Canada Signals Via Rail Is Free to Pick Siemens Over Bombardier

(Bloomberg) -- Justin Trudeau’s government said it won’t force state-owned Via Rail to pick Bombardier Inc. over Siemens AG for a new rolling-stock order.

“Our commitments with respect to free-trade agreements with Europe and other countries don’t allow us to favor Canadian companies,” Transport Minister Marc Garneau told reporters Tuesday in Ottawa. Garneau, who is responsible for overseeing the passenger rail service, referred further questions to Via Rail Canada Inc.

The minister spoke after Montreal’s La Presse reported, citing unidentified sources, that the Crown corporation is poised to award Siemens an order worth around C$1 billion ($753 million). Losing the Via Rail order would hand Bombardier a second high-profile setback in its home country in a matter of months. In February, Caisse de Depot et Placement du Quebec, Canada’s second-largest public-pension manager, picked Alstom SA of France to build trains for a C$6.3 billion automated light-rail system it’s building in and around Montreal.

Via Rail is planning to award a contract to modernize its fleet of passenger cars by the end of the year, spokeswoman Mariam Diaby said Tuesday by telephone from Montreal. She declined to comment on the La Presse report, saying the company is working with an independent supervisor to ensure the bidding process is equitable.

The online newspaper also said Bombardier’s home province of Quebec has asked the federal government to intervene to favor the Montreal-based manufacturer. Provincial officials didn’t immediately respond to a request for comment.

A spokeswoman for Garneau said the federal government wouldn’t comment further. “The process is not completed,” Delphine Denis said by email Tuesday before Garneau spoke. She added that Via Rail’s procurement “is designed to be open and transparent and aims to provide the optimal outcome for Canadian taxpayers.”

©2018 Bloomberg L.P.