Shares of Bombardier (TSX: T.BBD.B, Stock Forum) climbed 4.6% to $3.64 Friday after the Toronto Transit Commission reported that a staff report made public is recommending Bombardier Transportation Canada Inc. be awarded a contract worth a total of $1.22 billion, for 204 new low-floor light rail vehicles with a delivery date beginning in 2011.
The TTC says the commission will discuss and vote on the staff recommendation at a meeting on Monday, April 27.
The TTC purchased 248 streetcars in the 1970s and 1980s, and now says these vehicles now need to be replaced, as the ageing fleets are nearing the end of their useful lives.
Bids from two vendors, Bombardier Transportation Canada Inc. and Siemens Canada Limited, were received in February, with the TTC noting that a recommendation to award the contract to Bombardier is based on price. Bombardier’s base price is $993 million, with another $293 million factored in for the cost of spare parts.
However, awarding of the contract is contingent on funding, and the TTC notes that as of today, no funding commitment has been made by either the provincial or federal governments. Bombardier’s bid price is guaranteed until June 27.
On the Bombardier Bullboard Friday, g2g said: “we should hit 4bucks on monday![sic]”
While bomber1 asked: “Why Monday? why wouldn't the market react to the contract win today?[sic]”
And, jsmith888 replied: “It's only a recommendation right now from the TTC. It requires a vote on monday by the board, based on the recommendation. So technically speaking, I don't believe they have "won" the contract, until they it has been voted on[sic].”