City to enter into LRT settlement talks for Stage 2 delays

Ottawa city councillors have directed city manager Wendy Stephanson to proceed with a new round of light-rail transit settlement talks, while providing few details on the claims themselves. 

The motion, which came after a lengthy meeting behind closed doors on Tuesday, referenced Stage 2 projects — all of which are running behind schedule.

The city would not confirm if East-West Connectors, which is working on extensions to the Confederation Line, or TransitNext, which is in charge of the Trillium Line work, are involved. 

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Mayor Mark Sutcliffe told reporters after the meeting that cities around the world are facing similar claims linked to construction delays caused by the pandemic. 

"It's unfortunately a normal part of infrastructure projects that are being worked on during COVID, and we're trying our best to resolve them in the best interest of taxpayers," he said. 

That includes looking for another level of government to fill a substantial financial void. 

The motion called on Stephanson and the mayor to "pursue funding support from the provincial and federal governments as part of this process."

Sutcliffe would not comment on how big a hit these settlements could be to the city's coffers. 

Multiple claims involved

Early last year, the city reached an out-of-court settlement with system builder Rideau Transit Group (RTG) for claims related to delays in the Stage 1 launch. There was no mention at that time of seeking support from other levels of government.  

No specifics on the negotiated amount have been released, but sources told CBC that the back pay represents millions of dollars. 

The city's LRT legal woes stem back to 2021, when it launched a $131-million suit against the Rideau Transit Group (RTG). The builder argued it was not responsible for the delay and countersued for $225 million.

This time multiple claims are involved, though Sutcliffe wouldn't name names. 

"It's a big project. It's multiple lines. There are multiple contractors involved and everybody experienced COVID delays," Sutcliffe said, again emphasizing that this scenario is being repeated all over North America.

"Naturally, the contractors are coming to their clients and saying, 'here are our costs associated with COVID and with other issues through that. We want to resolve them.'" 

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Financial future uncertain

OC Transpo is facing a bleak financial picture, now poised to worsen, and monthly revenues are consistently falling short of projections.

The builders of the Confederation Line are also still working to address issues that have lead to derailments, speed restrictions and a growing number of shutdowns. 

"I know that people will look at this and say, 'we're settling legal claims. It must be because of the issues we've had with Ottawa's light-rail system that are unique to Ottawa.' That's not what these are," he said.

When asked how he'd respond to riders and taxpayers worried about the situation, Sutcliffe said he is also concerned with major transit budget shortfalls, declining ridership and the effect of the federal government's work-from-home policies. 

But he showed no concern with how ongoing legal discussions could be negatively impacting the city's relationship with contractors — one of many issues identified by a provincial inquiry into Ottawa's troubled LRT. 

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"The relationship is in good shape and that's why we're working to resolve these claims with our contractors," he said. "We don't want them, if we can avoid it, to go down a long, costly road toward mitigation, with a lot of frustration and expense on both sides."

Renée Amilcar, general manager of OC Transpo, was not mentioned in the motion directing settlement talks and declined a request to remain after the meeting to answer reporter questions.