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Bombardier disappointed as Amtrak abandons plans for Acela purchase

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

Amtrak says it will formally start the process early next year of replacing the existing 20 Acela Express trains and add two cars to trains to expand the seating capacity of the service connecting Washington, D.C., and Boston. It originally planned to add 40 Acela cars to its existing fleet.

Chief executive Joe Boardman says moving directly to new high-speed trains is the best option to improve the railway’s service and reduce operating costs.

He told a congressional committee in Washington on Thursday that the previous plan to add 40 new passenger cars with newer technology to the older Acela trains was “a stop-gap measure.”

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 an upgraded version 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.

Meanwhile, the rail manufacturer is interested to supplying interim trains if required or participating in a tender call for high-speed trains that can travel up to 354 kilometres per hour, she said.

The Acela trains are designed to hit 265 km/h, but travel at much slower average speeds and 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 one cent at C$3.40 in afternoon trading.