Bombardier Set to Embark on Multi-Billion Pound Programme for London's Underground in the U.K.

Business Editors

MONTREAL--(BUSINESS WIRE)--May 8, 2002

Bombardier Transportation (TSE:BBD.A) (TSE:BBD.B), as a partner in the Metronet Consortium, welcomed London Underground Ltd's signing of the Share Purchase Agreement today, aimed at transferring to the private sector for 30 years, the renewal, modernisation and maintenance of London Underground's infrastructure. The agreement will become effective when Financial Close is finalised, expected later this year.

Once Financial Close is completed, Bombardier will receive contracts from Metronet for the supply of rolling stock, signalling and project management. It is expected that the value of Bombardier Transportation's contracts will be in excess of pounds sterling 3 billion ($6.9 billion Cdn) over the next 30 years. The first phase of the project will see Bombardier begin re-signalling work, refurbishment of some rolling stock and construction of prototype trains. Subsequently, the turnkey contracts include the project management and the supply of 1,738 metro cars and new signalling systems for the Victoria Line and Sub-Surface Lines, together with the maintenance of the rolling stock. The new metro cars will be built in Bombardier's facility in Derby, United Kingdom between 2008 and 2014.

In the first seven-and-a-half years of the 30 year contracts, the Metronet Consortium will invest over pounds sterling 7 billion ($16.1 billion Cdn) upgrading, replacing and maintaining the infrastructure of the Infracos BCV (Bakerloo, Victoria, Central and Waterloo & City Lines) and Infraco SSL (the Sub-Surface Lines - Circle, Hammersmith & City, Metropolitan and East London).

The five equal shareholders of Metronet (Balfour Beatty, Bombardier Transportation, Seeboard, Thames Water and WS Atkins) plan to invest pounds sterling 350 million ($805 million Cdn) of equity in equal shares of pounds sterling 70 million ($161 million Cdn). Metronet Rail SSL Finance plc and Metronet Rail BCV Finance plc intend to raise a further two-and-a-half billion pounds ($5.75 billion Cdn) in the debt markets.

Pierre Lortie, President and Chief Operating Officer of Bombardier Transportation, said "The signing of the Share Purchase Agreements is an important milestone. We look forward to the completion of the final stages of the Public-Private-Partnership (PPP) process to enable Financial Close to be effected and the transfer of the two Infracos to Metronet. Work will then begin in earnest, bringing significant improvements to the London Underground system that will benefit passengers and London."

Bombardier Transportation is the global leader in the rail equipment manufacturing and servicing industry. Its wide range of products includes passenger rail cars and complete rail transportation systems. It also manufactures locomotives, freight cars, propulsion & controls and provides rail control systems.

Bombardier Inc., a diversified manufacturing and services company, is a world leading manufacturer of business jets, regional aircraft, rail transportation equipment and motorized recreational products. It also provides financial services and asset management in business areas aligned with its core expertise. Headquartered in Montreal, Canada, the Corporation has a workforce of some 80,000 people in 24 countries throughout the Americas, Europe and Asia-Pacific. Its revenues for the fiscal year ended Jan. 31, 2002 stood at $21.6 billion. Bombardier trades on the Toronto, Brussels and Frankfurt stock exchanges (BBD, BOM and BBDd.F).

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NOTES TO THE EDITOR:

Metronet

Metronet is a consortium made up of five world class shareholders bidding for the Public Private Partnership Infraco contracts for London Underground. The consortium, formed in the summer of 1999 and is made up of five equal partners Balfour Beatty plc, Bombardier Transportation, SEEBOARD Group plc, Thames Water Plc and WS Atkins plc. The consortium has unrivalled expertise in project management and planning, railway engineering and asset management and a wide range of other technical disciplines.

About the Consortium Members

-- Balfour Beatty One of the largest engineering, construction and asset
management groups in the United Kingdom. It operates across a range of
geographical and product service markets but with a strong orientation towards
the engineering, financing, construction, maintenance and assent management of
infrastructure. It carries out over pounds sterling 600 million per annum of
work for railway customers, making it the largest contracting and service
business for fixed railway infrastructure in the United Kingdom and one of the
largest in the world.

-- Bombardier Transportation - Please refer to the Press Release.

-- Seeboard Sells gas and electricity to customers throughout the UK. In its
traditional heartland of Kent, Sussex and large parts of Surrey, it owns,
operates and maintains an electricity network of over 45,000km (28,000 miles)
of overhead lines and underground cables. With its headquarters in Crawley,
West Sussex, SEEBOARD employs around 3,500 staff and has a turnover of more
than a billion pounds a year. The company is a member of AEP, based in
Columbus, Ohio. SEEBOARD Powerlink, owned by SEEBOARD, Balfour Beatty and ABB,
has the 30-year contract to operate, maintain, finance and renew London
Underground's high-voltage power distribution network.

-- Thames Water One of London's largest and most experienced infrastructure
managers operating a major network of pipes and sewers under the congested
streets of the capital. These include the 80km long Thames Water Ring Main, one
of the largest tunnelling projects undertaken in London since the Tube was
first constructed. Thames Water already works closely with London Underground
on the rising water problems.

-- WS Atkins One of the world's leading providers of professional,
technologically based consultancy and support services. It already undertakes
significant consultancy work for London Underground and is the UK's leading
railway engineering business with expertise in safety, design, electrification
and signalling.

About Metronet Rail SSL Finance plc and Metronet Rail BCV Finance plc

Metronet Rail SSL Finance plc and Metronet Rail BCV Finance plc are wholly owned subsidiaries of Metronet Rail SSL Holdings Ltd and Metronet Rail BCV Holdings Ltd. respectively.

The purpose of these companies is to act as vehicles for the holding of bond finance, management and release of this finance to the operating companies as and when required.