How the Alstom Group purchase of Bombardier Rail Division and the advent of the COVID-19 virus should scuttle TransLink’s SkyTrain expansion plan and the torpedoing of your wallet!

By May 21, 2020Issues

Submitted by the South Fraser Community Rail Society

The recently announced purchase of Bombardier by the Alstom Group plus COVID-19 IS A GAME CHANGER for TransLink’s SkyTrain plans that are yet to receive senior government final approval for the Fraser Highway proposal to Fleetwood, let alone Langley City. We urge the Federal and B.C. Provincial Government, TransLink Mayor’s Council and the TransLink Board of Directors to hit PAUSE on any plans to proceed until ALL facts on the Alstom purchase are known and our future transit needs under a NEW normal are understood!

RE Alstom Purchase of Bombardier –
FACT:    SkyTrain is Bombardier’s sole surviving system for new system purchases!
FACT:    Alstom will be dropping all marginal product lines once the sale has been approved by the regulatory bodies due to cost of supporting same and competitive pressures for critical lines of business!
FACT:    TransLink must make technology decisions which will determine how much cash will be pumped from your wallet due to EXPO/Millennium line rebuilds and the proposed King George-Fleetwood let alone Langley expansion!
FACT:    It is imperative the provincial government and TransLink hit the “PAUSE” button on the proposed Fraser Highway extension until the sale has completed mid-2021 and the consequences of going forward are known and the alternative option is carefully considered!

RE COVID-19 Impact –

Fact:      SkyTrain Expo and Millennium Lines are running at 18% of normal, Canada Line is running at 14% of normal, SeaBus is running at 10%, West Coast Express is running at 6% while buses are running at roughly 15% of normal.

Fact:      60% of TransLink revenues that depend on farebox, gas tax and parking revenue have collapsed with NO assurance on their rebounding within any reasonable timeframe.

Fact:      Significant additional spending by senior governments was and is essential, on balance they have both done a good job. With a projected Federal Deficit for 2021 of well over $250 Billion and growing plus an additional high cost to the provinces finances, a cautious use of tax dollars is required.

So, to more detail re Alstom purchase of Bombardier and its impact:

France’s Alstom Group has reached an agreement to purchase the Bombardier Transportation Rail Division for about USD$8.2 Billion. Alstom has agreed to maintain the HQ for North American Rail operations in Montreal for at least the next 5 years as the Caisse de dépôt will be the largest external shareholder in this new entity. How will the advent of COVID-19 affect the proposed sale/purchase? Will it be renegotiated, will it go ahead, what is the affect of Bombardier? Huge implications either way.

This agreement is subject to the EU competition regulator’s approval and this is not expected until mid 2021. Until approval has been rendered by the competition regulators, it will be business “as usual” with both parties slugging it out in the marketplace for any, and all new business contracts. It is estimated Bombardier Transportation currently has about C$35Billion in orders on the books which will migrate to the new entity on completion. How will the advent of COVID-19 affect the proposed sale/purchase?

This sale presents ominous clouds to users such as TransLink, of the Bombardier SkyTrain product line.

Once the deal has been blessed by the regulators and formal sale taken place-Alstom Group will have to take a sober look at the various Bombardier technologies they have acquired in terms of their future viability in the marketplace. A major future slugfest is expected as Alstom, Siemens and other rolling stock suppliers sharpen their teeth on dealing with the 800-pound gorilla in the room – the state owned Chinese CRRC with annual revenues of more than $100Billion.

Products such as the LIM powered SkyTrain product could be first on the chopping block. How long will Alstom commit to supporting this sole-source product line with ONE customer for spare parts and new manufacture, especially now with all the focus being on Hydrail (Hydrogen powered transit). Many countries have now mandated the use of Hydrogen to eliminate the use of diesel. Alstom happens to be the acknowledged leader in Hydrail.

In-light of recent events, TransLink will have to very-seriously-reconsider as to whether SkyTrain technology on Fraser Highway is the correct solution for deployment.

If TransLink insists on proceeding using the SkyTrain product, they are still stuck with a sole source supplier, Alstom Group, which will have doubled in size overnight and has even less interest and motivation to be a supplier of this product. Pricing this product line properly to reflect the true cost of maintaining it as a commercially viable product will make it even more expensive than the past.

It may be time that TransLink is forced to make the bold transition to technologies and product lines which can be sourced from multiple vendors. Yes- it will be painful but the sooner they start, they are in a position to entrench/guarantee their supply position for spares/upgrades for old technologies (SkyTrain) as they place orders for new technology (iLint hydrail) as partial compensation for Alstom maintaining the SkyTrain supply chain.

The alternative might be a letter from Alstom Group advising of the total discontinuation of the SkyTrain product line with TransLink having either the option of a final “last buy” of rolling stock/spares or the shotgun “offer” to purchase the rights, licenses and tooling to manufacture the Skytrain product line.

Metro Vancouver and our taxpayers cannot afford the cost and risk of TransLink being in the rolling stock fabrication business?

So, to the economic impact of COVID-19 to the Province of B.C.?

You do not have to look beyond the just announced unemployment numbers for the months of March and April in B.C.. How does close to a 400,000-job loss and an unemployment rate of over 10% look?

So, consider the following –

  • What will a restart of the economy look like?
  • What will our NEW normal in Transit look like?
  • Who, how many and how often will the public be ready to go back to public transit without fear of contracting this deadly virus? What will the public’s trust quotient be?
  • How many bricks and mortar businesses will reopen? How many will re-engineer their existence?
  • How many businesses large and small will rethink how they are going to operate in the future i.e. work from home just might be looking more attractive in terms of increased productivity at a reduced cost?
  • Transit use during this pandemic has been reduced by over 84%, how much of that will come back and/or how long will it take? Will TransLink’s current funding model sustain some form of existing transit operations for 4 months? 6 months? Or 8 months?
  • How long will it take for gas, parking revenues and fare revenues meet the needs of our NEW transit needs?
  • What will our new economy look like after potentially a 6 – 10-month, (or more) shutdown?
  • We recall TransLink’s dismissal of the $50 million previously spent for the planning of the previously approved 11 KM Surrey LRT line on 104th Ave to Surrey Center down King George Blvd to Newton. This is the time to regroup and go back to utilize those previously expended funds and the planning they were used for and move forward with that plan.
  • We need to support fiscally responsible regional and interregional transit for the lower mainland out to Chilliwack.
  • We need to support environmentally responsible interregional transit for the lower mainland out to Chilliwack.

Conclusion: At a cost of $200 Million per KM (TransLink numbers), continued expansion of SkyTrain will bleed off the available capital financial resources PLUS the costly operational financial resources to properly expand Transit on the lower mainland, from Lions Bay to Hope. The facts are a 99 Km state-of-the-art South Fraser Hydrogen Community Rail passenger service (at no-cost for its use) will serve 10 times more taxpayers/residents, industrial parks, 14 Post Secondary Institutions and the Abbotsford Intern. Airport AT THE SAME COST as 7 Km. of the Surrey Center to Fleetwood Sky-train.

Our region(s) need fiscally and economically responsible efficient transit that is environmentally friendly and CleanBC appropriate. With very-limited financial resources available from government going forward, lets implement a system that makes sense!

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