Signing of the acquisition agreement of Montreal metro cars The new cars will be in service

from 2014
Montreal, October 22, 2010 - The Montreal Transit Corporation today signed with the
Bombardier-Alstom consortium for the purchase of 468 cars contract for the Montreal subway.
This announcement was attended by the Minister of Transport of Quebec, Sam Hamad, and Ms.
Manon Barbe, member of the Executive Committee of the City of Montreal responsible for
transport, Michel Labrecque, chairman STM, Ann MacDonald, Vice President Business
Development and Sales Bombardier Transportation North America, and Pierre Gauthier,
President of Alstom Canada.
At a price of $ 2.64 million per car, this contract is valued at $ 1.2 billion, making it one of the
most important granted to Quebec in 2010. These cars will gradually replace the MR-63 cars
driving since 1966. They will bear the name of MPM-10 (Material for Inflatable Montreal
acquired in 2010). According to a preliminary schedule, the first boa type of train that will be
customer service on line 2-orange, will be delivered in early 2014. The Montreal subway then
celebrate its 48 years. Subsequently, a series of new cars a month will be included in the
service.
"Hub of public transportation in the greater Montreal area, we had a responsibility as a
government to ensure the sustainability of the collective heritage that represents the Montreal
metro. This historic agreement achieves the three main objectives that we set ourselves,
namely an efficient subway to our city and its economy, a fair and reasonable price and benefits
for all of Quebec, "said Minister Sam Hamad.
Moreover, the Minister noted that today's announcement comes in the wake of the law 116
passed by the National Assembly on 7 October.
"The signing of the contract between the STM and Bombardier-Alstom consortium is excellent
news for Montreal, the metropolitan area and throughout Quebec. The arrival of these new cars
is part of a package of measures to modernize the underground system and increase the
reliability and capacity. This upgrade is a further step in the realization of one of the major
projects of the Montreal Transportation Plan and strengthens the common goal we share with
the Quebec government to give priority to public transport ", said Mayor Montreal, Grald
Tremblay.
Michel Labrecque, meanwhile, is convinced that investment in public transit will benefit all
customers of the greater Montreal region. "Decisions in 1963 demonstrate that it is appropriate
and profitable to invest in metro infrastructures, because it is a structured and efficient
equipment. With this equipment the 21st century, we can increase some 24% of our transport
capacity and significantly improve the customer experience thanks, among other things,
increased comfort and information systems at the leading edge of technology . This will allow us
to pursue our objectives of increased traffic and improved services and maintain our title of best
transportation company in North America, as recently awarded by the American Public
Transportation Association. "
Since 2006, Metro service offering has increased by almost 30%. In 2009, it provided more than
235.2 million trips, an average of more than 850,000 per weekday.
Moreover, according to a markup produced by the Imperial College London with 27 major
metros in the world, Montreal was ranked as the most productive in the world, that is to say that
the productivity of its labor to work is the highest in terms of vehicle kilometer and that its
operating costs are among the lowest. The STM also stands out from its peers because despite
the fact that its cars are among the oldest in the world, their meticulous maintenance performed
by employees allows them to continue to display a good level of reliability.

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Montral, October 29, 2014 The Socit de transport de Montral (STM) today addressed the future of the MR-73
mtro cars acquired between 1976 and 1980.
"The 2020 Strategic Plan called for the continual replacement of the mtro car fleet consisting of 336 MR-63 and 423
MR-73 cars. The changing context and financial challenges all public bodies are now dealing with have led the
corporation to rethink about how best to invest and ensure its assets are adequately maintained while continuing to
deliver reliable service that meets the needs of increasing passenger traffic," said Philippe Schnobb, Chairman of the
STM's Board of Directors.
The STM has therefore decided to extend the useful life of the MR-73 cars to 60 years. The discussions leading to
this decision were based on a 2012 report by Imperial College London ("Rolling Stock Replacement vs
Refurbishment"), which mentions the growing number of world-class public transit authorities choosing to refurbish
their subway cars to extend their useful life. The report recommends giving serious consideration to this option for
rolling stock with a solid track record for reliability, which is the case for the MR-73s.
Maintaining reliability and handling growing passenger traffic
The entire project was assessed at $587.7 million. Of that sum, $108.2 million would be allocated over 20 years to a
major maintenance program to keep the MR-73 cars in service with a good reliability level. This maintenance
program would focus first and foremost on the cars' various systems, such as traction and pneumatics, as well as car
bodies. A further $479.5 million would be used to acquire eight AZUR trains (72 cars)over and above the 468 cars
covered by the current contractas well as retrofitting the garages to accommodate the new trains. These
investments would be needed to adequately handle growing passenger traffic until the MR-73s are replaced.
"This scenario would generate savings of nearly $500 million for Quebec taxpayers and enable the STM to reduce
the need for investments over the coming years, reduce net debt service by $20 million a year for nearly 20 years,"
added Mr. Schnobb.

