Canada's Bombardier Transportation warned local authorities Tuesday it could be forced to close down its Belgian plant if it does not get a contract from the state-controlled railway to build 1,200 railcars.

The contract is for an express commuter line to be constructed around the capital of Brussels.

Unions have said Germany's Siemens AG has offered to build the passenger cars for less money than Bombardier. The NMBS-SNCB railway company has refused to comment on which company will be awarded the contract.

Bombardier spokesman Guy Hendrix says some 1,350 direct and related jobs are at risk if the rail company choses to award the euro1.5 billion (US$2.3 billion) contract to Siemens, a multinational which has no plants in Belgium.

"This contract is extremely important, everybody knows that. There are 850 people that are employed at Bombardier Transportation in Bruges," Hendrix told VRT radio. "We have several other projects still under way but they will come to an end and then the question rises can we get new projects to guarantee the jobs that we have."

The warning puts pressure on Belgian political leaders, who are trying to form a national government amid concerns that the economy is headed for a slowdown.

Bombardier, France's Alstom SA, Spain's CAF SA and Siemens are all vying for the lucrative contract, the daily De Standaard reported.

Bombardier's plant in Bruges has won numerous contracts with the Belgian rail company and is currently finishing an order for 90 double-deck coaches and a separate order for 100 trams for the Brussels regional transport authority MIVB.

SOURCE: YAHOO FINANCE