LRT budget so low that some worried bidders couldn't meet it, inquiry hears

A number of key players in the bidding process for Stage 1 of Ottawa's Confederation Line were worried the $2.1-billion budget wasn't big enough to attract proposals for the massive infrastructure project, the light rail public inquiry heard Tuesday.

Rob Pattison, who headed the LRT division for provincial agency Infrastructure Ontario, told the commission Tuesday morning he was told "the budget was not up for debate" and worried no one would bid for the 12.5-kilometre LRT project, which opened behind schedule in 2019.

"That's the amount the city had to spend," said Pattison. "And, you know, that raised the flag of, you might have a failed procurement."

WATCH | His concerns over the low budget 

Low LRT budget left some worried about a ‘failed procurement,’ inquiry hears

2 years ago

Duration 1:23

Rob Pattison, who headed the LRT division for Infrastructure Ontario, says he worried the budget was too low for companies to meet and would lead to few or no bidders for the project.

Even the former city manager who oversaw the LRT procurement told the inquiry in a May 30 interview it was a concern that bidders might not be able to put together proposals that met the price cap, especially as the downtown tunnel presented some risk to constructors.

"Personally, I don't know if I was ever comfortable until the day we opened the bids and we had submissions that we were going to be able to proceed," Kent Kirkpatrick told a commission lawyer.

In the end, though, two of the three shortlisted consortiums had bids within the $2.1 billion envelope, including Rideau Transit Group (RTG), which won by scoring the highest.

Miss Wednesday's hearing? Watch it here:

Budget cap under scrutiny

The Ottawa LRT public inquiry, called by the province last fall, is investigating what commercial and technical issues may have led to Confederation Line problems, starting as it was being planned and especially the two derailments last summer.

The commission, led by Ontario appeal court Justice William Hourigan, is looking at the project somewhat chronologically and has spent the first two days concentrating on the procurement process — including whether the size of the project budget may have constrained the line's quality.

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The $2.1-billion budget for the LRT was set in 2009, but it was preliminary: it was before any detailed engineering was completed, and did not take inflation into account.

At the same time, the federal and provincial governments at the time had committed to contribute only $600 million each toward the project.

Over subsequent years, the city and its experts found ways to keep the project within the budget, including shortening the downtown tunnel, moving it so it would be more shallow and shortening the station platforms — all issues that former deputy Nancy Schepers is expected to be asked about when she appears at the inquiry on Wednesday afternoon.

Trust in professional bids

The inquiry lawyers have pressed witnesses about whether the city's inflexibility on the budget had ramifications for the quality of the project and whether there was political pressure to hold down the price tag.  

"Were there any discussions about whether the budget or the cap introduced a risk or increased the risk that the private sector might overpromise in its bids in order to make it under the cap or meet the budget?" commission co-counsel Kate McGrann asked former treasurer Marian Simulik on Tuesday afternoon.

Simulik not only denied any such discussions, but said that the city had confidence the consortiums bidding for the project — which were composed of giant multinational corporations — would put together professional proposals.

"We basically trusted the private sector to act reasonably and produce a document or a bid that reflected what they thought the costs were going to be," Simulik told the commission.

Pattison also said Tuesday that the fact two price-compliant proposals were submitted was proof the budget looked doable to the very experienced corporations that bid for the project.

Both Simulik and Pattison said it's not unusual for a project to be designed to budget, something inquiry lawyers have suggested could have happened.

Pattison said that sometimes "there's a number and you can't exceed it and you're prepared to [scale it back] or kill the project if you can't fit within that number."

The inquiry heard that the city's request for proposals included a contingency plan in case all the bidders came in over budget, which would have required additional approvals by council. 

Along with Schepers, John Traianopoulos of Infrastructure Ontario is also on Wednesday's hearing schedule.