1966: COMMISSIONING OF MR-63

336 MR-63 cars
Produced by Canadian Vickers Renovated in 1990-1996 Will be replaced after 50 years by
breakdowns 3.7 million km-car (August 2014) 94 000 km-car / year (2013)
468 cars / trains 52 * Commissioned in 2010 by Bombardier-Alstom Made Tests in progress
* Replacement of 336 MR-63
Adding 63 to the growing demand
Adding 63 to the extensions

1976-1980: COMMISSIONING OF MR-73

423 MR-73 cars
Manufactured by Bombardier
Refurbished in 2005-2009 End of design life: 2016-2020 2.5 failures per million km-car (August
2014) 111 000 km-car / year (2013)
BACKGROUND The 2020 Strategic Plan provides for the replacement in 2012 of continuous
underground car park, including the MR-73; A very important investment of $ 2 billion in the
current financial environment; And considering our lack of investment: $ 3.9 billion,
Can we do otherwise?
USEFUL LIFE 30-40 years was the industry standard until recently Several networks are now
choosing to renovate their cars to extend the life of up to 60 Ex. Hong Kong, Santiago, Sao
Paulo
END OF USEFUL LIFE: A THEORETICAL CONCEPT
Report Rolling Stock Replacement Refurbishment vs Imperial College London (2012) studied
the metros that have chosen this option. Good equipment reliability is an essential condition for
extending its life.
"RSTC recommends que le qui more Established metros continues to replace Their Fleets close
to design life, Often in line with long driving range Held, shoulds re-examine Their strategies to
test the merit of the newer practices for Their Own Circumstances. It is significant That metros
realized Applied That what in the past May not Necessarily be the case in the future. "
EXTEND THE LIFE OF MR73 AT 60: TECHNICALLY POSSIBLE? MR-73: more reliable
MR-73 failures per million vehicle-km
Number of faults of 5 min and more
MR-73 failures per million vehicle-km

MR-73: LOW-COST CARS TO SERVICE

Source: Railway and Transport Strategy Centre, Imperial College London.
MAINTENANCE OF ROLLING STOCK (INTERNATIONAL COMPARISON)
Working hours by car
Maintenance costs per car

The MR-73 is reliable

Failures per million vehicle-km
MARKING INTERNATIONAL

Faults associated with MR-73 represent only 13% of nonuse

Distribution of 594 failures in 2014 (all causes)
MR-73
other

EXTEND THE LIFE OF MR-73: YES, IT IS POSSIBLE

1. By now service reliability
2.If having the growth displacements
3.The generating savings
4.With reducing the net debt service STM
KEEP THE SERVICE RELIABILITY
Making a major continuous maintenance program to maintain the reliability of the MR-73 Cost: $
108 million Maintain knowledge of the state of constantly MR
MEET THE GROWTH OF TRAVEL
AZUR acquire 8 trains (72 cars) Additional to meet the natural demand growth
costs: $ 226.5 million
to 15 trains Might if extension of the current contract
In addition to 468 cars
Pending replacement of MR in 2036 -73
larger garages to accommodate
the additional cars cost: $ 253 million
GENERATE NEARLY SAVE $ 500 million
For an extension to 2036 over replacement from 2016 (as provided in the Plan 2020);
In net present value (NPV), based on an assessment of all financial flows (revenues, capital
expenditures, operation, maintenance) that the STM should be incurred until 2047
LIGHTEN THE DEBT SERVICE OF NET STM
$ 20 million per year LESS for nearly 20 years
Limit the pressure on the net debt of the STM service
Net debt service, however, will remain an important issue
THE COSTS

