Bombardier may lose Montreal Metro deal...Bombardier, Quebec mull options on Montreal Metro
10/01/08
TORONTO (Reuters) - Transport giant Bombardier Inc said on Thursday it is weighing its legal options after Quebec's Superior Court ordered the Montreal transit commission to allow French group Alstom SA to bid for a C$1.2 billion ($1.2 billion) contract to replace subway cars in the Montreal Metro system.
In 2005, former Quebec Industry Minister Claude Bechard announced that the Quebec provincial government would award the contract for 336 new subway cars to Bombardier, which is based in Montreal, without going through a competitive bidding process.
Alstom appealed that decision, and on Wednesday said the Superior Court of Quebec had ruled in its favor.
"We're very pleased with the ruling, we argued all along that the bidding process should have been transparent. Now the ball is the government's court," said Pierre Renault, spokesman for Alstom Canada.
Both Bombardier and the Quebec government said they are considering their legal options.
"This is a very technical ruling and the government has 30 days to appeal, if we choose to do so," said Philippe Archambault, spokesman for Quebec's attorney general.
Societe de Transport de Montreal spokeswoman Odile Paradis said the transit commission wanted to have a competitive bidding process all along, but its hands were tied.
"At the time the Quebec government told us to negotiate directly with Bombardier so we complied. They're (the government) financing 75 percent of the project," Paradis said.
In the provincial legislature, former minister Bechard represented a rural constituency where a Bombardier Transport plant was set to build the 336 rubber-tire MR-63 cars for the Montreal Metro. The plant employs 600 people in La Pocatiere, a town with a population of 4,500.
Bombardier said the ruling has no immediate effect on its operations.
"This was never on our backlog, so from a strictly financial perspective the impact is that we had never gotten the contract," Bombardier spokesman Dave Slack said in a phone interview.
Bombardier shares were down 10 Canadian cents, or 1.74 percent, at C$5.63 early on Thursday afternoon on the Toronto Stock Exchange