Bombardier Transportation and Transmashholding Announce Groundbreaking Joint Ventures for Russia

New Deal Secures Specialized Skill and the Most Advanced Propulsion Technology for Russian Market

Bombardier Transportation and Transmashholding, Russia’s leading rail technology manufacturer, signed an agreement today creating two joint ventures: an engineering joint venture to develop advanced propulsion technology and technical solutions for railway equipment plus a production joint venture to manufacture a family of traction converters based on Bombardier’s proven MITRAC propulsion technology.

The agreement was signed in the Russian city of Sochi in the presence of the Russian Railways’ President, Vladimir Yakunin.

The engineering centre will be located in Moscow and serve customers from Russia and abroad. The centre is expected to be operational in Autumn 2007. Both companies plan to offer out of this center their capabilities for development of rolling stock and related equipment.

The manufacturing joint venture will produce the first traction converter family at the Transmashholding’s plant in the city of Novocherkassk in Russia. In its initial phase, the joint venture will manufacture advanced converters required for a new generation of locomotives with asynchronous propulsion. The propulsion equipment will be used for locomotives of the Russian Railways and for other customers, also outside of Russia. Production of at least 600 converters is targeted by 2012.

For that purpose, Russian workers will be trained by Bombardier in Europe. European experts will also support the production start-up to ensure that the new production site will be designed according to the latest European standards.

Both engineering and production joint ventures will be owned equally by Bombardier Transportation and Transmashholding. The two partners will together invest a total of EUR 12.5 million ($ 16.9 million US) in both joint ventures.

With an unparalleled market demand for up to 7,500 new locomotives in Russia by 2015, these joint ventures ensure that the best technology and engineering skill will be in place to help meet that need for the long term.

During the signing ceremony on May 25, 2007, Bombardier Transportation Chief Operating Officer Wolfgang Tölsner said: “This agreement demonstrates the firm commitment of both parties to develop a long-term industrial partnership that addresses the fast growing Russian market. This industrial base will also be used to jointly enter new markets. We are very proud to take part in the future of Russia’s rail industry with Transmashholding and to offer our innovative products and state-of-the-art technology to our partner.”

Chairman of Transmashholding Directors’ Board Dmitry Komissarov commented: “For the first time in Russian railway manufacturing, a technologically independent engineering centre will be created. Together with our foreign partners, it will develop new advanced products based on mutual experience, knowledge and technologies, not only for the Russian market, but also for other countries.”

Background facts and figures

About Bombardier in Russia
Bombardier Transportation’s long-standing relationship with Russia and the CIS began more than 50 years ago through Deutsche Waggonbau AG (DWA), acquired by Bombardier in the late 1990s. From 1948 to 1995, DWA manufactured one out of every two passenger rail coaches made for the Soviet Union and later Russia. In the rail transportation sector, Bombardier has successful long-term relationships and joint ventures with Russian manufacturing and engineering partners, including JSC Russian Railways and Transmashholding as well as a Moscow-based joint venture in signaling.

About Bombardier Transportation
Bombardier Transportation has its global headquarters in Berlin, Germany with a presence in over 60 countries. It has an installed base of over 100,000 vehicles worldwide. The Group offers the broadest product portfolio and is recognized as the leader in the global rail sector.

About Bombardier
A world-leading manufacturer of innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment, systems and services, Bombardier Inc. is a global corporation headquartered in Canada. Its revenues for the fiscal year ended Jan. 31, 2007, were $14.8 billion US, and its shares are traded on the Toronto Stock Exchange (BBD). News and information are available at www.bombardier.com.

About Transmashholding
CJSC Transmashholding is the largest Russian manufacturer of rolling stock and related equipment and supplier to the largest global operator JSC Russian Railways. The holding integrates transport machine building enterprises and a production and engineering center in Germany. It manufactures diesel shunters and main-line diesel locomotives, electric industrial and main-line locomotives, freight wagons and passenger coaches, car casting, diesel engines for diesel-electric locomotives and vessels, multiple train units, metro cars, door modules, driver's cabs, car bodies, auxiliary static converters, public service vehicles. With the staff of 53,000 employees and volume of Sales over US$ 2,2 billion in 2006, the products of the company can be found in various countries outside of Russia, including Europe, Asia and Africa.

About MITRAC
The Bombardier MITRAC technology is a state-of-the-art propulsion and control systems for all types of rail vehicles and trolley buses. These highly reliable systems are tailored to the needs of individual customers derived from a modular range of components. The complete MITRAC range of Train Control and Communications, Drives, Traction Converters and Auxiliary Converters offer comprehensive, harmonized system solutions that are economically viable and guarantee smoother, more reliable and cost efficient operation.

Bombardier and MITRAC are trademarks of Bombardier Inc. or its subsidiaries.

For Further Information Please Contact:
Americas

David Slack: + 1 450 441 3190

Germany, Austria
Birgit Stallmann: + 49 30 986 07 1136

Switzerland
Fiona Flannery: +41 44 318 29 91

Central and Eastern Europe, Russia
Natalia Kourakina-Lattner: + 49 30 986 07 1137

UK, Ireland, Nordic Countries, Australia, New Zealand, other countries
Neil Harvey: + 44 1332 2664703

Benelux and France
Anne Froger: + 33 6 07 78 95 38

France
Jean-Pierre Hulot: +33 1 41 34 08 45

Spain, Portugal, Italy, Greece, Turkey, India
Luis Ramos: + 35 1 919 693 728