Contractor will bear cost of LRT delay, city vows

Ottawa Mayor Jim Watson vowed Wednesday to make it his top priority to protect taxpayers from the growing cost of the LRT delay, threatening to withhold payments and, if necessary, go to court to recoup the city'slosses.

Last week the city gave Rideau Transit Group (RTG)a new deadline of Nov. 2tohand over control of the new $2.1-billion light rail line it's building from Tunney's Pasture to Blair Road.

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That's a delay of more than five months from the originalMay 24 handover, and means the network won't open to passengers until late November at the earliest.

On Wednesday city officials shared a series of documents that reveal more about the financial strain that wait is placing on the city. The documents include memos fromvarious elected officials and senior staff, as well astwoletters fromRTGdatedNov. 24and Feb. 5

Extra costs

The city already knewLRT-related detours are costing at least $1.9 million dollars a month, but the memos reveal the city will also incur extra costs to keep buses running, monitor construction sites and cover the general strain on the transit system because of the delay, according to city manager Steve Kanellakos.

The city doesn't expect to have a final tally of the cost of the delay until after the Confederation Line launches.

"It is the city's position that RTG needs to cover our costs," Kanellakos wrote, adding this will likely mean lengthy negotiations and some disputes with RTG.

'We are controlling the financial resources'

8 years ago

Duration 0:20

Ottawa mayor Jim Watson explains how Rideau Transit Group can be held accountable for extra light rail costs.

Watson told reporters Wednesday thathe believes the city is in a good position to negotiate with RTG because the city can withhold any number of payments from the contractor if necessary.

Dispute will goto court if necessary: mayor

The city is supposed to pay RTG a lump sum of$200 million whenthe project is complete, but the mayor said some or all of that can be held back if RTGis refusing to cover the city's delay-related expenses. The city can also withholdits monthly $4-million payments to the consortium a sum that includes maintenancecosts after construction is completed.

Watson said he would be willing to take the contractor to court to recover costs if necessary.

The next monthly update to councillors on the light rail network will come March 6 at the finance and economic development committee.

The city estimates it will cost RTG as much as $8 million to $10 million a month for the ongoing construction costs, which RTG must cover because the company agreed to a fixed price in the contract.