Germany\'s engineering giant Siemens will strengthen its position on the Russian market by producing hundreds of locomotives for the state-owned railway system. A corresponding letter of intent has been signed in Moscow. Engineering heavyweight Siemens on Friday secured a multi-billion-euro deal with state-owned Russian Railways (RZD) involving the delivery of high-tech locomotives. In the framework of a visit to the Kremlin by German Chancellor Angela Merkel, Siemens signed a letter of intent on the delivery of close on 700 locomotives worth 2.5 billion euros ($3.2 billion). The German company is to produce the locomotives in a joint venture with Russian partner Sinara. More to come Siemens reported it had signed an additional contract with the Russian Federal Grid Company on the future delivery of transformers to be used in the national electricity grid. Moreover, Russian engineering company Uralvagozavod announced it was planning to use controlling software from Siemens. No details were given about the volume of the contracts. With the deals ushered in on Friday, Siemens looks set to considerably strengthen its position on the lucrative Russian market. The German company already secured contracts on the delivery of Velaro high-speed trains to Russian Railways in 2009. The trains are fitted with special insulation to resist extreme temperatures and have a maximum speed of 250 kmh (155 mph).