Montreal-based Bombardier, Inc. has been awarded a C$2.23 billion contract by the Toronto Transit Commission to produce 204 low-floor light rail vehicles for Canada’s largest city. Bombardier said it expects to deliver the first cars to TTC by 2012. TTC’s purchase is said to be the largest LRV purchase ever in North America, and includes an option for even more cars, should Toronto’s proposed “Transit City” plan be implemented.
Bombardier’s bid was chosen over rival Siemens Transportation, but only after months of debate and dispute over TTC’s original bid process. The contract is expected to be formally voted on Monday by the nine Toronto city council members overseeing TTC, but approval is expected.
No funding is yet assured from either the federal governmentor the province of Ontario, though TTC officials say they believe such assistance will be forthcoming, possibly in amounts up to C$1.4 billion.
Last summer Bombardier was rebuffed by TTC after the manufacturer seemingly had won an earlier bid for the agency’s contract, beating out British manufacturer TRAM Power Ltd. TTC, however, questioned Bombardier’s earlier bid, citing design flaws, a claim Bombardier rejected. Last February Bombardier resubmitted its bid, challenged this time by Siemens.
TTC and Ontario province require that the new cars meet a 25% “buy Canadian” content threshold. Bombardier likely will do much of its manufacturing work at its Thunder Bay, Ont., facility, though it likely also will tap several of its European-based plants for the project.
Zhejiang Zheda INSIGMA Group Company Ltd. (INSIGMA), Hangzhou, China, has awarded Ansaldo STS USA a contract worth approximately $9.2 million for design and implementation of a new communications-based train control (CBTC) system on the Xi'an (Tianjin) Metro Line 2. The contract is part of a Strategic Alliance Agreement with INSIGMA. Ansaldo STS USA will provide system design, key system components, and vital safety software. INSIGMA will manufacture certain CBTC equipment under a technology license and perform application engineering.
The project will be done in two phases. The Xi'an Metro Line 2 will add 16.32 miles to the city’s metro system. Phase 1 will incorporate Beike Station to Expo Center Station, with a passenger ready date anticipated for September 2011. Phase 2 will cover from Fexiyuan Station to Weiqu South Station, with an expected in-service date of December 2012.
The complete Line 2 configuration will include 21 passenger stations, 22 trains, an operations control center (OCC), depot with test track, and a maintenance center and training center.
BNSF after the bell Thursday reported first-quarter earnings of 86 cents per share, down from $1.30 per diluted share in the first quarter of 2008, as freight revenue fell 20% in the comparable period, from $4.14 billion to $3.31 billion. BNSF’s operating ratio rose to 79.8% in the first quarter from 78.9% in the comparable 2008 quarter.
Wall Street analyst estimates exclusive of any one-time charges were for earnings of 96 cents per share on revenue of $3.68 billion.
The company attributed much of the revenue decline to a decrease in fuel surcharges of approximately $325 million and a $96 million charge in excess of amounts previously accrued related to the unfavorable coal rate decision.
The remaining variance, it said, was due to lower unit volumes as a result of the economic downturn, partially offset by improved yields.
“During the first quarter of 2009, BNSF’s focus on cost control and a variable cost structure enabled us to weather a difficult economic environment,” said BNSF Chairman, President, and Chief Executive Officer Matthew K. Rose. “BNSF continues to manage through the recession and is well positioned to take advantage of the eventual economic recovery."
Morgan Stanley analysts William Greene and Adam Longson agreed with Rose's assesment: "After years of lackluster productivity gains, BNSF's first-quarter 2009 was a breakout. We underestimated the labor cost opportunity and how successful BNSF had been in building a more variable-cost rail model (customers are more likely to own railcars). We've noted for some time that Western rails should outperform Eastern rails. BNSF's quarterly results were impressive no matter how we slice it. We are increasing our 2009 estimate of $4.60 to $4.90 as well as our 2010 EPS forecast from $5.15 to $5.35. Accordingly we are also increasing our price target by $5 to $70 while maintaining our Hold rating. We believe the company is taking the right steps to control costs during a weak freight environment while simultaneously improving service levels."