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TTC/Bombardier Controversy Continues



Welcome back from summer! Now that Labour Day is over, the TTC is back to a full service schedule. Frequencies are up, along with a number of student passengers. Plan your rush hours accordingly.

One issue that simmered over the summer, and which will likely boil over this September, is the question of who should supply the TTC’s next generation of subway trains. The TTC commission recommended going with Bombardier’s offer, after the company’s $499.3 million price tag and favourable reports by two respected consultants took the wind out of the sales of those who criticized the lack of an open bidding process.

Steve Munro was at the TTC meeting where the decision was made and he has criticisms on both sides of the debate. He spares no scorn for the “right wing” critics on council:

Councillor Minnan-Wong led off by saying that his constituents were unhappy with fares and service and implied that somehow if the contract were properly tendered we could change this. Here he mixes the operating and capital budgets in a way that I, as an advocate, could never get away with. The only possible value of saving money on subway cars would be to buy more buses, but council痴 right wing doesn稚 even seem to happy even with that.

Minnan-Wong implied that the consultants� reports were worthless because 田onsultants will write what you want�. This really shows how desperate a position he is in if an attack on well-respected industry reviewers is the best he can do. He went on to quibble that a 途easonable price� (the consultants� words) is not necessarily the 澱est price�. As for jobs in Thunder Bay, Minnan-Wong only cares about Toronto. He should think about this the next time he seeks financial aid from Queen痴 Park or Ottawa.

However, Steve did note that some questions remain on Bombardier’s bid:

The price widely quoted in the media from Bombardier is $499-million, but it does not include the following items:

  • 徹ther contract items� including a cab simulator, computer based training, tunnel profiling, spares, special tools and test equipment and a test track.
  • 鄭dditional options� including more spare equipment, a battery maintenance system and active route maps (electronic maps that show you where you are).
  • Taxes
  • Contract Security
  • Escalation
  • Costs for TTC and other parties (e.g. inspection services)
  • Contract change allowance
  • Wilson Carhouse Upgrade

To what extent, if at all, the price named by Siemens contained any of the above, we will never know.

These additional costs push the contract dangerously close to the $755 million “upset price” which was supposed to be a trigger beyond which the TTC would consider other options, like rebuilding the older subway cars, and there is still a question of how this order is to be funded. The TTC is counting on the federal government to rebate the GST owed on this contract (it is startling to consider that the federal government is still dinging municipal taxpayers 6% on all of their council’s capital purchases; and there is PST as well) as well as provincial commitments to pay things like contract insurance. As Steve Munro notes in the comments to his post:

I fully agree that TTC management have gotten away with misrepresenting project costs and options to the Commission for years. This was particularly true when the prevailing political winds were right-wing and good business practices should have prevailed. However, nobody seems willing to seriously houseclean, whether it痴 the so-called spendthrifts of the left or the self-appointed guardians of the public purse of the right.

However, he argues, the time to approve the current Bombardier contract is now, because opening up the bidding process in this case is unlikely to produce a substantially lower contract, and such a delay would let provincial and federal politicians off the hook for another year on this and other necessary purchases in the TTC’s looming capital budget shortfall.