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Complex international financing holding up $100-million contract.

Complex international financing holding up $100-million contract

When it officially arrives, an order for rail cars worth more than $100 million for a planned subway in Turkey should keep the Can Car Thunder Bay Works going for some time.

The total cost of the project in the Turkish capital of Ankara will be about $700 million, says Gordon Burkowski, manager of industrial relations at Can Car. "This is the cost of building a subway from the ground up."

The overall project will be under the guidance of Lavalin Group Ltd. of Montreal.

Can Car is owned by UTDC Inc., a former Crown corporation which was sold to Lavalin.

Burkowski notes that Lavalin specializes in large-scale construction project, such as the mammoth energy developments by the Quebec government. "It is one of the largest contracting outfits in the world."

Actual notice for proceeding with work on the Ankara subway cars has not yet been given.

Burkowski is confident that approval is forthcoming, explaining that Lavalin is the only company with which the Turkish government is dealing.

However, he adds, "I don't want to make anyone think we're presuming."

There will be 72 motored cars built, along with 36 trailers.

There have been delays for the Ankara subway because there are so many players involved, Burkowski says. "We've just had to accept the fact that this is something you can't do overnight."

International financing for the project is one of the key factors. "Every piece of the puzzle has to be in place or you don't play," Burkowski explains.

Can Car has already constructed subway cars for the cities of Toronto and Boston, and street cars for Santa Clara, Calif.

If the Turkish contract is secured, it will be the first time that Can Car has been involved in a European project.

"Europe is a tough market to crack," states Burkowski, explaining that the Europeans have their own rail car industries.

The real opportunities for selling subway or street cars exist in such places as Thailand and South America, and especially Brazil, he says.

There are also opportunities in the United States which does not have any manufacturers of passenger rail cars.

International competition comes from the Germans and French, although Burkowski notes that the biggest competitor is in Japan.

"There's a big market, but that doesn't mean an easy market," he says. "You can get the work, but you have to sharpen your pencil."

GETTING READY

Some retooling of Can Car will be required to accommodate the Ankara project, but the cars will essentially be the same design as those previously produced at the plant.

Burkowski says authorization to proceed on such a project as large as the Turkish subway never takes less than a year, and usually about 18 months to be received.

In that time a new production line will have to be laid out in Thunder Bay. Once the new line is installed, production rates can rise quickly.

For the Ankara project, Burkowski believes that the production of two cars per week is quite achievable.

The cars will be similar to those used in the Toronto subway, and the Toronto Transit Commission (TTC) will be involved in the project.

"The TTC will be providing technical support for running the system for a total of 20 years," notes Burkowski.

BIG EMPLOYER

As of early October there was a total of 649 employees at the Can Car operation. Of that number 415 are hourly-rated employees, with the remainder in support, office and management positions.

If the Turkish contract goes ahead, it would mean a stabilizing of the work force.

"By itself, it would keep the numbers as they are or marginally raise them," Burkowski predicts.

He adds, "It's our feeling as a company that, if we see the work we're expecting for next year, we can expect employment for most of the 1990s."

Currently Can Car is working on an order for bi-level cars for the GO Transit system in southern Ontario. The order is expected to last well into next year, Burkowski says.

The final delivery of the 60 cars in the $78-million deal has been extended to June of next year.

Burkowski says the delivery will not be late even though there was a decision to reduce the production rate to extend employment at the plant.

The marketing arm of Can Car, UTDC in Kingston, is closing in on a deal with Los Angeles for over-ground bi-level cars which would be built in Thunder Bay.

UTDC's bid of $51.4 million (U.S.) for 40 cars was recommended by the staff of the Los Angeles County Transportation Commission.
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Title Annotation:Thunder Bay Report
Author:Bickford, Paul
Publication:Northern Ontario Business
Date:Nov 1, 1990
Words:770
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