New LRT deal was only choice, minister says
Resolution to Bombardier dispute may take up to a year and delay Crosstown opening
The provincial government had no choice but to sideline Bombardier and seek an alternate vehicle supplier for the Eglinton Crosstown LRT, according to the minister of transportation.
At a news conference at the future site of the Laird Crosstown station Friday morning Steven Del Duca announced details of a deal, reported Thursday by the Star, to purchase dozens of cars for the line from French manufacturer Alstom.
Bombardier is under contract to produce vehicles for the $5.3-billion LRT project, but the order has been delayed. Del Duca said the ongoing dispute resolution process with Bombardier could take up to a year, which would risk delaying the Crosstown opening.
“As minister of transportation, I refuse to stand idly by in this time of uncertainty,” he said. “From my perspective it’s essential that we take responsible action in order to ensure that we successfully deliver on our commitments to open these transit projects on time.”
Late Friday afternoon, Bombardier, which was caught off guard by news of the Alstom purchase Thursday evening, issued a statement suggesting there was no need to enlist another supplier. The statement asserted that the Montreal-based company “is ready, able and willing to deliver these vehicles to the people of Toronto on time.”
As evidence of its ability to produce the Crosstown vehicles, the company said that, as part of a separate order, it was on track to supply 14 virtually identical cars to Waterloo by the end of this year.
“As the minister and Metrolinx are well aware, these vehicles can be ready ahead of schedule and well before a single track has even been laid on the Eglinton Crosstown,” said the statement.
“We have addressed the issues raised in the past.”
Under the $528-million deal, Alstom will produce 61 of its low-floor Citadis Spirit cars for Metrolinx, the provincial transit agency for the GTA.
Seventeen of the cars will be used for the planned Finch West LRT, but 44 would be deployed on the Crosstown project should Bombardier fail to deliver enough vehicles to open the Eglinton line by 2021 as scheduled. If Bombardier manages to make good on the Crosstown order, Metrolinx will use the 44 cars on Mississauga’s Hurontario LRT.
Del Duca said that having the Bombardier and Alstom orders run in parallel was “a creative and prudent approach to dealing with a less than ideal situation none of us relishes.”
“We are proud to continue our collaboration with Metrolinx as it seeks to link communities and deliver advanced public transit solutions to the greater Toronto area,” Angelo Guercioni, managing director of Alstom Canada, said in a statement, “and we are honoured by their renewed confidence in our products.”
The Alstom deal was issued on a sole-source basis, without the normal bidding process that ensures government contracts are set at a competitive price. Metrolinx is permitted to sign sole-source contracts under certain emergency conditions, Del Duca said, but he asserted that the price of the Alstom cars was “comparable” to the Bombardier vehicles.
The minister said that Alstom, which is currently building the same Citadis Spirit vehicles for Ottawa’s Confederation Line, would open an assembly facility in the GTA to fill the order. Metrolinx is also confident the company will be able to meet the same Canadian content requirements as the Bombardier deal, which stipulates at least 25 per cent of the vehicles must be made domestically, as well as meet provincial accessibility standards.
According to Del Duca, the penalties for late delivery of the vehicles “are stronger” under the Alstom contract than they were in the Bombardier deal.
Metrolinx had planned to operate a fleet of 76 vehicles on the Crosstown LRT, which stretches 19 kilometres across the north of the city. Because the Alstom cars are longer, Metrolinx would run fewer vehicles on the line.
The Alstom purchase might also require modifications to the Crosstown infrastructure, which is already under construction and was designed with Bombardier vehicles in mind. Del Duca couldn’t immediately specify which facilities might have to be altered or how much the changes would cost, although a maintenance and storage facility that is already partially built would likely have to be modified.
Metrolinx agreed in 2010 to purchase 182 vehicles from Bombardier to run on the Crosstown and other Toronto LRT lines, at a cost of $770 million. Two prototype vehicles that were supposed to arrive in the spring of 2015 have yet to be delivered however, and last fall Metrolinx issued the company with a notice of intention to terminate the deal, alleging the company had defaulted.
Last month, an Ontario Superior Court judge blocked Metrolinx from terminating the deal for default, and directed the two parties to go through the dispute resolution process spelled out in the contract. With Metrolinx on the hook for penalties it estimates could reach up to $500,000 a day if the Crosstown is delayed, the agency decided to secure an alternative supplier.