City of Ottawa staff say another $60 million is needed "immediately" for the ongoing construction of Stage 2 of the O-Train, with almost half that money being used to top up a contingency fund that is almost empty long before any of the three extended rail lines has opened.
While $25 million would go to the contingency fund, the other $35 million is needed for utilities, according to a new report that goes to the finance and economic development committee on June 28. An unexpected number of hydro and gas lines have had to be relocated during construction.
"The Stage 2 LRT project requires additional funding immediately to support unforeseen project costs that have an overall net benefit to the city's transit system, as well as new unplanned utility costs that are essential to complete the construction," write transit general manager Renée Amilcar and city treasurer Wendy Stephanson.
Council approved a $4.66 billion budget in 2019 to expand the Confederation Line east to Trim Road and west to Moodie Drive, while taking the diesel Trillium Line south to Riverside South and the airport.
That included a contingency fund of about three per cent, or $152.5 million, to cover price increases or refinements to the design, staff explain.
None of the three rail extensions has yet to open — the southern and western extensions are even deemed to be behind their planned openings in 2022 and 2025, respectively — but the contingency fund has just $18 million remaining and that's not enough for the expected cost overruns.
City staff explain many changes have been made since the contracts were awarded in 2019 to Kiewit-Eurovia-Vinci and to SNC-Lavalin in order to improve customer experience. For instance, riders will be better protected from the elements at Limebank Station in the south, and there will be more walls to baffle noise along Highway 174.
Meanwhile, the switch heaters on the Confederation Line will now be heated by gas instead of electricity and a surplus wheel lathe has been installed at the Belfast maintenance yard, both of which were hard-learned lessons after Stage 1 of LRT saw switches that got stuck in winter and wheels that developed flat spots.
The $60 million would mainly be funded through debt, city staff suggest, and note that any extra funding needs for Stage 2 LRT will be assessed again in 2023.
The request for more funding comes as a public inquiry investigates the financial and technical dealings during Stage 1 of the LRT in great detail. The inquiry has heard during public hearings that the $2.1 billion price tag for the initial trunk and tunnel of the Confederation Line was only an early estimate but that politicians turned that number into the budget to which the project was held.
Staff note in their new report that the Stage 1 contingency budget was $115 million, or 5.1 per cent of the total, and a greater percentage than the contingency fund for Stage 2.