU Competitiveness Summit earlier this year, Austria’s railway industry association VBI called for public rolling stock contracts to include a mandatory requirement that at least 50% of added value be generated within the European Union.

Foreign Subsidies Regulation Targets Unfair Competition

The legal basis behind many of these decisions is the EU’s Foreign Subsidies Regulation (FSR), which aims to prevent companies benefiting from foreign state support from gaining an unfair advantage in the European market.

The regulation requires scrutiny of public procurement procedures worth at least €250 million and acquisitions involving companies with EU turnover exceeding €500 million. CRRC became the first railway manufacturer significantly affected by the new rules after concerns emerged that extensive state support enabled the company to undercut European competitors.

The objective of the FSR is not to block foreign participation entirely but to ensure a level playing field. If the European Commission determines that foreign financial contributions distort competition, it can impose corrective measures or even prohibit the contract award altogether.

Brussels Also Monitors Foreign-Funded Acquisitions

Public procurement is not the only area under increased scrutiny. The European Commission is also monitoring acquisitions of European companies by foreign investors.

Under the FSR framework, transactions can be investigated if the target company, a merger participant, or a joint venture generates at least €500 million in EU turnover and has received more than €50 million in foreign government support during the previous three years.

Despite growing restrictions, CRRC has previously managed to enter the European market through partnerships with local companies. In Romania, the Chinese manufacturer successfully secured a contract for 100 trams in Bucharest as part of a consortium with local producer Astra. In Germany, however, authorities rejected CRRC’s bid for 45 trams in 2020 after determining that localisation requirements had not been met.

According to UNIFE, the association representing Europe’s rail supply industry, CRRC participated in seven EU procurement procedures between 2011 and 2018 and won all of them. Most involved relatively small-scale contracts for freight wagons, locomotives, trams, and diesel multiple units. The most notable was a €190 million electric train contract awarded by Czech operator Leo Express, although the agreement was later terminated in 2022.

A New Era for European Rail Procurement

The exclusion of Bozankaya from the Polish tender highlights how European procurement policy is evolving. What began as a response to concerns over Chinese state-backed competition is increasingly becoming a broader framework governing access to the EU rail market for manufacturers from outside the bloc.

For European rolling stock suppliers, the new rules are intended to provide greater protection against subsidised competition. For non-EU manufacturers, however, securing contracts within Europe is becoming increasingly dependent not only on technology and price, but also on the geopolitical and regulatory environment surrounding international trade.