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Light rail delays could cost Ottawa $34.4-million if RTG doesn't pay

The city released an updated financial statement, saying it expects $35-million from the Rideau Transit Group, leaving it with $600,000 in savings.
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2018-07-13 blair station lrt 2
Blair LRT station in Ottawa. Jason White/ OttawaMatters

The City of Ottawa could be on the hook for $34.4-million in losses, thanks to more than a year's worth of delays in getting its new light rail transit system up and running, if the Rideau Transit Group refuses to pay.

An updated financial statement, released Thursday, took into account:

  • Additional costs for extended bus operations and detours
  • Reduced revenue due to delays in forecasted ridership increases
  • Mitigations for pre-rail service delivery
  • Savings from the elimination of the monthly payments to RTG for maintenance services and private debt repayment during the delay period
  • Savings from the elimination of direct costs for Transit rail operations
  • Recoveries from RTG in accordance with the Project Agreement related to lane closure costs
  • Liquidated damages for repeated failures to achieve RSA by the contract date

It all added up to a net operating cost of $1.5-million plus a net capital cost increase of $32.9-million, based on a thirteen-month delay from May 24, 2018 to the end of June 2019. 

But the city hopes to get $35-million from the Rideau Transit Group to offset all of those costs, which would actually leave $600,000 in savings. 

Per its contract with RTG, the city says it is also owed $1-million in liquidated damages for each handover deadline missed. RTG has submitted and missed three proposed deadline dates: May 24, 2018, November 2, 2018, and March 31, 2019.




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Mike Vlasveld

About the Author: Mike Vlasveld

Mike Vlasveld, Village Media Community Editor, OttawaMatters.com
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