Bombardier disappointed as Amtrak abandons plans for Acela purchase

MONTREAL – Bombardier says it is disappointed that Amtrak is abandoning the purchase of its Acela rail cars for the northeastern U.S. corridor as the passenger rail operator instead advances plans to acquire faster, modern high-speed trains.

Amtrak said it will formally start the process early next year to eventually replace the existing 20 Acela Express trains plus add additional trains to meet its forecasts of increased ridership in the years to come.

It had originally considered purchasing 40 Acela passenger cars, two of which would be added to the six cars that operate on each of its 20 trains.

But chief executive Joe Boardman told a congressional committee in Washington on Thursday that such a move was “a stop-gap measure.”

“Moving directly to new high-speed train sets is the best option to create more seating capacity, permit higher speeds, and maximize customer comfort all while improving equipment reliability and reducing operating costs,” he stated in a news release.

Besides posing technical challenges, adding new cars was determined to be not cost effective and insufficient to handle new ridership growth projections, Boardman said.

Bombardier (TSX:BBD.B) and Alstom partnered in 1996 to supply the original Acela trains but Bombardier has been in discussions to manufacture the additional passenger cars at its Plattsburgh, N.Y., facility.

Spokeswoman Maryanne Roberts said Bombardier isn’t totally surprised by the decision because it was one of several options being considered.

“They were always going to order the next generation of high speed trains too and they were looking at an in between measure so we’re disappointed that they’re not going to go forward with that but we stand ready to help them with their future procurements,” she said in an interview.

Bombardier, Siemens and Alstom are among the world’s large rail manufacturers that are expected to participate in a tender call for trains that could travel up to 354 kilometres per hour. Amtrak has yet to decide what speed of train it will seek or how much it plans to spend on equipment in addition to billions of dollars for infrastructure upgrades to tracks and tunnels.

The Acela trains are designed to hit 265 km/h, but travel at much slower average speeds, averaging just 116 km/h on sections north of New York City. They only reach 241 km/h for a few kilometres in Rhode Island because of infrastructure issues with the track.

Amtrak expects a public-private partnership could play a significant role in the upgrade because of the prospect for more than US$1 billion in operating profits and some 40 million passenger annually once it is in full operation.

Boardman said international experience suggests that the private sector is only willing to participate in high-speed rail projects after the public sector allocates significant funding.

Amtrak transported a record 31.2 million passengers in fiscal 2012, including 11.4 million in the northeastern corridor. It has tried to build itself as an airline alternative especially for business travellers and carries more passengers between New York and Boston than all airlines combined.

On the Toronto Stock Exchange, Bombardier’s shares were up two cents at C$3.42 in afternoon trading.