Montreal - The Montreal transit commission has issued an international call for public tenders for a multibillion-dollar contract to modernize its fleet of subway cars.

Tuesday's announcement paves the way for Spanish company CAF to compete against a joint bid by Bombardier-Alstom.

"The decision to proceed with a call for tenders is good news for Quebecers and Montrealers," said Jesus Esnaola, director-general of CAF'S international affairs.

"It has been shown that the price always tends to decrease between 15 and 20 per cent when there's competition. The call for tenders will yield substantial savings for Quebec while providing substantial local economic benefits."

Esnaola said a CAF technical team is in Quebec to meet with suppliers.

"We are prepared to act quickly," he said. "CAF is ready to respond to the call for tenders and to meet all the requirements of the STM (the transit commission), including the requirement for Canadian content and the timing of the delivery."

Bombardier Transportation president Andre Navarri said earlier this year that 12,000 jobs, including more than 1,500 direct employees at Bombardier and French train maker Alstom, are relying on the contract.

The contract, valued at more than $3 billion, is for 765 rubber-tired railcars with purchase options for 288 additional subway cars.

The transit commission said it had accepted the recommendations of a panel of experts who noted that the interest shown by Construcciones y Auxiliar de Ferrocarriles S.A. (CAF) met its requirements.

Bombardier and Alstom failed to stop the tender process in court.

Marc Andre Lefebvre, a spokesman for Bombardier, said Tuesday he couldn't see how CAF could qualify for the contract considering it doesn't have a factory or suppliers in Canada.

He said he wants the transit commission to explain to taxpayers how it believes CAF is qualified to deliver the final product.

"We think the qualification of this manufacturer is truly incomprehensible in light of the demanding requirements of the initial call for tenders," he said.

Lefebvre wasn't sure what Bombardier's next move will be but it will decide when the tender is launched.

"If we had that contract today, we could get to work today."

The head of the union at Bombardier's plant in La Pocatiere, was saddened by the news, saying orders being filled by workers at the facility will run out with the completion of suburban train cars for the Agence metropolitain de transport de Montreal.

"We are really disappointed," Mario Levesque said. "It is not the decision I expected today. We do not understand the behaviour of the (transit commission)."

Levesque said the workers have been waiting for this contract since 2006 and he hopes Premier Jean Charest will step in.

"He could pass a law. He has the power to do so. He must must intervene."

Levesque said the entire province -- and not just La Pocatiere -- will suffer.

Benoit Poirier, an analyst with Desjardins Securities, described the impact of the latest development as "negative" for Bombardier.

"In terms of implications, we believe the new international call could potentially delay the contract award by 12-18 months although we remain confident that Bombardier will receive its fair share at the end of the day -- whether it goes forward with the Alstom consortium or alone," he said in a research report.

"With respect to its cost structure, Bombardier had previously announced that it would lay off 180 workers by the end of the year at its railway plant in La Pocatiere, -- which we believe is related to its inability to secure the subway contract."