Continue to offer a reliable service:

Major maintenance program continuously
$ 108.2 million
Meet growing demand:
8 additional trains AZUR $ 226.5 million
Infrastructure (parking positions) to accommodate eight additional trains $ 253.0 million
total
$ 587.7 million
Source: STM, the 2015-2017 three-year capital program

ON SOUND AND RESPONSIBLE DECISION IN THE CONTEXT OF PUBLIC FINANCES

Continue to offer a reliable service to meet the growth in travel better face the challenge
of lack of investment generate savings of nearly $ 500 million for the taxpayer.
In the current situation, the STM can not afford to do everything. We must make
choices.

https://www.stm.info/en/press/press-releases/2015/azur---stm-announces-the-start-of-day-time-testing
http://www.stm.info/en/press/our-files/new-azur-metro

Azur budget
Rolling stock - Total Car
1 Acquisition of 468 cars (52 trains) at a price of $ 2.640 million

total = 1235.5 M $

Cars Rolling stock - Other costs

2 Technical Options

8.0 $

3 spare Park (4% - items 1 and 2) $ 49.7

4 Outillage specialist / test benches (3% - items 1 and 2)
5 Provision - Indexation

236.6 $ 6 Contingences (8% - items 1, 2, 3, 4 and 5) $ 125.4

7 Provision - Fluctuating devises- $

8 Garanties bancaires15.0 $ 472.0 $
Total - Contract consortium (before taxes)
9 taxes- TPS

$ 85.4

9 taxes-TVQ

$167.0

$ 1 707.5

Total QST 252.4 $

- the Consortium Agreement (all taxes included) 1
9 Ristourne - TPS

$ 959.9

85.4 $

Total - the Consortium Agreement (net of rebates taxes - GST) 1 $ 874.5

Rolling stock - Project Office

10 Project Office 226.1.9 $
Net taxes rebates 14.1 $
total 240.2 $

$ 37.3

Rolling stock - Financial expenses

11Financial expenses 91.7 $

Total equipment Rolling stock (net tax rebates 2206.4 $

Infrastructure, fixed equipment and other deliverables *

12 Changes - small revision Youville Workshop (PRY) $ 124.3

Pre-purchasing $ quipements

17.6 $

Plans and specifications / offres 9.9 $

Call Setup oeuvre

96.8 $

13 Broadband Radio System (SLRB) $ 35.4

Plans and specifications / offres

$ 1.3

Call Set $ oeuvre

$34.0

14 driving simulation system (simulator) and teaching materials $ 13.8

Plans and specifications / offres 0.8 $
Call E-learning

0.9 $ Design, manufacture and installation of docks

12.1 $
15Adaptation simulateurs - universelle $6.4 Accessibility Pre-feasibility study 0.6 $
plans and specifications faisabilit / Call offres $0.7
Getting oeuvre

5.1 $

16 Modifications - Fixed Equipment and infrastructures

39.3 $

prefeasibility studies and $ faisabilit $2.6 Plans and specifications / d Call 'Getting offres
oeuvre

6.1 $

30.6 $

17 Modifications - major revision workshop Youville (GRY)

study faisabilit

$ 12.5 $

$0.2

study prfaisabilit

$0.1

Plans and specifications offres0.8

Call Setup oeuvre11.4 $
18 tudes changes - Other workshops and garages11.4 $
studies prfaisabilit
1.6 $ faisabilit
Total infrastructure and equipments 268.1 $

9.8 19Rserve Study propritaire

25.0$

TOATL PROJECT 2474.5 $ 2

*Indexing, contingencies, incidental fees, taxes and financial costs included ($ 111.9 million or
42% to $ 268.1 million).