Bombardier has been awarded the $1.2-billion contract to replace Montreal's aging fleet of subway cars.

The Charest government announced Thursday afternoon that it has given the contract to Quebec-based Bombardier without a public tender.

The province is covering 75 per cent of the cost, while the Montreal Transport Corporation covers the rest.

Bombardier wasn't the only company that was interested in the deal. French company Alstom SA, the world leader in the manufacturing of subway cars, said it can build the trains sooner, safer and cheaper than Bombardier.

Both companies promised to build the cars in Quebec.

But the provincial government is asking the transit corporation to negotiate strictly with Bombardier, bypassing the usual public tendering process.

Economic Development Minister Raymond Bachand said Bombardier is the only Canadian manufacturer and so it is in the taxpayers' best interest to deal with that company.

Provincial bureaucrats say the government is not breaking any laws or trade agreements by not going to tender.

Alstom said it had a competitive bid that would have kept jobs in the province, and company officials plan to hold a news conference on Friday to respond to the decision.

Bachand points out that Thursday's news doesn't mean Alstom won't get another crack at the lucrative deal.

If the transit corporation can't hammer out a satisfactory deal within six months, he'll open up the process to other bidders.

Meanwhile, William Spurr, president of Bombardier Transportation for North America, said his company "is proud to have the opportunity to work once more on the Montreal metro, 30 years after manufacturing cars for Montreal."

Bombardier will get to work now, negotiating with the MTC for the renewal of metro cars for Montreal.

The design, manufacture and assembly of the fleet will take place at Bombardier's facilities in St. Bruno and La Pocatière, Que. Hundreds of workers at the plants can now expect secure work for years to come.

Bombardier is the biggest manufacturer of passenger railcars in the world.

The oldest of Montreal's metro cars have been in service for more than 40 years.