TTC report recommends Bombardier

Posted on April 28, 2009

A Toronto Transit Commission staff report recommended Bombardier Transportation Canada Inc., be awarded a contract worth a total of $1.22 billion (excluding taxes), for 204 new low-floor light rail vehicles (LRV), with a delivery date beginning in 2011.

The TTC purchased 248 streetcars in the 1970s and 1980s, and these vehicles now need to be replaced, as the aging fleets are nearing the end of their useful lives. The new LRVs will be low-floor, quieter, have features such as air conditioning for greater customer comfort, and be able to carry almost twice as many people as the TTC’s current streetcars do, according to the TTC. The new vehicles will also help address crowding on the TTC’s streetcar routes, and accommodate ridership growth.

Following a long process, the TTC’s recommendation to award the contract to Bombardier is based on price. Bombardier’s base price is $993 million. Another $293 million is factored in for the cost of spare parts, such as cab and bogie (wheel and axle) assemblies, HVAC, traction controller and motors, foreign exchange; escalating costs over the life of the contract; and any unforeseen changes required to the design of the new LRVs. These costs include GST. After a GST rebate, the total expenditure will be $1.22 billion.

One of the commercial requirements of the contract includes a minimum of 25 percent Canadian content. Before issuing the RFP, the TTC hired a consultant to review the market and determine the highest percentage of Canadian content the TTC could achieve, while ensuring more than one proponent would bid on the contract. Booz Allen Hamilton determined 25 percent would be achievable. Both proponents demonstrated they could achieve this target.

The contract, if awarded by the Commission, also allows for an option to purchase up to 400 LRVs for the new Transit City network. Awarding of the contract for the 204 replacement vehicles, however, is contingent on funding. As of today, no funding commitment has been made by either the provincial or federal governments. Bombardier’s bid price is guaranteed until June 27, 2009.

The delivery plan for the 204 LRVs calls for a prototype vehicle to be delivered to the TTC in 2011. LRVs for passenger service will begin to arrive in 2012. All 204 cars will be delivered by 2018. The TTC will also require a new maintenance facility for the LRVs at an estimated cost of $345 million, which is not part of this contract.

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