A city report is recommending Hamilton’s forthcoming $3.4-billion Light Rail Transit (LRT) system be initially operated by a private contractor, not the city.
The final analysis will be put in front of an LRT subcommittee on Monday, showing preference for a model they suggest is low-cost, provides greater cost certainty and minimizes the city’s operational risk.
Similar to Waterloo’s ION network, which a third-party international transportation operator runs, the framework would have the contractor launch the system and operate it for the first decade giving the city an option to take it over afterwards.
“(It) minimizes the risks associated with the transitions from the design and construction phase to the start-up,” an excerpt from the report said. “Commissioning operations and maintenance phases as a single third party entity would be responsible for all activities.”
The president of the union representing Hamilton Street Railway (HSR) insists it’s not the way to go and points to a public inquiry into the pitfalls of Ottawa’s rapid transit spurred on by a report that said “deliberate malfeasance” was rampant in the capital’s $2.1 billion system.
Amalgamated Transit Union (ATU) Local 107 boss Eric Tuck says two derailments in 2021 and multiple shutdowns for months at a time resulted in the city having to continue to pay for operations and maintenance even though the system was down.
“The reality is we were promised for this $3.4 billion investment that we would get a good return in terms of community benefits, such as good paying jobs, you’re not going to see that through a private consortium,” Tuck suggested.
Despite the recommendation, ultimately, the city may not have control over such a move since most elements of the Hamilton LRT deal fall under the purview of Metrolinx.
In September, a presentation to the LRT subcommittee presented the second of three reports for councillors outlining four potential operation models which included complete city control or full privatization of day-to-day operations.
Two other plans split the operation of the line between city staff and a third party.
A fifth model sought to not only take on operation but also maintenance of the line, however the city’s director of the LRT project office, Abdul Shaikh, said Metrolinx insisted on optioning that out to a third party.
“They mentioned that this should not be considered for evaluation because all of the maintenance activities will be performed by a third party,” Shaikh said.
Mike Murray, a former Region of Waterloo chief administrative officer who oversaw the region’s 19-kilometre ION system, told the LRT subcommittee in December that experience was a primary reason they went with a third-party operator in 2019.
He went on to suggest there are advantages to keeping operations and maintenance together under one contract.
Murray said going with consortium Grandlinq, which includes international transit operator Keolis, not only brought in a company that handles public transport systems all over the world but avoided “finger-pointing” amid operational issues.
“What our staff doesn’t get is finger-pointing,” he said. “They don’t get the operator saying, the system wasn’t designed properly or wasn’t built properly or poorly maintained. No, it’s on them and they have fully accepted that responsibility.”
GrandLinq is currently in charge of maintenance for Waterloo’s LRT system over a 30-year team and over operations for 10. That includes options for renewals.
It employed some 100 people at launch five years ago, including 40 operators.
However, Tuck contests Metrolinx involvement poses a difference for Hamilton since a private entity will only be accountable to the provincial agency and not the city.
“If you have a tragic accident or a derailment or something similar to what was going on in Ottawa, councillors can’t get any answers for the taxpayers,” he said. “Yet, they still have to keep paying the bill every month.”
Tuck also has concerns over the lack of cost in the study and eventual long-term profitability down the road that the city won’t see.
“When you look at … the long-term return on subways and any major higher order transit … initially it does cost a lot more, but when you keep it in-house, eventually it turns around and starts funding the rest of the system,” said Tuck.
Hamilton looking to province, feds to cover over budget bus barn
Hamilton will be renewing a call for funding help from upper levels of government after the bill for Hamilton’s new bus storage facility soared over budget.
In 2021, the upper levels of government announced they would be contributing two-thirds of funding for a $250 million structure earmarked for Wentworth Street North.
However, the lowest bid to build came in at about $330 million from Quebec-based construction company Pomerleau.
Since then, costs are up an estimated 58 per cent to $396 million, according to city staff.
Council will ask the province to allow the city to use $6 million in leftover pandemic transit grants to offset that bill, rather than having to pay the unused money back.
“It gives us a little bit of a tool to say, minister, we’re being very fiscally responsible and we are also leveraging all of the tools that we can use in our toolbox in order to ensure that the transit hub moves forward,” Ward 4’s Tammy Hwang said in a council meeting Wednesday.