Chinese rolling stock builder removed from Lisbon contract

The awarding of the major project for the new "Linha Violeta”11.5km light rail line in northern Lisbon has taken a significant turn. At the center of the controversy is the Chinese train manufacturer CRRC, which was originally part of a consortium participating in the bidding process. 

 

The key for this development was an investigation by the European Commission under the new EU regulation on foreign subsidies. The investigation concluded that CRRC's Portuguese subsidiary may have benefited from state aid that distorted competition. Specifically, the investigation focused on various forms of state support within China: CRRC received approximately EUR471 million in state subsidies in the three years prior to the notification. In addition, the company was granted a tax advantage in China equivalent to a 10 percentage point reduction in the corporate tax rate compared to the standard rate of 25% – also continuously over the same period. Advantages in the procurement of raw materials and components were also deemed potentially distorting competition. This could have allowed the consortium to submit an unfairly competitive bid. 

 

The Commission had already launched an in-depth investigation in November 2025 after evidence of such distortions of competition emerged. The procedure represented one of the applications of the new EU rules designed to protect the internal market. 

 

The construction and operation consortium for the "Violet Line" comprises several companies led by the Portuguese construction group Mota-Engil. The consortium is complemented by the vehicle manufacturer and other partners responsible for operation and maintenance. Following an EU ruling, the consortium was restructured in April 2026: CRRC was replaced as a supplier by the Polish manufacturer PESA. EU authorities approved this change, thus ensuring a continued high level of financing through the Plano de Recuperação e Resiliência (PRR), or Recovery and Resilience Facility (RRF). PESA is supplying five-section, low-floor, articulated trams with bidirectional operation.