December 11, 2018 / 7:53 PM / 6 months ago

NJ Transit to decide on Bombardier order worth up to $3.6 bln

MONTREAL, Dec 11 (Reuters) - New Jersey Transit’s board will decide on Wednesday whether to award the first part of an order for up to 999 cars worth as much as $3.6 billion to Bombardier , a copy of the agency’s Dec. 12 agenda shows.

The board will vote on the purchase of 113 multilevel passenger vehicles, including passenger amenities and parts, for $669 million.

The deal also includes options for up to 636 vehicles for New Jersey and an additional 250 cars for the Southeastern Pennsylvania Transportation Authority (SEPTA) worth a total of $3.6 billion if fully exercised, according to an executive director’s report attached to the agenda.

The contract would be one of the largest orders for Bombardier’s North American rail business in years, if all options are exercised.

The agenda confirms a Reuters report in November, which said Bombardier was the preferred bidder for the contract.

NJT, the largest statewide public transportation system in the United States, with over 900,000 daily riders, has been criticized by commuters and public officials for delays and breakdowns. An audit published in October concluded that its operations were “inefficient” and “unsustainable.”

The Multilevel III Vehicles will feature new customer amenities such as USB ports, an infotainment system, LED lighting, power restroom doors, and a video surveillance system, the agenda report said.

Chinese state rail company CRRC Corp was also vying for the contract.

NJT had ruled out the competing bid from the Chinese company, although it was not immediately clear why. CRRC, the world’s largest train maker, has made inroads in the U.S. market, winning orders in Chicago and Massachusetts, but faces pressure from U.S. tariffs on Chinese steel and components.

The New Jersey order would be a boost for Bombardier, which in 2016 launched a turnaround plan for its rail operations in the Americas, following complaints by customers of delivery delays and manufacturing concerns.

Bombardier Transportation, the company’s largest unit by revenues, with a $34 billion backlog, aims to lower costs and boost margins by expanding its more lucrative signaling and services business.

Bombardier spokeswoman Maryanne Roberts called the NJT agenda items “an encouraging development and we look forward to the board’s decision tomorrow.”

A New Jersey transit spokesman referred Reuters to the board agenda.

Bombardier stock was up 5 percent in early afternoon trading. (Reporting By Allison Lampert; editing by Grant McCool)

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