(The Canadian Press circulated the following article on April 29.)
MONTREAL — Bombardier Inc.’s rail and transit division has been selected to supply the electrical and mechanical portion of a rapid-transit contract in Taiwan.
Bombardier Transportation’s share of the project is valued at about $763 million — more than half the value of the total contract of $1.37 billion.
Kung Sing Engineering Corp., a Taiwanese construction company, was selected by the city of Taipei as primary contractor to build the new Neihu 15-kilometre rapid-transit line and upgrade the existing Mucha transit line.
Bombardier, as the prime subcontractor, will design and supply all of the electrical and mechanical systems for the 12-station Neihu line, including 202 rubber-tired vehicles
Bombardier will also retrofit the automatic train control system for the Mucha line, its 102 vehicles and some related equipment.
The company also said it had received “numerous expressions of interest” from potential financial and strategic buyers for the recreational products division which was put up for sale in March.
Bombardier confirmed the recreational products business which makes Ski-Doo snowmobiles, Sea-Doo personal watercraft, all-terrain vehicles and outboard motors will be sold as a single entity
But the company said it would not sell the business to a direct competitor “as this would require regulatory approvals, which may be impossible to obtain, or would result in unacceptable delays in closing a transaction.”
The Bombardier and Beaudoin families, which control the parent company’s voting shares, have indicated they may be minority investors in the spun-off business.
Regarding the Taipei contract, Bombardier said the first of three stages of construction on the Neihu line is expected to be completed in the summer of 2007, with all three stages to be done by the spring of 2008.
“The award of this contract is very significant, as it represents a major breakthrough for Bombardier into the Taiwanese market,” said Patrice Pelletier, president of Bombardier Transportation’s transit systems division.
Although parts of Bombardier’s aerospace division have been hurt by weakened demand for corporate jets, the company says demand for its regional jets hasn’t been hurt by an industry-wide slowdown. It also expects demand for rail and transit products to remain stable.