May 12, 2017 / 3:00 PM / 2 years ago

Toronto agency inks Alstom order as possible alternative to Bombardier

The logo of Alstom is seen before a news conference to present the company's full year 2016/17 annual results in Saint-Ouen, near Paris, France, May 4, 2017. REUTERS/Gonzalo Fuentes

MONTREAL (Reuters) - Ontario transit agency Metrolinx said on Friday it is entering into an agreement to buy 61 light rail vehicles from French train maker Alstom (ALSO.PA), largely as a possible alternative to a contested deal with the company’s Canadian rival Bombardier Inc (BBDb.TO).

Metrolinx, which is in a dispute with Bombardier over delivery delays on an existing contract, said in a statement that the steps taken with Alstom give the agency a “safety net if it turns out Bombardier is unable” to fulfill its contract.

Alstom said in a statement the contract is worth over 355 million euros ($387.55 million) and includes an option for additional vehicles. 

Metrolinx, which manages public transportation in the metropolitan Toronto area, said 44 of the 61 Alstom cars would serve as alternatives on the agency’s Eglinton Crosstown line, in the case of future delays or execution problems by Bombardier. If Bombardier’s order is completed on time, the 44 Alstom cars would be reassigned to a different line.

The remaining 17 vehicles made by Alstom would be used on a separate light rail project.

Metrolinx, which tried to cancel a C$770 million ($561.35 million) light rail contract with Bombardier because of delays and execution concerns, was ordered by an Ontario court judge in April to continue dispute resolution talks with the Quebec-based maker of trains and planes.

“We are going through a dispute resolution process with Bombardier, but that could take eight to 12 months, and we can’t wait that long to determine whether Bombardier will be able to deliver,” the agency said.

Bombardier said in a statement that it is “ready, able, and willing to deliver these vehicles to the people of Toronto on time.”

When asked for comment on the order, Canadian Prime Minister Justin Trudeau told reporters just north of Toronto on Friday that his government tends “to respect the opportunity and the responsibility of municipalities and provinces to make decisions around procurement.”

Reporting By Allison Lampert in Montreal; Additional reporting by Leah Schnurr in Ottawa; Editing by Phil Berlowitz

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