Ottawa outlines $34.4 million in extra costs for LRT delays

LRT ottawa

Ontario Construction News staff writer

Ottawa’s deputy city treasurer says the year-long delay in completing the first phase of Ottawa’s Light Rail Transit System has cost the city $34.4 million so far – but the city aims to recover this money from the Rideau Transit Group (RTG) consortium building the $2.1 billion Confederation Line.

Isabelle Jasmin says in a June 20 memo to Mayor Jim Watson and city council members that the cost will likely be even more, since the numbers in it were based on completing the project by June 30.  RTG says it is now aiming to complete the work by mid-August but even that deadline is uncertain, given that it has missed four earlier targets.

The previous cost estimate of $25 million was issued when RTG expected the project would be completed by March. The contract originally called for the work to be completed by May 2018.

Extra costs include the requirement to keep buses running longer than expected, extend detours and pay drivers not just overtime, but also premiums to work additional hours. The city also must pay to keep its rail office open longer than anticipated.

Since the last memo outlining delay costs, the city had already paid out $6.6 million to drivers in “mitigation” —  incentives given to drivers to take on additional hours.

There are some offsetting savings.  The city is collecting interest on the $260 million still due to RTG, and it hasn’t needed to pay the consortium for the unfinished system’s maintenance costs.

Nevertheless, the city calculates it has still incurred $34.4 million in costs.

Watson has asserted that RTG will need to cover virtually all of these expenses, and it will deduct them from its final payment. The RTG could disagree, and then the matter will end up in the courts.

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