GTA COVER STORY
A streetcar now for city of tomorrow
http://www.thestar.com/unassigned/article/620580
Finish line near for two contenders in high stakes race to supply the TTC's wheels for Transit City
Apr 18, 2009 04:30 AM
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TESS KALINOWSKI
TRANSPORTATION REPORTER
After years of anticipation, the Toronto Transit Commission will announce later this month whether Bombardier or Siemens Canada has won a record-breaking contract to replace its aging streetcars.
At $1.25 billion to $3 billion, the buy will be the biggest ever by a Canadian city, and among the largest light-rail-vehicle orders in the world.
More than big money is riding on the deal. This contract is all about the two urgent urban concerns of 2009: the jobs of today and the city of tomorrow.
It could prop up the foundering economy of Thunder Bay, where Bombardier has a plant.
Or it could mean 200 new jobs in the similarly struggling Toronto region, where Siemens has pledged to build a plant if it gets the deal.
The TTC believes the light rail vehicles (LRVs) can reform the habits of car-tethered suburbanites and ease the long, depressing commutes of low-income workers living in underserviced areas.
Politicians and planners believe neighbourhoods will be transformed when the LRVs begin operating on an extensive system of light rail lines dubbed Transit City, as well as on the 11 existing streetcar routes.
Whichever supplier is chosen April 27, the 204 new cars – with potentially 364 more to fully outfit Transit City – will be quieter and sleeker than the 248 iconic clunkers that now lumber along Toronto's thoroughfares.
"Customers will find (them) more comfortable than the current fleet," said Stephen Lam, TTC superintendent of light rail engineering, citing "their modernistic and roomy interior design, seating arrangement, panoramic windows, full accessibility and user-friendly features, and air-conditioning."
Now it comes down to who will build them, and where – and whose sinking economy will benefit.
Both Bombardier and Siemens say they offer proven technology and reliable LRVs. The bids are based on Bombardier's Flexity Outlook and Siemens' Combino Plus models. Similar in design features, both are excellent, 100 per cent low-floor cars, Lam says.
But the winning bidder will have to customize its model to Toronto's unique requirements, so TTC engineers have understandably focused on technical aspects. Both makers had to prove their vehicle could handle Toronto's steep hills and uncommonly tight turning points.
The other key requirement: 25 per cent, or about $300 million, of the fleet order has to involve Canadian parts and labour.
That's not much compared with job-protection policies abroad, says John Cartwright, president of the Toronto and York Region Labour Council. The U.S. demands 60 per cent American content.
"We believe the TTC could easily have (a major supplier) providing those streetcars at 50 per cent content," Cartwright said. He said raising the Canadian portion would obviously be easier for Bombardier, "but if Siemens does want to commit to a long-term economic investment in Ontario, then it should be just as favourable to them."
Both have set up plants elsewhere to meet content requirements.
The TTC says it would raise the 25 per cent requirement if it later exercises the option to buy 364 more cars for Transit City. (TTC funding even for the initial order of 204 is not yet in hand, but the province has already pledged to outfit the first two Transit City lines.)
"With the Thunder Bay plant and the parts network we have established, we could certainly entertain higher levels of (Canadian) content," said Bombardier spokesperson David Slack.
Some parts would be Canadian-made but supply lines would remain "multinational," said Slack.
Siemens, which has its Canadian headquarters in Mississauga, says it would have no problem meeting the 25 per cent mark. It has been talking to the province about sites for an assembly plant employing about 200 workers plus engineers.
Its preference is to stay in the GTA. And on that score, Siemens has new statistics on its side: Three-month seasonally adjusted figures in March showed that at 8.8 per cent, the Toronto area's jobless rate has outpaced Thunder Bay's 8.6.
The workforce is here; the client is here, said Mario Peloquin, Siemens' director of mobility.
But the Canadian content rule is more complex than it appears.
"It's a tough number for any company because of the strict method of calculating the 25 per cent – it's 25 per cent of the price to the customer," said Peloquin, who notes there are costs attached to opening a plant. "It sounds low, but if you brought it up to 80 per cent, nobody could achieve it" and still make the LRV affordable, he said.
But even 25 per cent is enough to secure up to 250 jobs for 10 years, according to the CAW, which represents the workers in Thunder Bay.
The spinoff potential is critical, said Thunder Bay Mayor Lynn Peterson. "With a contract that big, it could be up to 800 jobs – that's an enormous boon to the community."
The city of 128,000 has lost 2,000 jobs in the forestry sector alone. "Like anybody else, we're waiting and hoping (Bombardier tenders) are successful," Peterson said.
She's been promoting the bid to anyone who will listen, including Toronto Mayor David Miller. "He knows how important it is to Thunder Bay. He knows what I'm going to say when he sees me coming."
She also knows Miller is bound by the TTC's careful procurement process, which is being scrutinized by fairness monitors to avoid a repeat of the 2006 controversy in which new subway cars were sole-sourced to Bombardier.
And the rivalry goes on. Siemens and Bombardier are both in the running to build an automatic signal system for the subway. That's expected to be announced on the same day as the LRV deal: April 27.
