The procurement procedure for the Lisbon Violet Line is entering a decisive phase, after the European Commission authorised its continuation, but under strict conditions established under the Foreign Subsidies Regulation (FSR). This is not a simple administrative approval, but the result of a direct intervention in a major urban infrastructure project, with implications for the entire European rail industry.
The decision follows the requirement for the consortium involved in the tender to make structural changes in order to eliminate the risk of competitive distortion. Specifically, a Chinese company associated with funding worth billions of dollars, considered problematic from a competition perspective, withdrew from the consortium led by Mota-Engil. This withdrawal was not marginal, but essential to unblocking the procedure.
In the new context, Metropolitano de Lisboa may proceed with the selection process and, ultimately, award the contract to the bidder offering the best economic proposal, provided that all technical requirements and commitments undertaken are fully met. The consortium led by Mota-Engil remains in the competition, but only within the limits set out in the commitments accepted by the Commission.
Brussels opens landmark investigation into procurement deal
The European investigation is based on an investigation carried out under the FSR, triggered following the consortium’s official notification. Within this framework, the role of subcontractors was assessed, including Portugal CRRC Tangshan Rolling Stock Unipessoal, which was involved in the bid submitted for the tender launched in April 2025 covering the design, construction and maintenance of the Lisbon Violet Line.
The key moment was the opening, on 5 November 2025, of an in-depth investigation, after the preliminary assessment indicated possible distortions caused by foreign subsidies. The central suspicion was that financial support received by the subcontractor may have enabled the submission of an artificially competitive bid. The findings of the investigation confirmed these concerns, highlighting an unfair competitive advantage incompatible with internal market rules.
To remedy the situation, the consortium proposed a set of binding commitments, which were subsequently accepted by the Commission. The central element of these commitments is the replacement of Portugal CRRC with Pesa Bydgoszcz, a European rolling stock manufacturer that does not benefit from foreign subsidies with distortive effects on competition. This change is considered sufficient to remove the undue advantage and restore fair conditions between bidders.
Following the acceptance of these measures, the Commission allowed the consortium to remain in the procedure. However, the final decision on the award of the contract rests solely with Metropolitano de Lisboa, which must verify whether the revised bid meets all technical, quality and performance requirements.
The Commission’s role does not end here, as it will continue to monitor compliance with the commitments undertaken, intervening only if new evidence relating to foreign subsidies emerges. In the absence of such developments, no additional measures are foreseen.
A EUR 677 million project
The total investment for the Lisbon Violet Line project amounts to EUR 677.5 million, of which EUR 77.5 million is allocated to expropriation costs and consultancy services for the project, including its redesign and construction supervision. Four consortia submitted bids for the project.
The tender, launched in April 2025, had a base value of EUR 600 million plus VAT and covers design, construction, the purchase of rolling stock, and the provision of maintenance services. The project will be financed through the Recovery and Resilience Plan, the Environmental Fund, the EIB – European Investment Bank, EU funds, and the state budget.
The light metro line will be 11.5 km long with 17 stations, three of which will be underground. The project also includes the construction of a depot and workshop covering an area of 3.9 hectares. The line will connect the municipalities of Odivelas and Loures, located in the Lisbon metropolitan area, with northern Lisbon and will link to the existing metro network, in particular the Yellow Line at Odivelas.
The first public procurement procedure for the Violet Line project was launched on 15 March 2024 and resulted in the exclusion of all bids submitted by economic operators, as they exceeded the tender’s base price by an average of approximately 46%.
In this context, it became necessary to update the investment cost to reflect price increases that occurred between the completion of the preliminary study (in 2023) and the estimated start date of the new procurement procedure for the project. This update resulted in a EUR 150.2 million increase in the total investment cost.
The pressure of unfair competition from outside the EU
The Lisbon Violet Line case marks a precedent: it is the first conditional final decision adopted by the European Commission following an in-depth investigation in the field of public procurement under the Foreign Subsidies Regulation. From this perspective, the stakes go beyond the project itself and concern how the European Union will, in future, manage global actors’ access to major infrastructure contracts.
“The decision on the Lisbon metro shows that our efforts are delivering results. We remain vigilant in protecting public procurement procedures from practices that distort competition, while maintaining our openness to trade and investment,” said Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy.
In recent months, UNIFE has consistently drawn attention to the risks posed by unfair competition from companies outside the European Union, particularly from China, calling for more active engagement from European institutions. The issue is becoming increasingly sensitive as the European rail industry operates within a tightly regulated framework characterised by high standards in safety, social protection and environmental performance.
The concern raised by industry representatives is not competition itself, but the significant differences in the conditions under which it takes place. While European companies must comply with stringent and transparent rules, some firms from third countries benefit from substantial state financial support or advantageous funding mechanisms, enabling them to submit highly competitive bids in international tenders.
This imbalance is placing growing pressure on the European industry, which bears additional costs arising from compliance with environmental, safety and state aid rules. In the absence of uniformly applied rules for all participants, there is a risk that procurement processes may be influenced by factors not solely related to technical performance or economic efficiency.
Against this backdrop, the European rail industry is calling for stronger instruments at EU level to correct these distortions and ensure fair competitive conditions. The aim is not to restrict market access, but to create a level playing field in which all actors operate under the same rules.
European rail industry welcomes EC decision
Representatives of the European rail industry have welcomed the European Commission’s recent decision on the application of the Foreign Subsidies Regulation, describing it as an important step in protecting competition within the single market. According to UNIFE Director General Enno Wiebe, the decision confirms that European instruments are beginning to deliver tangible results: “the firm but balanced approach […] protects the integrity of the single market while maintaining openness to global competition.”
He also emphasised that this is the first time the Commission has adopted a conditional decision following an in-depth investigation in public procurement, which “marks an important moment for the credibility” of the foreign subsidy control mechanism. “The [European Commission] decision also confirms the importance of the Foreign Subsidies Regulation in ensuring fair competition in Europe’s strategic industries, such as the rail sector,” Enno Wiebe added.
From UNIFE’s perspective, the rail sector is not only an economic one, but also a strategic industry, playing a key role in military mobility, industrial development and the European Union’s climate objectives.
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