Bombardier gets $5.3bn Tube deal
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Billions of dollars needed to modernize the London Underground.
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TORONTO, Canada (Reuters) -- Bombardier Inc. said Monday it had received a C$7.9 billion ($5.3 billion) contract over 15 years to modernize the London Underground.
The Canadian plane, train and snowmobile maker, which is in the midst of sorting out its battered finances -- it plans to issue stock and sell assets -- said the contract involves supplying 1,738 metro cars, signaling systems and providing maintenance.
The contract is provided by Metronet, a partnership of five global companies started in 1999 to modernize the London Underground subway system, which moves more than 3 million passengers every weekday.
Bombardier said Metronet is responsible for upgrading two-thirds of the London Underground infrastructure in a public-private partnership contract.
Metronet's members include Atkins, a technology consulting company; Balfour Beatty, an engineering and construction firm; Bombardier Transportation, a rail-equipment maker that is part of Bombardier; Seeboard, which sells gas and electricity; and Thames Water, a specialist in water and waste-water operations.
Montreal-based Bombardier last week reported a fourth-quarter loss of about C$1 billion and C$2.2 billion of annual writedowns related mainly to its aircraft-making division.
Metronet's five shareholders have invested C$812 million of equity in equal shares of about C$162 million each and have raised another C$6 billion on a non-recourse basis to the shareholders.
In the first seven-and-a-half years of the 30-year, public-private partnership, Metronet will invest more than C$16.2 billion to upgrade and modernize the London Underground, Bombardier said in a statement.
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