City of Ottawa taps SNC-Lavalin, international consortium to build LRT extensions; price tag rises by $1.2B
The City of Ottawa has tapped Montreal-based engineering giant SNC-Lavalin and international construction consortium East West Connectors to design and build Stage 2 of Ottawa’s light-rail transit system, extensions now projected to be $1.2 billion more than originally planned.
For a price of nearly $4.7 billion, the second major phase of Ottawa’s LRT project will add 44 kilometres and 24 new stations to the O-Train network by 2025, two years later than initially anticipated, city officials announced on Friday.
TransitNEXT, a wholly owned subsidiary of SNC-Lavalin, is the city’s top choice to construct the Trillium Line’s southern extension to Riverside South. Friday’s news comes while the massive engineering firm is entangled in an explosive political controversy on Parliament Hill.
SNC-Lavalin is already involved in Ottawa’s LRT construction as one of three partners that make up the Rideau Transit Group (RTG), the consortium building the $2.1-billion, 13-stop Confederation Line, which has yet to be delivered to the city and will likely open about a year behind schedule.
For the new east and west arms of the Confederation Line, the city is recommending East West Connectors (EWC) — comprised of U.S.-based Kiewit Corp. and French firm Vinci — for the job.
City councillors will consider the proposed contracts and the city’s most recent plan for Stage 2 at a special meeting on Feb. 27. Council will vote on the matter the following week, on March 6.
If everything is approved, shovels will hit the ground this summer for Stage 2, Chris Swail, the city’s director of O-Train planning, said after Friday’s briefing. City officials said the incomplete Confederation Line won’t hold up Stage 2 construction.
Stage 2 extensions to cost nearly $4.7B in total; councillors express concern about time for public feedback
Some councillors appeared bewildered on Friday by Stage 2’s new price tag, up from the previous estimate of approximately $3.4 billion.
Swail said the “increased scope” of Stage 2 and “market pressures” caused the project’s overall cost to rise. SNC Lavalin and EWC each competed against two other finalists for the Stage 2 contracts; their bids were “by far” the cheapest, Swail said.
The O-Train planning director said the federal government and the province of Ontario are each kicking in $1 billion for Stage 2 – although the Ford government has yet to formally confirm its contribution. But the rise in the project’s total cost now leaves the city covering about 50 per cent of the bill.
The city will have to finance the project, in part, by borrowing money in the short term, Swail told reporters after the briefing, but emphasized the city will save money over the long term through the O-Train system’s maintenance and growth.
Coun. Diane Deans, former chair of the city’s transit commission, decried council’s “tight timeline” to review, debate and make a decision on the revised Stage 2 plans and contracts.
“For me… this is a city building project, it’s fundamental to our future, and the public who are paying the bill deserve to have a say and this is really taking the public out of the process with this tight timeline,” Deans told reporters after the briefing.
In response to several councillors’ concerns about public consultation, Swail said during the briefing that residents are encouraged to attend and voice their feedback at council’s special meeting on Feb. 27 and the city will support councillors representing “key” areas affected by Stage 2 LRT who want to organize public sessions.
Swail said the city needs to have everything locked and loaded by the end of March so the pricing that SNC-Lavalin and EWC submitted in their bids holds.
If city council approves the proposed contracts, SNC-Lavalin will be responsible for adding two stations to the existing north-south Trillium Line and extending the train from Greenboro Station to Limebank Road, with a spur line to the Ottawa International Airport. That southern arm is expected to cost around $663 million and is now scheduled to open in 2022. (The existing Trillium Line will be closed to riders for construction from May 2020 to September 2022.)
Meanwhile, the Confederation Line will be expanded to Trim Road in the east end and is now scheduled to open in 2024. The western extension will go out to Moodie Drive, with a spur connecting to Baseline Road (right by Algonquin College) from Lincoln Fields station, all opening in 2025.
In his opening remarks on Friday, Mayor Jim Watson said Stage 2, once completed, will bring 77 per cent of Ottawa’s residents within five kilometres of light rail.
“Stage 2 will really change the way we move around Ottawa,” Watson said.
SNC-Lavalin chosen for Trillium LRT extension amidst political controversy
Deans asked Swail about the risk of awarding SNC-Lavalin a major contract at a time when the firm is facing criminal charges for corruption and fraud related to its business activities in Libya – a criminal case in which unknown individuals in the Prime Ministers’ Office allegedly pressured former federal Attorney General and justice minister Jody Wilson-Raybould to intervene.
If convicted on those charges, the construction giant could be banned from bidding on government contracts for a decade.
Deans also noted SNC-Lavalin – along with its RTG partners – is “many months behind” on delivering the Confederation Line.
“I guess I’m just wondering why we would reward that behaviour by giving them another large contract in this city, and given their more precarious position now and the potential for loss of income in the future … could it create a jeopardy for us and delay the project if they get into more trouble?” Deans said.
“Running a procurement process … is not about rewarding anyone,” Swail responded. “It’s about running a process and evaluating that process and whoever has the strongest bid … is the winner. That’s what we did and there was no reason to prohibit anyone coming into this procurement process.”
Swail said SNC-Lavalin fully disclosed the legal charges laid against them in their bid and the contract will protect the City from issues like bankruptcy or “any kind of potential failure to perform.”
Asked by a reporter about the possible risk of hiring a single company to work on an LRT extension as opposed to a consortium, Swail said evaluation teams saw no risk.
“They’re a strong team that’s delivered strong results, right across the country and across the world,” Swail said of SNC-Lavalin.
SNC-Lavalin has also worked on Vancouver’s Canada Line and the Calgary West LRT. For its part, Kiewit Corp. has worked on the Waterloo ION trains, while Vinci is known for its work on the Lusail LRT in Qatar.
New contracts to include stronger penalties
Initially contracted to complete the Confederation Line in late May 2018, RTG has now blown past two deadlines and the City don’t believe the consortium will make its third deadline of March 31, 2019. RTG was fined $1 million for missing the second deadline and the City has withheld $262 million in “milestone payments” from the consortium.
Building on lessons learned from Stage 1, Swail said on Friday that the contractors in Stage 2 will face stronger penalties if they don’t notify the City within 100 days that they will miss their deadlines. If deadlines are repeatedly not met, the City will retain the power to intervene, Swail said.
Once completed, the entire O-Train network will span almost 64 kilometres and include 41 stations (29 along the Confederation Line and 12 along the Trillium Line).
Last spring, city council approved an environmental assessment for a possible $1.85-billion, Stage 3 LRT expansion that would pass through the western suburb of Kanata. The city is conducting a similar study into extending LRT to Barrhaven, another suburb southwest of downtown Ottawa.
— With a file from Amanda Connolly
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