After the provincial government pulled its share of funding for the project, Calgary city council has decided to terminate the Green Line LRT project, but now faces billions in costs to wind down the work.
Early estimates from city administration showed a wind-down would cost at minimum $850 million, and combined with $1.3 billion spent on the project to date, the total costs to the city surpass $2.1 billion.
“We now have spent $2.1 billion literally on a train to nowhere, zero kilometres,” Ward 11 Coun. Kourtney Penner said. “Deeply, deeply frustrating.”
City council voted 10-5 in favour of winding down the project following a lengthy debate both in public and behind closed doors; councillors Sonya Sharp, Andre Chabot, Evan Spencer, Sean Chu and Dan McLean voted against.
The move triggers a process that would see all engineering and design work halted, with a full wind-down of work to be completed by the end of the year.
More than 800 staff members working on the Green Line will begin transitioning off the job beginning Wednesday, with a small team remaining to oversee the project’s wind-down.
“There is no victory in any of this, there are no political points to be scored,” Mayor Jyoti Gondek told reporters. “This is a tragic day for the people that are involved in this project and for the city overall.”
City administration will now begin looking at ways to transfer project management of the Green Line to the provincial government.
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Some construction work in the downtown core and Ogden will continue until completion next year.
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However, city officials noted more costs could come as more than 70 signed contracts would need to be closed.
While most of those contracts have provisions for a wind-down, officials said there are potential legal risks that will still need to be assessed.
As part of council’s decision, Ward 8 Coun. Courtney Walcott added an amendment that asks the city to seek a legal opinion on how to transfer those costs and legal liability to the provincial government.
“We need to make sure that any negotiations we go into from this point forward, that the City of Calgary is not going to end up bankrupt because of provincial whims,” Walcott said during debate.
The Green Line has been in limbo since Transportation Minister Devin Dreeshen sent a letter to Gondek and city council informing them of the province’s intention to withhold its $1.53-billion share of funding.
That followed a council decision to shorten the first phase of the line due to cost escalations that brought the total budget to $6.2 billion.
Instead, the province is seeking a third-party engineering firm to find a new alignment for the Green Line that would travel at grade from downtown to Seton within the current budget — a process Dreeshen has told Global News he hopes can be complete by the end of the year.
With this in mind, Sharp tried to stall a wind-down and pause the project after several councillors raised concerns, but those efforts were defeated by city council.
“This is a lot of money and it could put the city in serious jeopardy financially,” McLean told reporters. “What’s wrong with a three-month pause?”
However, administration noted a pause could cost the city as much as $30 million every month, and moving forward would be “untenable” without the province’s share of funding.
“We immediately thought of options but there’s really no other option right now,” city chief administrative officer David Duckworth told council.
Through Walcott’s amendment, city officials will also draft a “set of criteria” and requirements the city has for a future Green Line LRT, if the province takes over the project.
In a statement posted to social media, Dreeshen called council’s decision “unfortunate” and noted that the province would not cover any costs to wind down the project.
“Regarding wind-down costs, I don’t see why Alberta taxpayers should be asked to pay for decade-long mismanagement and decisions of past mayors and city council,” his statement read. “Further, the city is more than welcome to proceed with the project without provincial funding should they insist that the cost of the wind-down is more costly than the committed provincial contribution.”
The statement went on to say the provincial contribution remains on the table if the city “changes its mind” and builds a Green Line that “serves the needs of Calgary commuters.”
A report outlining the impact of the Green Line’s wind-down costs on this year’s city budget deliberations will be delivered in November, with an update on the wind-down coming early next year.
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