City escalates legal dispute with RTG over troubled Confederation Line

In the face of the Confederation Line being closed indefinitely, the city is escalating its legal dispute with the builders of the troubled LRT line that experienced two derailments in as many months. 

The city issued a notice of default to the Rideau Transit Group (RTG) — the consortium comprising SNC-Lavalin, ACS Infrastructure and Ellis Don — on September 24, the city revealed late Tuesday afternoon following a three-hour closed door session between councillors, senior staff and the city's legal team, which occurred during a finance and economic development committee meeting.

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"The derailments have caused severe reputational harm to the City and to the system," writes the City's director of rail, Michael Morgan, in a letter to RTG CEO Nicolas Truchon notifying him about the default.

"RTG does not appear to appreciate the gravity of the current situation given its refusal and/or inability to implement swift and appropriate actions with adequate levels of resourcing."

The notice of default is the city's official mechanism for claiming that RTG has failed to live up to the contract between the two parties. The city issued an earlier notice of default in March 2020. In both instances, RTG does not accept that it is in default of the contract.

But this time, the city seems prepared to take additional legal action. The finance committee approved a motion Tuesday directing Morgan to have the default confirmed by the courts "as necessary." Declaring a default, and having it validated by a court of law, are necessary steps to opening up other options in the contract — including one that could allow the city to sever its 30-year maintenance relationship with RTG, worth $1 billion.

The motion also alluded to the fact that RTG submitted a plan and schedule to fix the problems, which the city found "unsatisfactory under all of the circumstances". However, no details of what RTG put forward have been released.

RTG took 3 hours to arrive at derailment

Morgan's letter to RTG provides some scathing details of the two derailments, from the city's point of view. (Under the contract, RTG is not allowed to speak with the media, and has provided no comment.)

"The City wishes to express, in the strongest possible terms, its shock and disappointment," Morgan wrote, in relation to the Sept. 19 derailment that involved 12 passengers, "which clearly raises safety concerns."

According to the letter, RTG officials didn't arrive at the site of the derailment for three hours, leaving City and Transportation Safety Board officials waiting.

As for the Aug. 8 derailment at Tunney's Pasture, the City "still does not have a root cause analysis, has not received adequate responses to its queries, and the fleet had not returned to full reliable service prior to the September derailment."

The letter also slams RTG for subcontractors, including its own maintenance arm and train-maker Alstom, for the LRT's problems, while at the same time, demanding the Alstom vehicle manager be replaced.

And for the first time, the city concedes that there may be a problem with the fundamental design of the Confederation Line.

"The derailments relate not only to the performance of the maintenance services, but also to RTG's performance of the design and construction works," Morgan writes. "Given the breadth of these breaches, the City's confidence in RTG's ability to deliver the maintenance services has been seriously eroded."