Toronto rail agency edges closer to ditching Bombardier over delays

Thu Nov 3, 2016 7:44pm EDT
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TORONTO (Reuters) - Metrolinx, the provincial agency in charge of transportation in and around Toronto, filed notice that it could terminate its contract with Bombardier Inc (BBDb.TO: Quote), a spokeswoman said on Thursday, after lengthy delivery delays.

Bombardier in 2010 won a roughly C$770 million ($574.84 million) contract to deliver 182 vehicles between 2013 and 2020. The light-rail vehicles are to be used in a new transit project crossing Toronto due to open in 2021, after Metrolinx pushed back its planned launch by a year.

The pilot vehicle is about two years behind schedule.

"We have taken the next step afforded to us in our contract with Bombardier and I can confirm it's a notice of intent (to terminate)," said Metrolinx spokeswoman Anne Marie Aikins.

Aikins said it was taking the next legal step and did not mean Metrolinx was ending its contract just yet.

In July, the agency filed a notice of default against the Montreal-based plane and trainmaker for delayed delivery of a fleet of light-rail vehicles.

"We received the letter ... This is part of the contractual process," Bombardier spokesman Marc-Andre Lefebvre said. "It’s something that we take note of but for us what we’re continuing to do is work on the (rail) cars and make sure they’re ready for service in 2021."

Toronto's municipal transit authority has also complained of delayed delivery from Bombardier after receiving only a handful of streetcars it ordered in 2009.

(Reporting by Amran Abocar; editing by Grant McCool)