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Toronto firm fails to get TTC contract, may launch legal challenge

JEFF GRAY April 23, 2009

A Toronto-based firm disqualified from a multimillion-dollar contract to modernize the TTC’s subway signal system is protesting against the result and may launch a legal challenge.

Thales Rail Signalling Solutions Inc., based in North York but part of a French multinational corporation, sent a letter yesterday to the Toronto Transit Commission demanding the transit agency postpone its final decision, due tomorrow.

Kevin Fitzgerald, Thales’s vice-president of business development, said in an interview that if the TTC does not agree, the firm will not rule out legal action: “There are several options that we are considering.”

The contract is the first phase of a $300-million project to have computers essentially operate the Yonge-University-Spadina subway line, allowing trains to run more closely together and alleviate overcrowding.

TTC staff have recommended awarding the contract’s first phase to Alstom Transportation Information and Security Inc., an arm of Alstom, a French leader in urban transportation, for $57.6-million.

The TTC says Thales and Montreal’s Bombardier were disqualified because they failed to provide an “acceptable” letter of credit from a bank that the costs of the deal would be covered if the firm fails to deliver.

Mr. Fitzgerald said Thales has a firm commitment from its bank, and called the issue a “misunderstanding.” But TTC spokesman Brad Ross said the two disqualified firms submitted non-binding letters from their banks.

Bombardier said its officials would review the decision before commenting.

Thales, which employs about 900 people in the city, now owns the Toronto company that built the first such computerized signal system, for the TTC’s Scarborough Rapid Transit, and now installs systems for subways from London to Beijing.

It received a $12.4-million grant from the Ontario government for its technology earlier this year.

The TTC is preparing to unveil the winner tomorrow of a $1.4-billion streetcar deal, either the Canadian arm of Germany-based Siemens or Bombardier.

The process started last summer when the transit agency said the car that Bombardier first proposed would derail.




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