Audit finds City of Edmonton was fair, minimized risk in Valley Line LRT contracts

EDITOR’S NOTE: This article initially said the report included details on TransEd’s financial loss, but that information was not in the auditor’s report. Global News regrets the error.

A new audit has found that the City of Edmonton has acted responsibly while overseeing what it can control about the Valley Line LRT project.

The audit focused on things the city can control: whether the city procured partners in an open, fair and transparent manner, designed contracts that protected the city’s finances and performed oversight without taking on additional risk to the city.

The report found that the city had done its job in those areas.

The audit did not address the selection of the P3 delivery model or anything about the project’s design or construction, including the delays in opening since the expected start date of December 2020.

TransEd, the private industry consortium contracted to build and operate the transit line, is anticipating an opening date in the fall.

“I am absolutely frustrated like all Edmontonians. This project should have been in place three years ago,” Mayor Amarjeet Sohi said.

1:43 Valley Line LRT signalling cable replacements coming

The project has been constructed under a public-private partnership (P3) agreement, and under the terms of the agreement, TransEd is responsible for any costs incurred because of delays.

TransEd is only entitled to be paid 50 per cent of the total construction contract value prior to the line opening.

When the line opens, TransEd gets a payment equal to 16.7 per cent of the construction value.

The remaining one-third of the construction value is paid out monthly for 30 years starting in December 2020. However, TransEd will not receive these monthly payments until the line is in service. The missed payments will not be deferred, the city said.

1:32 Southeast Valley Line LRT may open in fall of 2023 after cable replacement completed

Many councillors said they wished the audit had had a wider scope.

“There’s a lot of other concerns that I don’t know if we’ve had an opportunity to adequately address,” Ward Nakota Isga Coun. Andrew Knack said.

Knack asked if there would be an upcoming audit done on the other aspects of the project that Edmontonians have questions about. However, city staff said the city is not legally allowed to audit the private partner.

Sohi said he hopes that residents will have some sort of explanation for the cracked pillars, signalling cable replacements and other delays that have plagued the line so far.

“The city manager has committed to undertaking a comprehensive review of large projects such as this,” Sohi said, adding that review is underway and the report should come out in December.

If the answers aren’t satisfactory, Sohi said there’s always an option to request an external investigation into the delays.