Thales Canada plans to have the signalling system on Edmonton's Metro Line LRT fully operational by December, according to a report prepared for city council.
But the city has a backup plan, just in case.
The alternative plan involves extending the signalling system used on the older Capital Line to parts of the Metro Line, said the report, expected to discussed by council on Tuesday.
The report said the city will start installing that extended system in early 2019, if required. Consultants and contractors have been contacted to help with development and implementation.
The battle between the city and Thales has stretched on for years.
In May, the city issued a notice of default on the $55-million contract after Thales failed to fix the system by council's April 30 deadline.
The Metro Line LRT, with stops at MacEwan University, the Royal Alexandra Hospital and NAIT, opened in 2015, more than a year behind schedule.
But the signalling system on the line has still not been fully merged with the one on the Capital Line LRT, resulting in slower trains and reduced frequencies.