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Bombardier disputes it faces fines for Swiss contract

File photo of Bombardier on a stock ticker.

Fernando Morales/The Globe and Mail

Bombardier Inc. says an article in a Swiss newspaper stating that the company faces at least $487-million (U.S.) in penalties for late delivery of 59 double-decker electric trains is "highly speculative" and "unwarranted."

The trains were ordered three years ago by Swiss Federal Railways (SBB).

Der Sonntag said on Sunday, quoting unnamed sources, that Montreal-based Bombardier's rail division could end up paying a maximum of $749-million if there are further delivery delays past 2015.

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The inter-city trains SBB ordered – at a total of 436 cars, the largest rolling stock order in the company's history – were supposed to have begun entering service beginning in December of this year. SBB announced last year they would be delayed up to two years as a result of adjustments for the disabled as well as construction challenges at Bombardier.

But Bombardier Transportation spokesman Marc Laforge said in an interview Monday that the delivery schedule was rejigged only because of the changes that had to be made to accommodate disabled travellers.

SBB was facing a court challenge in Switzerland from a group representing the disabled and ended up having to make the changes, said Mr. Laforge.

The original delivery schedule – between 2013 and 2019 – was therefore adjusted to between 2015 and 2019 in an agreement between SBB and Bombardier, he said.

"We're very much surprised by this highly speculative article which is unwarranted," Mr. Laforge said.

SBB has absorbed the extra cost for the disabled-friendly modifications and there are no penalties to Bombardier, he said.

"The rearrangement of the schedule was done with the customer. We were not facing a problem. The customer was," he said.

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SBB spokeswoman Lea Meyer said in an email message she cannot comment on "any specifics of the contract with Bombardier."

SBB said when it unveiled its order in 2010 that Bombardier beat out rival bids from Siemens and local firm Stadler Rail on four key assessment criteria.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

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