LRT expansion balloons by more than $1B
Joanne Chianello | CBC News | Posted: February 22, 2019 7:38 PM | Last Updated: February 22, 2019
East West Connectors, SNC-Lavalin to share LRT project now worth nearly $4.7B
Ottawa's light rail expansion project has now ballooned to nearly $4.7 billion — more than $1 billion over the original budget — and will take two years longer to complete than originally planned.
The startling news came Friday afternoon during a technical briefing where city officials revealed the bidders chosen to work on the massive infrastructure project.
The city is planning to borrow an additional $700 million over 30 years to cover the inflated cost. The expansion, which will add 44 kilometres of track and 24 new stations, is now scheduled to be finished by 2025 instead of 2023.
East West Connectors is the top choice to expand the east-west Confederation Line. The consortium is led by Omaha, Neb.-based construction conglomerate Kiewit, which worked on Toronto's Spadina Subway extension, as well as France-based Vinci.
Its bid came in at $2.57 billion, well above the $1.98 billion target the city had set.
The Confederation Line expansion project will see the line extended to Trim Road in the east and Moodie Drive in the west, as well as an extension to Algonquin College.
It was supposed to be completed by 2023, but that assumed the first 12.5-kilometre stage, from Blair to Tunney's stations, would be up and running by the first half of this year.
Behind schedule
That's not going to happen, with fewer than half of the 34 vehicles completed, testing far behind schedule and recent concerns about the system's ability to deal with Ottawa winters.
As reported by CBC News, SNC-Lavalin beat out two international consortia to win the north-south Trillium Line extension, worth more than $600 million. It would see the line extended into Riverside South, as well as a spur to the airport.
SNC-Lavalin bid for the contract under the name TransitNext. This deal, if approved, would also include a 30-year maintenance contract, making SNC-Lavalin's contract worth $1.6 billion.
The Montreal-based multinational firm is embroiled in a political controversy over its attempts to avoid criminal prosecution over bribery charges. If SNC-Lavalin faces those charges in court and is found guilty, the company could be blocked from bidding on federal government contracts for a decade.
SNC-Lavalin recently slashed its earning projections twice, its shares have hit a 10-year low and its CEO said late last year that the scandal has cost the company $5 billion worth of business.
As well, councillors are sure to question the choice of SNC-Lavalin because of its role as lead partner in Stage 1, which now looks to be delayed a third time. It's unclear when the first phase will be complete.
Mayor Jim Watson has said he's not concerned about the controversy.
Province's share unconfirmed
The bill for Stage 2 is supposed to be split three ways between the city, provincial and federal governments.
The federal cash is confirmed, and the previous Ontario government committed $1.2 billion for Stage 2 in a letter to the mayor in May 2018.
But the Progressive Conservative government elected last spring has still not confirmed the cash, despite Premier Doug Ford having said he supported the light-rail expansion during the 2018 election.
Watson is supposed to be speaking with the premier about the matter at Queen's Park on Tuesday, just a day before council is set to debate the contracts, the largest infrastructure project the city has ever undertaken.
Council is set to vote on the matter March 6.