The London Underground transit system is looking for a new solution for a major signalling upgrade that Bombardier Transportation has been working on under a 2011 contract.
Bombardier Inc. (TSX:BBD.B) and Transport for London each announced Tuesday that they had reached a joint release agreement, paving the way for London's transit operator to re-let the contract.
"Bombardier was awarded a contract in June 2011 following a competitive tender process, and has already undertaken a great deal of preparatory work," Transport for London said in its statement.
"A new unified control centre has already been constructed, which means the project is ready to be advanced further."
"However due to the complex nature of the network and the nature of the work to be carried out over the next five years, LU and Bombardier have taken the decision that LU will re-let the contract and continue the works with another contractor in the New Year."
The London Underground said Bombardier will continue to supply S-Stock trains for the four affected lines – Circle, District, Hammersmith & City and Metropolitan lines.
Bombardier Transportation didn't provide a detailed reason for the change but a London newspaper reported the company's signalling system had proved to be incompatible with the infrastructure.
The Telegraph's online edition reported that Bombardier is expected to receive between 80 million and 85 million British pounds for work completed, the equivalent of C$140-million and C$150-million.