April 24, 2009

A staff report was made public today that recommends Bombardier Transportation Canada Inc. be awarded a contract worth a total of $1.22 billion (excluding taxes), for 204 new low-floor light rail vehicles (LRV), with a delivery date beginning in 2011. The Commission will discuss and vote on the staff recommendation at its meeting this Monday, April 27.

The TTC purchased 248 streetcars in the 1970s and 1980s, and these vehicles now need to be replaced, as the ageing fleets are nearing the end of their useful lives. They are not accessible, their reliability is steadily declining, and maintenance costs continue to rise. The new LRVs will be low-floor, quieter, have features such as air conditioning for greater customer comfort, and be able to carry almost twice as many people as the TTC’s current streetcars do. The new vehicles will help address crowding on the TTC’s streetcar routes, and accommodate ridership growth. The new LRVs will also have leading-edge technology for better reliability and performance.

In January 2008, a request for proposal was issued for new LRVs to replace the existing TTC streetcar fleet, with submissions due by June 2008. After reviewing two submissions received, it was determined by the TTC that neither submission met either the technical or commercial requirements outlined in the RFP. As such, the RFP was cancelled. The Honourable Coulter A. Osborne, the fairness monitor retained for the RFP, concurred with the TTC’s decision.

In August last year, the Commission approved a new process to ensure the TTC could secure LRVs that met the unique needs of Toronto’s track network. A structured multi-phase bid process was established. Three known international car builders, all with proven ability to manufacture a 100% low floor light rail vehicle, were invited to meet with TTC engineers and purchasing staff to ensure a common understanding of both technical and commercial requirements prior to bids being submitted.

Sealed bids were received by the TTC in February this year by two vendors, Bombardier Transportation Canada Inc. and Siemens Canada Limited. Both met all commercial and technical requirements. A recommendation to award this contract to Bombardier is, therefore, based on price. Bombardier’s base price is $993 million. Another $293 million is factored in for the cost of spare parts, such as cab and bogie (wheel and axle) assemblies, HVAC, traction controller and motors, foreign exchange; escalating costs over the life of the contract; and any unforeseen changes required to the design of the new LRVs. These costs include GST. After a GST rebate, the total expenditure will be $1.22 billion.

One of the commercial requirements of the contract includes a minimum of 25 per cent Canadian content. Before issuing the RFP, the TTC hired a consultant to review the market and determine the highest percentage of Canadian content the TTC could achieve, while ensuring more than one proponent would bid on the contract. Booz Allen Hamilton determined 25 per cent would be achievable. Both proponents demonstrated they could achieve this target.


TTC vehicle engineers worked closely with the vendors throughout the structured multi-phase bid process to ensure that the LRVs being proposed would meet the technical requirements of navigating Toronto’s existing streetcar network. The TTC’s engineering staff is satisfied that Bombardier’s proposed car will operate safely in Toronto.

The contract, if awarded by the Commission, also allows for an option to purchase up to 400 LRVs for the new Transit City network. Awarding of the contract for the 204 replacement vehicles, however, is contingent on funding. As of today, no funding commitment has been made by either the provincial or federal governments. Bombardier’s bid price is guaranteed until June 27, 2009.

The delivery plan for the 204 LRVs calls for a prototype vehicle to be delivered to the TTC in 2011. LRVs for passenger service will begin to arrive in 2012. All 204 cars will be delivered by 2018. The TTC will also require a new maintenance facility for the LRVs at an estimated cost of $345 million, which is not part of this contract.

Finally, the TTC retained two fairness monitors to oversee this structured multi-phase bid process. The Hon. Coulter A. Osborne, former Associate Chief Justice of Ontario and Integrity Commissioner for Ontario, reviewed the process regarding commercial requirements, and Mr. Walter R. Keevil, the Chief Rail Equipment Engineer for Chicago Transit Authority, oversaw the process for technical requirements. Both fairness monitors praised the TTC for its management of this RFP process. Their reports are attached as appendices to the staff report.

The TTC looks forward to meeting the transit needs of the people of Toronto with new streetcars. The city has a long and proud history of light rail, and many Torontonians provided input to the TTC two years ago at the CNE and through the website, mynewstreetcar.ca.

If this report is approved and funding secured, this new LRV will be the fourth generation of streetcar built for the TTC in the last 88 years, following the Peter Witt car (1921-1963), the Presidents’ Conference Committee car (PCC, 1938-1995) and the CLRV and ALRV (Canadian/Articulated Light Rail Vehicle, 1978-present and 1987-present, respectively).

Media Availability

TTC Chair Adam Giambrone will be available to speak with media at 12:30 p.m. today at TTC head office, 1900 Yonge St., 7th floor (Davisville Subway Station).

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