Metronet Subway Project

Montreal, Canada: (Apr-01-08) Bombardier Inc. has been embroiled in a legal tangle over the restructuring of the Metronet subway partnership in London, England. In a recent announcement, the company stated that it will pay US$189 million to the subcontractor to resolve the dispute. Bombardier said that the agreement will see the value of its rail division's order backlog cut by $2.6 billion as it extricates itself from the dispute. As part of the deal, sources at Bombardier said that the Bakerloo, Central and Victoria program, which involve new Bombardier trains and signaling from Westinghouse Rail Systems Ltd. (WRSL), will go ahead and be completed, as had been originally planned.

Under the terms of the settlement agreement, the subsurface lines upgrade, which was less advanced, will be reduced in scope. And the signaling portion of Bombardier's subsurface lines work, currently subcontracted to Westinghouse Rail Systems, would be transferred to Metronet and renegotiated. The company stated that the 95 million pounds (US$189 million) payout is being made to compensate WRSL for the reduced size of their signaling contract. It added that this payment will have no material impact on Bombardier's financial results. [CANADIAN BUSINESS: BOMBARDIER PAY $189 MILLION IN LONDON TUBE SETTLEMENT ]

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Published on Apr-2-08