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Metrolinx Files Notice of Intent to Cancel Bombardier Inc Light Rail Vehicle Contract Worth $770 Million

Metrolinx, the Crown agency that manages public transit in Ontario, confirmed Thursday it has formally notified its intent to cancel its $770-million contract with Bombardier Inc. to supply light rail vehicles in Toronto.

“There have been some concerns about Bombardier’s performance as there have been significant quality and manufacturing issues that, to date, have not been resolved,” said Metrolinx spokeswoman Anne Marie Aikins in an emailed statement.

“As a result, we have taken the next step available to us through our contract,” Aikins said. “We will continue to work with Bombardier on this issue and we will deliver on our transit commitments.”

Metrolinx has expressed concerns about delays in the production of 182 light rail vehicles, which the agency ordered in 2010 to serve provincially funded light rail lines that include Toronto projects on Eglinton Avenue, Finch Avenue West and Sheppard Avenue East. Bombardier has yet to deliver any vehicles.

Two of those lines are scheduled to be ready by 2021. Metrolinx requires 76 vehicles for the $5.3-billion Eglinton line and 23 for the $1.2-billion Finch line. Development of the Sheppard light rail has been delayed indefinitely.

Aikins said Metrolinx could offer no further comment because it is now engaged in a legal process with Bombardier.

Metrolinx’s notice of intent does not mean it will terminate the LRV deal; it is a step that follows  issuance of a notice of default in July.

Last week, Bombardier said it was cutting its Canadian workforce by 2,000 as part of a global staff reduction of 10 per cent, or 7,500 positions. While two-thirds of the global layoffs will come from Bombardier’s transportation division, most of those in Canada — 1,500 — will be in Quebec. The company also said that the job losses will be partially offset by more than 3,700 new hires to work on the production of its rail vehicles, the CSeries and Global 7000 business aircraft.

Bombardier said the cuts are designed to create about US$300 million in savings, and will contribute to a recovery plan it began last year to improve its profitability by 2020.

The company has struggled as demand for its airplanes has waned and production delays have hit its railway business. Besides problems with the Metrolinx delivery, Bombardier has repeatedly failed to meet its schedule on a $1.2-billion, 2009 order for 204 streetcars from the Toronto Transit Commission.

“They’ve delayed, delayed, delayed, but the end date doesn’t shift,” TTC chief executive Andy Byford said in September, noting that the company has until 2019 to provide the full fleet. “They’re going to have to up their game.”

However, the delays in its own LRT purchase didn’t stop Metrolinx from placing a $428-million order with Bombardier in August, this one for 125 commuter rail cars for its Go Transit lines. The purchase was an extension of a 2014 deal for 65 rail cars and now totals $685 million.

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