Amid anger at Bombardier Inc. over its repeated delays producing new streetcars for Toronto, the city's transit agency put off a high-stakes debate that could see the contract cancelled or the company barred from future deals.
Earlier Wednesday, Bombardier admitted that it would not hit its own – and latest – targets for streetcar delivery, sparking sharp criticism from the politicians who oversee the Toronto Transit Commission.
"There's always been a good story as to why things aren't happening," a visibly frustrated TTC chair, Josh Colle, said. "There's always been an even better story about how things are going to be corrected. I'm kind of past that point now. We need [our] streetcars."
The TTC has an order for 204 new streetcars that are due by the end of 2019. Bombardier insists it can make that deadline but has fallen behind repeatedly on its short-term targets.
Bombardier's latest problems come at an awkward time for the firm. Unhappiness over the repeated delays prompted the TTC board to request in June a report on options for penalizing the company.
"To say we're disappointed with Bombardier right now is an understatement," TTC commissioner and deputy mayor Denzil Minnan-Wong said Wednesday.
The staff report has a confidential attachment but the publicly released portion does not make an explicit recommendation to punish Bombardier. However, it does note that "the TTC reserves the right to either prohibit a company from bidding or not awarding a contract to a company with a poor performance history, based on documented contractor performance ratings."
The report also acknowledged that one option is to terminate the streetcar contract. Asked about that possibility, Mr. Colle hinted that it might have found support among some on the TTC board. And he characterized it as a dire option.
"I think those consequences would be extremely significant, so I think deferral is the best option right now," the chair told reporters after successfully moving a motion to punt the issue to the next board meeting in September.
"I think with [the promised delivery schedule] we just received this morning, we want to wait and see what the next month or so brings, and to leave some of those options on the table for us to take, so I just think it kind of leaves a few bullets in our chamber."
Bombardier has proposed multiple production schedules so far this year. The latest, only last month, said it would deliver a total of 27 new streetcars by the end of 2015. At the time, TTC staff concluded there was "a high risk" that target would not be met. The warning proved prescient.
"By the end of 2015, Bombardier will have shipped 23 vehicles to the TTC," the company said in a statement released Wednesday by spokesman Marc-André Lefebvre.
Fewer than 10 streetcars have been delivered since the new ones began to enter service a year ago. This falls well short of every production schedule Bombardier has proposed. The contract allows a 5-per-cent damages clause – about $50-million – to start in August if the 60th streetcar has not been delivered, as it won't be. But the company has already said it will argue that part of the delay was the TTC's own fault for changing the specifications.
The Bombardier statement Wednesday said the company had "taken a strategic step back" to overhaul its quality control. It is now promising four vehicles per month, beginning in September.
"We think, finally, we have a credible schedule," Andy Byford, CEO of the TTC, said. "The issue now is, the acid test is, will we start to see quality vehicles roll off that production line? Because we're going to hold them to that."