ST. JOHN'S, N.L. - The purchase of four Bombardier (TSX:BBD.B) waterbombers in exchange for aerospace investments is a "win-win" deal for Newfoundland and Labrador, says Premier Danny Williams.
He announced Wednesday the province will buy the new Bombardier 415 amphibious aircraft to replace four of its current fleet of six aging CL-215 waterbombers.
The new aircraft are valued at about US$120 million, with the first expected by April and the last by the summer of 2011.
In return, Bombardier will do business with local aerospace and defence firms and will invest in related training, Williams told a news conference.
"Bombardier has committed to delivering industrial benefits over the 10-year term of this agreement valued at $30 million," he said.
That's expected to create the equivalent of about 100 full-time jobs, including work on aircraft retrofits and installation of radar and sensor equipment.
Bombardier will also devote part of its investment to related training and education programs.
"This agreement represents yet another strategic and responsible investment in important infrastructure on the part of our government," Williams said. "And the end result will be better forest fire protection throughout the province."
Waterbombers are a crucial part of regional firefighting efforts and are used dozens of times a year when flames break out in dry weather. The current fleet's lifespan was expected to wane in the next four years.
But just six months ago, the government had said the waterbomber deal was off.
"We weren't going to pay an exorbitant price for them," Williams said.
The province walked away from the negotiating table before talks resumed.
"I don't want to get into the confidentiality side of the agreement because that affects Bombardier on an international basis. But suffice it to say, we went back and we got a better deal."
Keith Stoodley, a senior vice-president with Provincial Aerospace Ltd. in St. John's, said his company already does business with Bombardier.
The new deal is a chance to build on that foundation, he said.
"We see this as simply the key that opens the door. We have to go in and be competitive both in terms of a high-quality product, and an ability to deliver products on time and certainly to be price competitive. So it's still a competitive process, but certainly this is an opportunity.
"It's a significant infusion."