A decision by the TTC commission to award a $50-million contract for subway newsstands and cafés without any competition has some councillors asking questions and TTC chair Karen Stintz defending the sole-source deal.
The contract with Tobmar Investments International Inc., the current operator of the TTC’s 65 Gateway Newsstands, 2 cafés, 2 bakeries and 8 lottery booths, is for 10 years with a five-year extension.
It includes a $1.5-million signing bonus and a pledge to invest $1.45-million in improving the outlets.
The deal, approved Monday by the commission, comes after Tobmar approached the TTC last fall with an unsolicited offer to extend its existing contracts, some of which expire next year.
After that offer became public, other operators approached the TTC expressing interest in bidding on the business.
In awarding the sole-source deal, the commission rejected staff advice to issue a request for proposals for operating the outlets.
Councillor Denzil Minnan-Wong, a former TTC commissioner, said given the size and length of the deal the TTC should have asked for bids.
“It really looks bad. Have we learned nothing?” asked Mr. Minnan-Wong, referring to the controversy that erupted during the last term when council went against staff advice to award a long-term food concession contract in the Beaches.
Councillor Doug Ford said a 10-year contract is unheard of in the private sector. “It shows the gravy train’s full steam ahead with the chair of the TTC,” he said.
Defending the decision, Ms. Stintz said that in the past when the city has accepted unsolicited bids such as this one, it has benefited the organization. In the case of the Gateway deal, she said the operator came to the TTC offering an increase in rent and a signing bonus. Each of the stores is independently franchised and are all run by local owners, which is another advantage, she said.
TTC CEO Andy Byford said staff recommended taking bids “in the interests of transparency and public accountability.”