This month we had an opportunity to see mockup of new streetcar that will be coming to Toronto in near future, we hope. The vehicle is sometimes referred to with more up-to-date label, as LRV. It stands for Light Rail Vehicle. For those who love public transit and look forward to our future, seeing this mockup is a must.
Toronto is one city in North America that had some audacity to keep our streetcars in operation, while some other cities were ripping the rails and capitulating to the automobile and bus industry. Even in Montreal, a city that prides itself with strong European character, it broke with Euro tradition and discarded its streetcar system in August 1959. Ottawa did the same in April 1959. Our streetcars came under fire in sixties and seventies, when Toronto Transit Commission contemplating scraping them and replacing with buses. It was a strong public pressure from Toronto citizens that saved our system. The Commission gave in the pressure, but suddenly had to deal with practical and economical solutions. City rail transit has its life span and has to be replaced and updated at one point. While the electric trams manufacturing had its edge in North America, it simply disappeared in fifties. Since there are no local manufacturers, how do you keep replacing? Ontario only had manufacturer for subway cars in Thunder Bay.
Ontario Government had some vision of the future in urban rail transport and set up Urban Transit Development Corporation to develop rail systems and sell it world-wide. This corporation designed and built our present Scarborough RT or ICTS (Interim Capacity Transit System). The cars that are smaller than traditional subway cars are propelled by Linear Induction Motor (LIM). It was a new and untried technology, and only two other buyers were found. City of Vancouver for SkyTrain, and as UrbanMover in Detroit, USA. Other CANADIAN CITIES LIKE Edmonton and Calgary planned to build rail system, but opted for German style LRT from Siemens. In seventies, Urban Development Corporation also designed and built our present streetcar, CLVR (Canadian Light Rail Vehicle) and few years later its bigger sister, ALRV (Articulated Light Rail Vehicle). It is a stretched version of CLRV. Both vehicles have become symbols for Toronto. They ride old rail network, dating back to 19th century. It is referred to as the legacy network. Unfortunately, no other cities in North America were eager to buy our streetcars or ICTSs, and that spelled the end of UTDC.
Ontario Government decided to sell the company to a private company in 1986. It sold it to Lavalin of Quebec that sold the assets to another Quebec Company, Bombardier. First subway line opened in Toronto in 1954, and the trains were built in Thunder Bay, Ontario by company Hawker Siddeley Canada. It was a division of British hawker Siddeley Group. Government owned, and Kingston-based UTDC acquired Hawker Siddeley in nineties. Bombardier Company bought UTDC and hawker Siddeley. The previous company and the plant in Thunder Bay had a long relationship with Toronto Transit Commission. It has been recognized as favored supplier to TTC. Toronto Transit Commission (TTC) is a public transport agency that was established in 1954. It operates subways, streetcars and buses in Toronto. The Commission is governed by councilors who are elected as municipal councilors, but appointed to TTC. Council is just a, municipal, political, group. It reflects prevailing political directions and those usually change with every municipal election.
In 2005, Toronto Transit Commission handed over an order to Bombardier for 234 new subway cars. It was a closed order negotiated with the company, with no public tender. TTC came under a strong criticism. Biggest competitor Siemens claimed that it could have saved TTC at least $ 100-million on the purchase. It became apparent that TTC can no longer hand over any future orders. Without letting them win it in public tender.
Unlikely city in USA, Portland in Oregon introduced first modern streetcar in North America in more than 50 years. It was the low-floor Astra model built by Skoda-Inekon consortium in the Czech Republic. This vehicle became a model to emulate by TTC. Portland already had LRT built by Siemens that was connecting Downtown Portland with the Airport. However, LRTs are traditionally built for long and straight stretches with gentle curving. They can’t handle 90 degrees turns are not suitable for mixed road traffic. Streetcar can ride and LRT track, but not vice-versa. Many people have a habit to use LRT or LRV for any modern looking rail vehicle.
Our streetcars are nearing the end of their life and during 2006, TTC issued a Request For Information (RFI) that was sent to all builders of the record. The Commission held a preliminary discussion with them shortly after. There were several options that they were considering. Refurbishing and modernizing old CLRV to extend their useful life. This option had to be scrapped since new legislation provided for wheel-chair accessibility on all. After analyzing different options, TTC decided in favor of 100% Low-floor vehicle. Which design is better or more modern? 70% low-floor or 100% low-floor? There is no straight answer. Both designs have their pluses and minuses. We live in an environment where litigation for trivial matters is order of the day. The Commission most likely wanted to prevent future problems with somebody who trips or falls over a step, inside of the car. Commission issued a final Request For Proposal (RFP) in January 2008 to all builders that have pre-qualified. Documents issued called for 100% low-floor and $ 1 000 000.00 security deposit to be enclosed with the bid. Major unexpected change was a requirement of 25% Canadian content on the cars. There were many unique technical requirements that builders had to fulfill making tender a major design obstacle. Our rail-track has a wide gauge, ability to ride steep hills, sharp turning radiuses of 11m and single-point switches.
