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MOSCOW, May 25 (RIA Novosti) - Transmashholding, a Russian transportation mechanical engineering giant, and the transnational concern Bombardier Transportation, a global rail equipment producer, agreed Friday to set up two joint ventures in Russia.

Under the contract, the two companies will establish an engineering center to design modern rail components and equipment, and a joint venture to produce Bombardier and Mitrac products.

Investment in the projects will amount to some 500 million rubles ($19 million).

Transmashholding unites railway engineering enterprises that produce diesel and electric locomotives, freight and passenger cars.

The company's 2006 net profit, calculated to Russian Accounting Standards, fell 25% year-on-year, to 285.1 million rubles ($11 million).

Last year, it signed a credit agreement with Russia's largest privately owned bank, Alfa-Bank, worth 990 million rubles ($36 million) to re-equip the holding's enterprises.