ZURICH, May 29 (Reuters) - Canada’s Bombardier is losing money on trains it is delivering to Switzerland, the Alpine nation’s railways head said in a newspaper interview, as the $1.9 billion order has been delayed by glitches including faulty doors and software.
“For Bombardier, the FV Dosto (double-decker) trains are meanwhile a loss-making business deal,” Swiss Federal Railways (SBB) Chief Executive Andreas Meyer told the Neue Zuercher Zeitung (NZZ) in an interview.
“Bombardier will try to minimise these losses. But the contractual requirements are relatively clear and comfortable for us.”
Bombardier, which did not immediately respond to a request for comment about the interview, has cut its forecast for profit and revenue as its railcar unit struggles.
Without giving specifics, Meyer said provisions in the contract provided for financial penalties on Bombardier for not living up to its obligations. He predicted a potential disagreement over which side is responsible for what share of the damages.
“The conflict will come,” he said.
The 2010 order for 59 trains was delayed about five years. Currently, a dozen trains have been delivered. Bombardier has agreed to provide three additional trains for free to help compensate Switzerland for its long wait.
Meyer acknowledged that SBB was responsible for one year of the delay but said Bombardier was on the hook for the remainder, as well as the extended period it has taken to fix problems that have plagued the initial 12 trains that were delivered.
They finally arrived in early 2018 but could not be deployed on their planned longer-haul routes because they were not reliable.
The two sides have said they are now making progress on fixes, and this month announced five additional trains could enter service soon. (Reporting by John Miller; Editing by Mark Potter)