BUSINESS

World's most expensive streetcars?

COLIN CAMPBELL July 21 2008
BUSINESS

World's most expensive streetcars?

COLIN CAMPBELL July 21 2008

World's most expensive streetcars?

BUSINESS

COLIN CAMPBELL

Bombardier may be headquartered in Montreal, but there’s little doubt its favourite Canadian city these days is Toronto. Two years ago, the company was handed a $674-million contract to build subway cars for the Toronto Transit Commission (TTC). Now it has emerged as the only major company in the running for the world’s richest light-rail contract—a $1.25-billion project to build 204 streetcars for the TTC.

Bombardier’s only serious rival for the"3 contract, Siemens, inexplicably dropped out of the running last week. The only other competitor is a small U.K.-based start-up called TRAM Power, which observers gleefully point out has only ever made one streetcar (and it caught on fire).

For Bombardier, the Toronto contract comes on the heels of an impressive six-month run in which its stock price almost doubled. The project would be the icing on the cake— not in small part because Bombardier may succeed in selling the TTC the most expensive streetcars ever made.

At $1.25 billion, the budget for the project works out to almost $6 million per car—much higher than recent contracts for Edmonton and Seattle, which paid less than $4 million

per car. The TTC says its budget is higher because it includes things like operating, training and repair costs. Plus it needs custom cars that can handle tight corners and steep hills, says spokesman Brad Ross. Bombardier says the contract would most closely resemble a 46-car purchase made by Brussels in 2003. But that contract, which included 15 years worth of overhaul and maintenance, was worth only about $4 million per car.

With the competition still officially open, Bombardier isn’t gloating yet. But it may as well. Thanks to Toronto’s generosity, the company is on a roll. M