La Caisse de dépôt et placement du Québec‘s (La Caisse) $6.04-billion Réseau électrique métropolitain (REM) continues to draw both national and international attention as the public sector looks for new ways to finance the construction of infrastructure assets.
“We’ve had, really from the beginning, a manifestation of very significant interest among U.S. mayors, U.S. governors, cities in Europe, and cities in Asia,” said Michael Sabia, president and CEO of La Caisse. “This model, and what we’re trying to do, has certainly attracted people’s attention.”
The pension fund continues to push the project schedule forward for the REM project, which would provide a 27-station, 67-kilometre addition to the Montreal transit system.
“Our focus right now is getting Montreal going,” said Sabia. “We’ve still got some steps to get through there and we want to make sure that happens.”
Speaking following his presentation at the International Forum of the Americas’ Toronto Global Forum, Sabia noted that uncertainly over the current timeline for the construction of the Champlain Bridge is one of those steps, candidly adding that “you can’t build a transit system without a bridge to build it on.”
On the project end, everything to this point continues to be on schedule. It is expected that later in November we can expect the completion of the tender process. That follows funding commitments made by both the federal and provincial government of more than $2.56 billion combined, as well as the National Assembly of Quebec’s passing of Bill 137 in late September that paves the way for the rapid implementation of the project.
Bombardier poised for positivity
Sabia also commented on the situation that has developed with Bombardier, noting that the recent deal struck with Airbus could provide a boost for their transport business.
“Now that the C-Series issue is addressed, I think now the company can turn to a couple of things with respect to the transportation business,” said Sabia. “First, very important, really accelerating its operational improvement, the quality of execution of contracts, which is certainly important cause we’ve seen some examples of where that execution hasn’t been where it might be. Where I think now, the leadership of Bombardier transport, but also the leadership of Bombardier overall, (president and CEO) Alain Bellemare, is very focused on these issues.
The issues of Bombardier’s transport business have been well publicized in the Canadian transit industry, especially in Toronto, where the Toronto Transit Commission and Metrolinx have openly sparred with the company over missed delivery targets and quality issues. That led to Metrolinx’s purchase of 61 Citadis Spirit light rail vehicles from French manufacturer Alstom in May.
In September, news of the Siemens-Alstom Memorandum of Understanding to combine Siemens’ rail traction drives business with Alstom posed an even bigger threat to Bombardier’s rail business in Canada. But Sabia sees that as a potential opportunity for the company.
“The second step is looking at the broader industry and asking whether either there are useful assets that will come out of the Siemens/Alstom merger, one area to look at,” said Sabia. “Two, companies in exactly the same space where there are opportunities for partnerships or joint ventures; I think that needs to be addressed. I think there may be opportunities for businesses that are in adjacent areas.”
With the aerospace industry woes seemingly behind them, Bombardier can now focus its renewed efforts on improving the state of its transit business.