(Adds comment from Metrolinx)
TORONTO, April 19 Bombardier Inc's
C$770 million ($572.79 million) light rail contract with an
Ontario transportation agency cannot be canceled despite
delivery delays, a judge ruled on Wednesday.
In a victory for Bombardier, Ontario Superior Court Justice
Glenn Hainey accepted the plane and train maker's request for an
injunction to stop Metrolinx from terminating the contract. The
provincial agency, which manages public transportation in
Greater Toronto, sought in late 2016 to cancel the 2010 order
for 182 cars, complaining of delivery delays and poor execution.
"It appears to me that MTX (Metrolinx) is using the threat
of termination for negotiating purposes," Hainey said in his
He said it was also unrealistic to conclude another supplier
could provide the rail cars to Metrolinx by the 2018 deadline.
Bombardier, based in Montreal, said in a statement that it
wanted to now "find a clear path forward" with Metrolinx.
Metrolinx President and Chief Executive John Jensen said in
a statement the agency was reviewing the ruling.
"Nothing in today's decision changes our focus on delivering
high-quality vehicles on time," he said.
Metrolinx wanted to end the contract after questioning
Bombardier's ability to manufacture the cars on time and the
reliability of the first pilot vehicle, which was produced
The Berlin-based rail division, Bombardier Transportation,
is the company's most reliable cash generator. Bombardier is
again discussing a potential merger of the rail unit with
Germany's Siemens, people close to the matter said
Such a combination faces an uphill battle because of
antitrust issues, politics and concerns of who would control the
united company, industry sources have said.
Bombardier has also faced delays in Australia. A A$4.4
billion ($3.31 billion) contract to build 75 electric trains for
the Queensland state government has been delayed by accusations
of design faults, although it is not clear whether Bombardier is
($1 = 1.3312 Australian dollars)
($1 = 1.3443 Canadian dollars)
(Reporting by Allison Lampert in Montreal; Editing by David
Gregorio and Richard Chang)