10/16/2015 06:42 EDT | Updated 10/16/2015 08:59 EDT

TTC May Sue Bombardier Over Streetcar Delays

"The TTC board has lost all faith in Bombardier's public promises and ability to deliver this order."

Roberto Machado Noa via Getty Images
TORONTO, ONTARIO, CANADA - 2015/07/01: New Toronto street cars Flexity Outlook in evening street. City transportation streetcar. (Photo by Roberto Machado Noa/LightRocket via Getty Images)

MONTREAL — The Toronto Transit Commission, accusing Bombardier of "incompetence,'' says it may sue the Quebec plane and train maker over the latest delays in delivery of streetcars.

Commission chairman Josh Colle says the board will consider at its Oct. 28 meeting possible legal and financial actions against the company, including a $50-million claim permitted under the contract for late delivery.

He said Bombardier Transportation advised the commission Thursday that it won't meet a commitment made in July to deliver 23 new streetcars by year-end, including 20 available for service.

Given Bombardier's failure to meet its past commitments, Colle said the TTC has no confidence in this latest schedule.

"I am incredibly disappointed to learn that Bombardier, yet again, will not be meeting their commitments to deliver new streetcars to Toronto,'' Colle said in a news release.

"The TTC board has lost all faith in Bombardier's public promises and ability to deliver this order. We will not let Bombardier's incompetence hold our patient and loyal customers hostage."

The company now says it will deliver 19 cars by the end of 2015. Sixteen of them will be in service, including the 10 currently in operation.

The original $993-million contract called for 67 of 204 new vehicles ordered by the TTC to be in operation at this time.

Bombardier (TSX:BBD.B) blamed the delays on production issues in Mexico with the crimping of electrical connectors on six streetcars in production. The problem was identified during quality assurance reviews in Thunder Bay, Ont. The 3,000 wire connections in each of the cars will need to be examined and fixed.

"Bombardier obviously regrets that its performance on this particular project has been disappointing to the TTC, but we remain fully committed to continue to support our customer and deliver the streetcars as soon as possible," said spokesman Marc-Andre Lefebvre.

The company said it plans to extend production hours in the manufacturing sites assigned to the project by adding a third shift per day. Work within the facilities will be reorganized but no workers will be recalled.

Lefebvre said the incident doesn't signify a broader problem with its Mexican operations, noting it is involved in projects across North America. The previous production delays were caused by issues in Thunder Bay, Mexico and some external suppliers.


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