Power technology company ABB signed a SEK 1.4 billion contract with SJ to carry out the technical upgrade. Some of the production will take place in Sweden.
"This is a great day for SJ. This is a great investment that will bring the whole of rail travel into the future. We can guarantee that the new X2000 is the best train for Swedish infrastructure," SJ CEO Crister Fritzon told reporters.
Fritzon added: "It will mean that we can guarantee that we will have the shortest travel time of all trains in Sweden. For customers, this means completely new trains with greater comfort and increased punctuality."
The existing X2000 trains, which are over 20 years old, will not be scrapped and replaced by new models. SJ said that the idea was to "reuse" the trains in an environmentally-friendly and sustainable fashion. The refit includes replacing computers, drive and control systems on board all X2000 trains. The refit is expected to lower energy consumption by 10 percent.
Asked why SJ chose this strategy, Fritzon said that they had not found better suited trains. "We will refurbish trains to become a brand new train, we replace all of the key technology components," he said.
"For the customer and for us it will be a completely new train fully adapted to the Swedish infrastructure. We have travelled with many trains throughout Europe and have not found a train that is better suited for the Swedish infrastructure."
The first redesigned trains will be in service in 2016. ABB's CEO, Ulrich Spiesshofer, was pleased with the deal. He said in a press release: "The rehabilitation of fast trains is a growing market for ABB's rail business."
SJ has previously spoken of the need for a major overhaul of its fleet of over 30 X2000 trains. Swedish Television reporter Knut Kainz Rognerud said that there have been major problems with the trains in recent years.
"SJ decided last year to upgrade the X2000 trains with improved technology and fixtures and fittings after many years of big problems and deferred maintenance," explained Kainz Rognerud.
Train drivers have for years talked about a long list of errors on each train that they are driving, reports Swedish Television. In addition, train axles have broken time and again and air conditioning and toilets have been out of order numerous times.
According to Swedish Television, the trains have been pressed hard year after year in order to ensure SJ achieves the financial goals set by the government, including high-yield and dividends.