Bombardier denies report it faces Swiss train delivery penalty

Mon Mar 18, 2013 1:31pm EDT

* Bombardier says it faces no penalties from Swiss railway

* Bombardier says delivery delay caused by design changes

* Delivery of 59 trains delayed to 2015-19, from 2013-19

TORONTO, March 18 (Reuters) - Bombardier Inc, the world's biggest train maker, denied on Monday a Swiss newspaper report that said it will have to pay at least 460 million Swiss francs ($490 million) to Swiss railway group SBB for late delivery of 59 double-decker trains that were ordered three years ago.

The newspaper, Der Sonntag, said on Sunday that Bombardier faced penalties ranging from 460 million to 708 million francs, depending on how long deliveries to Swiss railway group SBB were delayed.

"None of this is accurate," said Bombardier spokesman Marc Laforge. The Montreal-based company is not facing any penalties for the order, he said.

Laforge said delays were caused by a court challenge to SBB by advocacy groups that argued that a redesign was needed to make the trains accessible to the disabled. SBB successfully appealed a lower court ruling last month.

While awaiting the court decisions, SBB worked with Bombardier to make modifications to the trains, and the railway will cover those costs, Laforge said. He declined to detail that expense or any other contract terms.

The Swiss railway ordered 59 trains for 1.9 billion francs in May 2010, with service expected to start in December 2013. SBB said last year that deliveries would be pushed out by two years, to 2015, in part due to modifications to accommodate handicapped passengers.

"From our conversation with the company, the delay was due to the result of a scope change by the customer, which triggered a design change and therefore a push-back in the delivery schedule," said BMO Capital Markets analyst Fadi Chamoun.

"Bombardier management stated that it is not responsible for any penalties. It appears to us that the newspaper article was speculative at best."

Train deliveries will start in December 2015, two years later than planned, and run through to the end of 2019, Laforge said.

Shares of Bombardier were down 6 Canadian cents at C$4.22 on the Toronto Stock Exchange early on Monday afternoon.

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