Bombardier Competitor Comes to Toronto

 

In 2010, Metrolinx signed a $770 million deal with Bombardier to purchase 182 vehicles to run on the Eglinton Crosstown among other Toronto LRT lines. Consistent delays and legal battles have resulted in a dispute over the order, as the two pilot vehicles, which were due in spring of 2015, have yet to arrive.

The transit company recently asked a court for the right to cancel its contract with Bombardier due to the manufacturer’s inability to live up to its obligations. Bombardier argued that the first pilot vehicle, though delayed, was ready for testing but Metrolinx had refused to accept it. Bombardier also claimed that Metrolinx was simply trying to get out of the contract because it no longer needed the 182 vehicles originally ordered due to the cancellation of some of the LRT lines that were planned at the time of the purchase.

Despite the company’s insistence that the dispute was a result of manufacturing problems and repeated delays, the judge sided with Bombardier, ruling that the cancellation of the order would not be possible without going through a dispute resolution process. That process has begun, though Metrolinx claims that it could take eight to twelve months to resolve. “We can’t wait that long to determine whether Bombardier will be able to deliver,” said John Jensen in a statement.

 

Metrolinx has since developed a backup plan, wherein the company cut its order of 182 light rail vehicles from Bombardier to 76 as French company Alston obtains a revised contract to build in the Toronto region. Alstom Canada spokeswoman Marilena Varano stated that the project will create approximately 120 jobs in addition to the 300 Canadians already employed at facilities in Ottawa and near Montreal.

CEO Phil Verster stated that 106 of the Bombardier vehicles originally ordered will be replaced by 61 larger cars purchased through a $528 million agreement with Alstom. In addition to the current deal, Metrolinx may be planning to order subsequent vehicles from the company as well.

The new deal between Metrolinx and Bombardier includes harsher penalties if vehicles are not delivered on time.

The effort to work with both companies at once increases the likelihood that the transit company can open the Crosstown by 2021 as scheduled without the financial penalties incurred for breaking the contract. Additionally, Metrolinx would face a penalty of up to $500,000 per day if the line is not completed on time.

 

Sources:

CBC News

The Star

Yahoo Canada

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