Metrolinx slashes $770-million Bombardier deal (Globe & Mail)

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The regional transit agency Metrolinx is cutting in half a $770-million vehicle deal with Bombardier Transportation for the Toronto area, The Globe and Mail has learned, drawing a line under a long-running dispute between the two parties.

Bombardier had originally contracted to produce 182 vehicles, with about two-fifths going to the now-under-construction Eglinton Crosstown light-rail line and the remainder earmarked for other projects. Under the terms of the new deal, Metrolinx would use Bombardier vehicles on the Crosstown only. The other lines will be equipped by rival supplier Alstom.

The decision cuts the Bombardier order size from 182 to 76 vehicles. Because of fixed costs spread across the entirety of the contract, though, the dollar value of the deal is expected to be cut roughly by half.

Bombardier has faced repeated criticism from both Metrolinx and the Toronto Transit Commission – which has its own much-delayed vehicle order – that the company cannot produce on time. The TTC is pursuing a damages process to try to claw back some of the costs it has incurred due to delays. Metrolinx became concerned enough to go to court, trying to establish its right to kill the deal. The court rejected the argument, a decision that set off a chain of events culminating with this new deal.

Also, in the aftermath of the court decision, Metrolinx showed its willingness to sideline Bombardier. In May the agency struck a $528-million side deal with Alstom for 61 light rail vehicles, characterizing this as an insurance policy. These vehicles could be used to open the Crosstown on time if Bombardier fell short, Metrolinx said, and would otherwise go to other lines.

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Written by Long Branch Mike