Chinese train company says its Montreal Metro bid would save taxpayers billions

The Canadian Press ~ The News
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MONTREAL - A Chinese railway manufacturer is proposing to save Quebec taxpayers billions of dollars and create up to 1,000 jobs in the city if it beats out a Bombardier-Alstom consortium for the contract to build new subway cars for Montreal's Metro system.
Zhuzhou Electric Locomotive said Monday it would assemble the subway cars in a Montreal plant in order to respect the requirement that 60 per cent of the content be Canadian. Components and engineering would likely come from China.
"We can do it for less than half of what Bombardier has been quoted as offering and it doesn't matter if it's 300 cars or 1,000 cars," Glen Fisher, president of Zhuzhou's Canadian partner CPCS Technologies Canada, said in an interview.
He said the company is prepared to take Montreal's transit authority and the Quebec government to court if it continues to limit bidding to manufacturers of subway cars using rubber tires.
The requirement unfairly favours Bombardier (TSX:BBD.B) and France's Alstom, the only two firms that make rubber-tire subway cars, he said.
Fisher said there's no reason why steel wheels couldn't be used in the Montreal subway. Tracks are already in place to accommodate emergencies and trains are currently switched on steel tracks. Zhuzhou wants to deliver a prototype to run on Montreal's subway track to demonstrate that steel wheels can do an even better job than what is currently being used.
But lawyers for the Societe de transport de Montreal recently notified the firm that it won't allow bids using steel-wheeled trains. Officials with the transit agency didn't return calls seeking comment.
"If we can't supply steel wheels to them and they go ahead with the tires, Montreal is going to be burdened with a very expensive system that is, in the opinion of many people, obsolete now and may even be illegal in 40 years time because of the pollution and the energy waste from the rubber tires," Fisher added.
He said subway systems in Paris, Mexico City and Manilla have added some steel-wheeled cars to their rubber-tired fleets.
The Chinese cars could be added alongside existing cars until the entire fleet is updated within two years, although Fisher said the transit authority may want the timeline delayed.
Fisher said he fails to understand why the Bombardier consortium is seeking what he believes is as much as $2.5 million more than the $1.5 million per car it was paid in 2007 to deliver 400 cars to Chicago.
"Bombardier could build them for that price and we think we can even beat Bombardier on a lower price and make them 60 per cent in Montreal."
While it may be politically difficult to take on a Quebec business icon like Bombardier, Fisher said his Chinese partners have the technical ability to deliver a quality product.
Cameron Doerksen of Versant Partners recently said he sees the Bombardier-Alstom consortium as the frontrunner given its previous selection as preferred bidder and its manufacturing presence in Quebec.
Through CPCS Technologies, Zhuzhou has signed a tentative agreement with the owners of the Dominion Bridge plant where automated trains were built for Toronto's Pearson Airport.
The company proposes to use 18,000 to 27,000 square metres of space in the building's monstrous indoor bays that were once used to build steel bridges.
Between 750 and 1,000 people would be hired to assemble 1,050 cars (including options) in a deal estimated to exceed $3 billion. Bombardier proposed to assemble its subway cars in La Pocatiere, 140 kilometres northeast of Quebec City.
The Chinese firm may also use Montreal as a base, possibly in conjunction with Chicago, to supply high-speed train equipment and electric passenger and freight locomotives that will be required for proposed new railway networks in the U.S.

Organizations: Bombardier, Metro inc., Bombardier-Alstom CPCS Technologies Canada TSX Alstom Societe de transport de Montreal Versant Partners Dominion Bridge Pearson Airport

Geographic location: MONTREAL, Quebec City, China France Chicago Paris Mexico City Toronto La Pocatiere U.S.

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Recent comments

  • peter
    February 24, 2010 - 23:45

    The question begs to be asked, would the Chinese allow a Canadian company into their country to bid on a contract like this? I don't think so. Everything is a one way street with the Chinese. They want to sell to us but will not buy anything back from us except our natural resourses. Don't let them in.