Bombardier Rival Siemens Drops Bid For $3B Contract

Toronto's mammoth streetcar replacement contract appears headed to Canadian rail giant after its main rival, Germany's Siemens AG, pulled out of bidding at nearly the last minute.

TORONTO (CP) -- Toronto's mammoth streetcar replacement contract appears headed to Canadian rail giant Bombardier Inc. after its main rival, Germany's Siemens AG, pulled out of bidding at nearly the last minute.

The Toronto Transit Commission closed the proposals process for the replacement program, which could eventually cost more than $3-billion and require some 600 vehicles, on Monday.

The initial requirement is for 204 streetcars at a price of about $1.2-billion.

Only Bombardier and a small British manufacturer, TRAM Power, submitted bids.

TRAM Power's principal product is a prototype light-rail vehicle, and as such it has vastly less global experience -- and local political clout -- than Bombardier, which was anticipating a tough fight with Siemens for the contract.

With Siemens out of the way, Bombardier is now poised to fill a second huge transit vehicle order without major competition, after having been selected without open bidding to build $674-million worth of new TTC subway cars at its Thunder Bay, Ont., plant in 2006.

Siemens had claimed that it could have provided the subway cars at significantly lower cost had it been allowed to bid.

Dirk Miller, a spokesman for Siemens, said that the company decided not to try for the streetcar project two weeks ago, despite considerable preparatory work, including a prominent ad campaign aimed at winning Toronto residents over to its Combino family of light rail vehicles.

He declined to elaborate on why Siemens had chosen to pass up its chance at one of the world's largest rail vehicle orders, saying only that "finally we decided it was in our better interest not to bid."

Toronto's effort to replace its much-loved but aging fleet of "red rocket" streetcars, and provide new vehicles for a major planned expansion of its light-rail network, has been controversial almost from the beginning.

Last year the TTC angered some manufacturers by announcing that it would require new streetcars to be 100-per-cent wheelchair-accessible, and by setting a minimum proportion of 25-percent Canadian content for their design and construction.

Critics suggested that both requirements were designed to fix the bidding process in favour of Bombardier -- which has fully-accessible vehicle models and would build streetcars in Thunder Bay -- and against foreign manufacturers.

TTC chairman Adam Giambrone said Tuesday that he is not concerned about Siemens's withdrawal leading to a raw deal for the city.

He said that since the TTC will effectively be buying off-the-shelf models, "we already know what the prices are internationally."

Bombardier did, however, submit its bid under the assumption that it would have to compete with Siemens.

A spokesman for Bombardier said Tuesday that he had "no idea" that the German company had dropped out.

The sealed envelopes containing Bombardier and TRAM Power's exact prices will not be opened until later this year, after TTC officials examine the technical components of the bids.

Labour officials, who lobbied for even higher Canadian content requirements for new streetcars, were ecstatic at the news that they are likely to be built by a Canadian company.

Buzz Hargrove, president of the Canadian Auto Workers union, said he was "thrilled."

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