July 20, 2016 / 6:57 PM / 3 years ago

Toronto rail agency serves Bombardier over light rail delay

A Bombardier logo is pictured on the company booth during the European Business Aviation Convention & Exhibition (EBACE) at Cointrin airport in Geneva, Switzerland, May 24, 2016. REUTERS/Denis Balibouse

TORONTO (Reuters) - Metrolinx, the provincial agency in charge of transportation in and around Toronto, said on Wednesday that it had filed a notice of default against Bombardier Inc (BBDb.TO) for delayed delivery of a fleet of light-rail vehicles.

The notice was served on July 12 and gave a short deadline for Bombardier to provide an updated schedule for delivery of the vehicles, none of which have yet been delivered.

“Metrolinx has exercised an option in our contract,” a spokeswoman said in an emailed statement. “Serving notice is the right thing to do from a business perspective.”

A Bombardier spokesman said the company expects to complete two pilot vehicles in August and begin nine months of testing in September.

It plans to begin manufacturing the rest of the fleet in the second quarter of 2018 in order to meet Metrolinx’s delivery schedule.

The Montreal-based plane and train maker in 2010 won a roughly C$770 million ($591 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.

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

News of the Metrolinx notice of default was first reported by the Toronto Star newspaper.

Reporting by Alastair Sharp; Editing by Chizu Nomiyama and Chris Reese

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