Construction is expected to begin this week on a Chinese state-owned rail company's assembly plant that will produce up to 846 new rail cars for the Chicago Transit Authority.

The project will return CTA rail car manufacturing to Chicago after a 50-year absence, according to the city. CRRC Sifang's American subsidiary, CRRC Sifang North America, won the $1.3 billion contract last year to build the new 7000 Series over 10 years. The cars will have a combination of forward- and rear-facing seats as well as single seats and some facing the aisle.

CRRC Sifang will invest $100 million in building a 380,944-square-foot manufacturing facility on 45 acres in Chicago's Hegewisch neighborhood on the Southeast Side.

Production will begin in early 2019. The facility will begin testing the new car prototype later that year and the cars will hit the rails by 2020.

The facility will employ about 170 workers, according to a statement from CCRC. The company will spend $7.2 million to train the workforce, according to a statement from Mayor Rahm Emanuel's office.

The Chicago assembly plant is part of the company's larger plan to "become internationalized," said Li Yongle, vice president of CRRC Qingdao Sifang, under the CRRC corporate umbrella.

"We recognize the United States as an important and strategic market for the Sifang," he said through an interpreter. "It will support other project plans in the U.S., including projects for metro cars and high-speed trains."

The company already has a contract to build rail cars for Boston's transit system and aims to use the new Chicago plant if it wins bids to manufacture rail cars for San Francisco's Bay Area Rapid Transit system, known as BART, and a double-decker coach car project for Metra, Li said.

The company plans to assemble "major components" of the cars at the plant, including the trucks, doors, the heating and cooling system, brakes, stainless steel car body shell and a new propulsion system designed for a smoother, quieter ride. Assembly parts will be sourced from the U.S., China and other areas, according to Li.

The CTA's first order of 400 new cars will replace its oldest rail cars, which date back more than 30 years. Once the new cars are in service, the CTA will have one of the youngest fleets of any U.S. transit agency, according to the CTA.

The Chinese company's $1.309 billion bid came in $226 million lower than one submitted by Canadian-based Bombardier, which appealed the CTA's decision to pick the Chinese firm. The decision was upheld last year after being reviewed by the CTA. 

"This new facility represents a major investment in Chicago that will bring economic development to the Southeast Side, while creating good-paying jobs for hundreds of workers," said Mayor Rahm Emanuel in a news release.

The new rail cars will have LED lighting and 37 or 38 seats each and be a hybrid of the previous 5000 Series and the 3200 Series currently seen on the Brown and Orange lines. Both federal and local funds will pay for the project, with the local money coming from a previous bond issue.

Li said his company still is negotiating possible tax incentives for building the facility in Chicago. A spokesman from the mayor's office said there are no city incentives but the company could be eligible for a county property tax credit. crshropshire@chicagotribune.com