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Bombardier goes to court to protect Metrolinx light-rail car deal

A GO train outside Bombardier Inc.’s light-rail plant in Thunder Bay, Ont, on Nov 11 2014.

Fred Lum/The Globe and Mail

Bombardier Inc. has gone to court against Metrolinx, raising the stakes in a battle with the agency over the future of a $770-million order of transit vehicles for Toronto.

The move comes three months after the provincial government filed a formal notice of intent to quit the deal for 182 light-rail vehicles, saying that it had "concerns" the company couldn't meet its commitments.

Bombardier fired back Friday, filing a motion for an injunction in Ontario Superior Court that sought to suspend the agency's declaration that the company was in default of its obligations.

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The dispute centres primarily on vehicles for the Eglinton Crosstown light-rail line and the stakes are high for both parties. Other suppliers are circling hungrily and Bombardier, which has struggled to deliver transit vehicles to the Toronto market, needs to be able to show that it can be trusted. The transit agency and its government masters have to show that they can hold a supplier to account.

"I expect all of our suppliers to honour their contractual obligations and to perform professionally, and to recognize that there are consequences for failing to do so," Transportation Minister Steven Del Duca said in a statement Friday evening. "It has been clear for months that Bombardier has failed to meet its obligations as it relates to other critical transit projects. Metrolinx has been consistently escalating their concerns with Bombardier's performance."

The company is asking the court to declare that Metrolinx cannot terminate the light-rail contract until the validity of the transit agency's notice of default has been determined under a process laid out in that contract.

"We want to get to a negotiated agreement," Bombardier spokesman Marc-André Lefebvre said Friday, arguing that this would be impossible as long as the default notice exists.

Metrolinx shot back that the company should keep its focus on fulfilling its obligations, instead of going to court.

"We are … disappointed that they would take this legal step considering the long-standing relationship Metrolinx has with Bombardier on a number of fronts," the agency, which declined an interview, said in a statement. "Metrolinx's immediate first step is to review the application. We will not comment further at this time."

The company's position is that it had to go to court to counter "unjustified threats to terminate our contract" and that it was Metrolinx that was creating the problems.

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"Unfortunately, Metrolinx's actions have put the project in jeopardy," Bombardier says. "Since the contract was signed in 2010, Metrolinx has changed the scope, the timelines and the technical qualifications countless times."

According to Metrolinx, the company has had trouble delivering the prototype for its order, what the industry calls the pilot vehicle. The company disputes this, claiming on Friday that the vehicle was ready and Metrolinx was refusing to take possession.

With the matter now subject to litigation, Metrolinx would not specify its concerns with the vehicle. The Bombardier spokesman said that the agency has standards for the vehicle that are "impossible to meet at this stage."

"Bombardier's trains will be ready before Metrolinx's tracks are even available for testing," the company says. "Bombardier will deliver and meet its 2018 commitments. Eglinton Crosstown tracks will not be available for testing until 2019 and public service until the end of 2021."

The legal salvo comes only days after Bombardier secured a $372-million loan from the federal government to help support its aerospace division. Its rail operations have been under strain, though. The company announced in October that it would lay off 7,500 workers, about 10 per cent of its work force, with 2,000 of those cuts to come in Canada. Two-thirds of the overall cuts were to come from its rail unit.

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