When public tenders of such large sizes are issued by Government run agencies, they are always instruments of political objectives. Politics including the backroom one is always decisive in the tenders, and technical characteristics and price are relegated to the side rail. Politicians must be re-elected, and public purchases are handy gears to look good in front of voters. Most politicians are not business people, and costs are not on their mind. Extra costs can be covered with extra taxes. Previous administration led by Mayor Miller had the tax-and-spend mentality and introduced several unpopular taxes. It was the land-transfer-tax and car-registration fee. Streetcar procurement project became politicians’ tools. TTC hired consultants to advise them how much of Canadian content can be required from overseas builders, without causing unnecessary hardship and them losing interest in the assignment. The consultants returned with a report suggesting that no more than 10% of Canadian content can be requested.
Politician-councilors did not put much weight on the consultants’ report and changed the amount to 25%. New amount was incorporated into Request For Proposal (RFP). It was a complex and detailed set of documents but supplemented still by number of amendments. The documents specification talked about a “preferred company.” The meaning was clearly implicit. The tender closed in June 2008, and only two envelopes were handed in. After so much effort with designing of tender, the end became just an embarrassment. Only two envelopes were handed in. One was from a British upstart company that has never built a streetcar yet. It was the reason for being disqualified from the bidding process. The company was not commercially compliant. Transit authorities are not risk-takers and purchase only proven technologies that are in revenue services by other transit authorities. Surprisingly enough, the Commission also decided that Bombardier’s bid does not qualify since it is strictly no-compliant with requested specifications.
There is no doubt that long and costly process ended like a fiasco for the Commission. It was also a disappointment for Torontonians anxiously awaiting good news about new vehicles for our streets. The Commission had to re-open the process. They approached the builders with fact-finding questions. They wanted to know the reasons for not bidding. Would they be interested in the new process? Do manufacturers have 100% low-floor design that is ready? Selection of 100% low-floor versus 70% low-floor and combined with 11-metre turning radiuses, they are big decisions to make. Some experts were saying publicly that only 70% low-floor can accommodate technical requirements.
If technical requirements were not enough, 25% of Canadian content provision has created a major headache for overseas builder with no traditional manufacturing or contact-base in Canada. Such provision clearly favored one company with a long tradition in Canada. Why would other companies participate in the process, when the odds of winning the tender are so much against them? Bids from other companies will only help the Commission to negotiate a better deal with a preselected company of their choice.
During July 2008, Commission started one-to-one preliminary negotiations with all builders. At the end, they preselected 3 builders for closed negotiating process. As expected, it was our Canadian Builder, overseas Siemens and French Alstom. Rumors have it that Alstom was not interested at all, but was just persuaded to join the process. TTC used reference for 100% low-floor vehicle as the main criteria to select builders for further negotiations. Some professional opinions differed from the official line, saying that local requirements are so unique that no company has yet, built a car to these specifications. Required reference should not be the most important one, but TTC should negotiate with all interested builders.
The original Request For proposal called for tender of 204 vehicles. The schedule called for delivery at the rate of 24 cars per year, until 2018. Commission had budgeted price of $1.2 Billion. The purchase cost was to be split3-ways, among the City, provincial and Federal Governments. Since the later Government refused to participate in funding, City had to pick up 2/3 of the cost. The second procurement process started August 2008 and closed in April 2009. Bombardier won the contract on the base of price, while Siemens was about $500-million higher in the bid. It is not difficult to attribute the difference to the advantage. Alstom completely dropped out of the process. There was another European company that lobbied, but with no success, trying to be added to the negotiated process.
It has taken more than 2 years after the tender award for Torontonians to be able to see mockup. Saga of this project is most likely not over yet, since most important testing is yet to be done. Test vehicles are expected during the next year, and nobody is more specific about the dates. One might expect testing to be done before unveiling a mockup.
Is protectionism justified in public tendering process? Just like we have witnessed here? All builders operate in very difficult environments. All countries and major cities have long political processes and conditions attached to spending public money.. We do not have to remind about “Buy American,” a protectionism that Canadians protest against. In USA, all public transport procurement that require Federal money require 40% of US made content. If the money is generated on local or state basis, then there are no strings attached. USA is trying to protect American jobs at the expense of international trade, while protecting industry that does not exist. Who is the winner and who is the looser? Winners are those who will immediately benefit from spending of public money on transit expenditures. The domestic manufacturer, even though major part of this building process will be done in Mexico, not in Canada. Large manufacturers maintain bases in many countries, so they can shift the production to satisfy any political whims that are attached to the contract, while maximizing profits. It is obvious that overhead for these companies must be large. Public will, therefore, never know, what is the true manufacturing and development costs since they are always inflated by unnecessary expenditures. International trade is the looser since we are trying to revert to the times, when all we used, we also produced on local bases.
We all hope that new streetcars will become a success story. Success story would be defined by public satisfaction with riding them and their preference over cars. With an increase in ridership, public will be asking for more lines and perhaps revive the Transit City plans. Transit City plan to build several new street-level right-of-way lines, across the city. With the new administration in the City Hall, old plans were declared dead. New administration favors subway lines over surface rails, sharing the road with other traffic. It should not be one or the other, but subway lines for long travel complemented by streetcar lines. Only mix of these modes of transportation will create higher density city with no dependency on intercity use of cars.
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