Alstom-Bombardier fights for Metro contract
Montreal Transit Corp. may be forced to reopen call for tenders
The consortium formed by Montreal-based Bombardier Transportation and French company Alstom went on the offensive Thursday, in an attempt to preserve its grasp on the contract to build new cars for the city's Metro system.
In January, the Montreal Transit Corp. announced it was increasing its order from 342 cars to a total of 765 cars with an option to order 288 more and put a stop to talks with Bombardier-Alstom. The corporation said the modification of the original call for tenders obliged it to issue a notice of intent giving other companies 30 days to signal their interest.
Following the deadline, both Chinese-based company Zhuzhou Electric Locomotive Ltd. and Spanish firm Construcciones Y Auxiliar De Ferrocarriles (CAF) signalled their interest in the $3 billion contract.
Both companies said they could meet the Quebec government's requirement for local content.
The Montreal Transit Corp. (STM) officially rejected the bid from Zhuzhou, which had proposed to build the cars with steel wheels, as opposed to the rubber tires currently used by the Metro.
But the STM is still waiting for the results of an expert's report to see whether CAF qualifies to enter the bidding, said spokeswoman Odile Paradis on Thursday.
If it does, the transit authority will be forced to reopen the call for tenders, she said.
New tendering process costly
On Thursday, the Bombardier-Alstom consortium published a full-page newspaper ad warning that reopening the bidding process could set back the plan to replace the aging cars by years.
The ad plays on Quebecers' sense of ownership of the company, saying that jobs and other economic spinoffs are at stake.
"Two thousand workers and 165 suppliers [are] ready to start," the ad in La Presse reads.
The bidding process was fair and should be considered a done deal, said Bombardier spokesman John Paul MacDonald.
"By reopening a competition you're … putting a $17 million burden on the taxpayer … because that's how much your bidding process costs," said MacDonald.
But Zhuzhou spokesman Glen T. Fisher said the bidding process has been flawed from the start, when in 2006 the Quebec government announced it was awarding the contract to Bombardier without a tendering process. A call for tenders was finally launched in 2008 after Alstom threatened legal action.
In the end, the Bombardier-Alstom consortium was the only bidder.
"Why would anyone spend a few million dollars preparing for a tender if there was no chance of winning it?" said Fisher.
Zhuzhou is threatening to take its case before the courts after its bid was rejected by the STM in March.