City paid LRT contractor $4.5M despite claims to the contrary

After weeks of declaring it hadn't paid a penny for LRT maintenance since the glitch-plagued Confederation Line launch, it turns out the City of Ottawa did fork over $4.5 million last fall.

The city was "contractually obligated" to pay Rideau Transit Maintenance (RTM) for the month of September, according to Troy Charter, OC Transpo's director of operations. But that's not what city officials have been saying for months.

Following a transit commission meeting on Nov. 6, OC Transpo boss John Manconi told reporters the city would be holding back funds from RTM for "September and then October."

"Also, the mayor told us we're not paying them until this is rectified," Manconi added at the time.

As recently as mid-January, during a news conference about a downed electrical cable, Charter said: "RTM, I don't believe, has received a monthly payment."

But that turned out to be untrue. On Friday, Charter confirmed an invoice for $4,562,000 was paid to RTM in mid- to late-November, adding "they haven't received a penny since then."

Pay based on performance

RTM, an extension of Rideau Transit Group, the consortium that built the $2.1-billion Confederation Line, is responsible for keeping it in good working order for 30 years, a contract worth $1 billion over its decades-long lifespan. 

The city pays RTM month by month, but there are certain performance measures the company needs to meet to be paid in full; for example, the trains must travel a minimum number of kilometres.

Matthew Kupfer/CBC

Because the Confederation Line has experienced a litany of delays, shortages and service interruptions, the city maintained RTM hadn't been paid since the system opened its doors to the public in mid-September.

But what hasn't been known until now is that the contract compelled the city to pay RTM for that first month, no matter what. Any issues that arise are to result in deductions in subsequent months.

Asked why the city didn't appear to understand this, or at least failed to clearly convey this detail to the public, Charter said: "We have been following all the requirements under the [project agreement] and we're leveraging everything we can to make sure that they are providing that reliable service that our customers expect."