Thursday, December 21, 2017

Metrolinx, Bombardier come to terms

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Pilot Flexity Freedom LRV for the Kitchener-Waterloo LRT. Pilot Flexity Freedom LRV for the Kitchener-Waterloo LRT. Bombardier Transport

The long-standing dispute involving Ontario, Canada transit agency Metrolinx railcar supplier Bombardier over delivery of 182 light rail vehicles has been resolved, after six months of negotiations.

A new agreement calls for Bombardier to construct 76 Flexity Freedom LRVs, rather than the 182 contained in the original order. The contract’s value has thus been reduced to C$392 million from $770 million, and the new agreement contains severe financial penalties if deliveries are not on time.

The original order was placed in 2010, with the LRVs designated for the Eglinton Crosstown, Finch West and Mississauga Hurontario Street projects. The 76 LRVs in the revised contract will see service on the Crosstown, planned to open in 2021.

Metrolinx had become increasingly concerned about Bombardier’s ability to deliver LRVs on schedule. If the order was not complete when the Crosstown was due to open, the agency would have been liable for major financial penalties from the consortium building the LRT, up to $500,000 daily. The agency had sought to cancel its entire order, but was prevented by a court order from doing so.

Metrolinx has been concerned about its LRV order as Bombardier has fallen far behind schedule in its delivery of similar cars for two other, non-Metrolinx projects: a 203-unit order for Flexity Outlook streetcars for the Toronto Transit Commission (TTC), and a 14-unit order for Flexity Freedom LRVs for the Kitchener-Waterloo LRT. As a result, in May 2017, Metrolinx placed an order with Alstom for 61 Citadis LRVs, at $528 million as, in effect, an insurance policy for the Crosstown opening.

The situation with the TTC order has not been resolved.

The Alstom LRVs are somewhat larger than the Flexities, thus, fewer would be needed for Crosstown service. If the 76-unit Flexity order is completed in time for the Crosstown, the Alstom LRVs will be assigned to the Finch West and Mississauga LRTs, which are expected to open by 2022.

One of the incentives for Bombardier to accept the new LRV agreement was a promise by Metrolinx that the company would be allowed to bid on the lucrative operations and maintenance agreement for GO Transit regional/commuter services, when it comes up for renewal. Bombardier—the current contractor—had previously been restricted from bidding, and thus renewing its agreement, due to the dispute with Metrolinx. As part of the settlement with Metrolinx, Bombardier’s contract was extended by 18 months.

“Overall, the revised contracts do not change materially the size of our relationship with Metrolinx,” said Benoit Brossoit, President, Americas Region at Bombardier Transport. “We have always been resolved to find a clear negotiated path forward, one that delivers value to all parties, and foremost to the people of Ontario. Bombardier is fully committed to the Metrolinx project and to the people of the Greater Toronto Hamilton Area. I look forward to working with Metrolinx’s [new] CEO, Phil Verster, to advance this project and ensure that riders have the most efficient, comfortable and reliable transit system in the world.”

In another development, at a meeting of its General Issues Committee on Dec. 18, the Hamilton City Council formally dropped its request that the publicly owned local transit system, the Hamilton Street Railway, operate and maintain the city’s planned new LRT.

Instead, Council approved a compromise motion, that the overall ultimate successful contractor bidding on the project be requested to employee union members only, adhere to fair wage policies, and provide benefits comparable to HSR employees.

The latter motion was somewhat of a surprise, given that Metrolinx had reluctantly agreed to accept Council’s request for HSR operation, but not maintenance. However, it is possible that Council ultimately comprehended the significant costs to the city that would accompany such an arrangement.

In any event, the approved motion was simply a request, as City Council has no power over Metrolinx, a provincial agency. That said, Eric Tuck, President of Local 107, Amalgamated Transit Union (representing most HSR employees), pointed out that his union has successor rights concerning transit operations within Hamilton, and could consider court action against Metrolinx to protect them, if necessary.

Metrolinx will now have to decide whether or not it will reissue its Requests for Qualifications with the union conditions, or simply proceed with a Request for Proposals from interested contractors. The HSR project, in any case, has now been delayed by several months, and construction will not begin until 2019.

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