ON: GO Transit Refurbishment Contract Goes to Montreal Firm, not Ontario Northland

June 27, 2011
ntario Northland has lost out on a contract to refurbish GO Transit railway coaches to a Montreal-based company, even as it finishes a similar job for Metrolinx.

TORONTO - Ontario Northland has lost out on a contract to refurbish GO Transit railway coaches to a Montreal-based company, even as it finishes a similar job for Metrolinx.

The Canadian Auto Workers union said it was disappointed that Metrolinx awarded the five-year contract, valued at approximately $120 million, to refurbish 127 cars to CAD Railway Industries instead of Ontario Northland.

Brian Kelly, president of CAW Local 103, said he can't understand why Metrolinx would favour the Montreal-based firm instead of workers in North Bay, Ont.

''Extremely disappointed. Can't understand it,'' said Kelly. ''Doesn't make any business sense to us why the Ontario government would award a contract to a company based in Montreal when it could be done here.''

Ontario Northland workers are finishing a current contract to refurbish 121 GO Transit coaches, and the last eight of those cars will be delivered in the fall, Kelly noted.

But Metrolinx president Bruce McCuaig said CAD won the contract by providing the lowest bid, $2.1 million less than the bid submitted by Ontario Northland.

Global Railway Industries Ltd. (GBI:TSX), the parent company of CAD, said it was the lowest of three bidders, and expects the contract will be finalized on or before July 11.

''We are extremely pleased to be selected as the winning bidder in the tender process,'' Global president and CEO Fausto Levy said in a statement.

''We look forward to finalizing the contract documents with Metrolinx and commencing work on this project,'' he said.

McCuaig said he expected CAD would begin work refurbishing the cars in October.

Ontario Northland learned Friday that the ''competitive bid'' it submitted in the spring wasn't the lowest bid, said spokeswoman Rebecca McGlynn.

While McGlynn said there will be no layoffs at Ontario Northland related to the failure to secure the new contract, Kelly said he isn't convinced the 100 employees who work directly on refurbishing the rail cars won't be affected.

The Ontario Northland bid was more expensive than the CAD bid, but the quality of the work done at the refurbishment shop in North Bay is ''second to none,'' said Kelly.

McCuaig said the Ontario government has a competitive bidding process and the decision all came down to price when looking at companies that could provide a quality product.

''They had the lowest bid,'' said McCuaig. ''We don't penalize companies that are from out of province.''

It wasn't a question of Ontario Northland not doing quality work for Metrolinx in the past, said McCuaig.

''They've had the existing contract since 2004. They've refurbished about 121 cars for us under that bid and they did very good work,'' he said.

The union was told by management that the government will find work and funding for the North Bay workers, said Kelly, but he added the union isn't confident that will happen.

That work could include upgrading some Ontario Northland equipment, said Kelly.

Ontario Northland will continue to work on the existing contract and ''aggressively pursue other refurbishment projects,'' said McGlynn.

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