Bombardier wins C$1.2 bln Toronto streetcar bid

TORONTO (Reuters) - Toronto's transit authority confirmed on Monday it will award a C$1.2 billion ($980 million) contract to build a fleet of streetcars to Canadian transportation giant Bombardier Inc BBDb.TO.

Bombardier will provide 204 streetcars to Toronto, Canada’s most populous city. The city has an option to purchase another 400 streetcars for the second phase of the contract.

On Friday, a Toronto Transit Commission staff report formally recommended that a bid by Bombardier be accepted over a bid from Siemens Canada Ltd SIEGn.DE. Commission members voted on Monday to accept the recommendation.

Paul Pugh, president of Canadian Auto Workers local 1075 at the Bombardier plant in Thunder Bay, Ontario, where the streetcars will be built, said the initial order will mean up to 300 jobs and provide work for up to eight years.

“It’s huge, because the Thunder Bay economy has been devastated because the base of the economy is forestry and mining, and there are simply no jobs left in those sectors,” he said.

The Ontario government and the government of Canada are expected to pony up two-thirds of the cost of the project.

A prototype vehicle is to be delivered in 2011, with all 204 cars delivered by 2018. The TTC will also require a new maintenance plant for the streetcars, estimated to cost C$345 million. The plant is not part of the contract.

Bombardier’s shares slipped 1.7 percent to C$3.58 on the Toronto Stock Exchange on Monday.

($1=$1.22 Canadian)

Reporting by John McCrank; editing by Peter Galloway