City holding back millions in payments to LRT consortium

O-Train pic

The City of Ottawa is continuing to withhold millions of dollars in payments to the consortium that built the Confederation LRT Line due to ongoing service issues that have plagued the $2.1-billion system since it opened last year.

In a memo to the mayor, councillors and transit commissioners on Wednesday, OC Transpo boss John Manconi said the Rideau Transit Group will be getting a cheque for $17.45 million, or just over a quarter of the roughly $60 million it is seeking under its service agreement with the city.

While the city is prepared to pay $5.47 million of the $17.68 million that RTG is billing for services from October 2019 to January 2020, it’s putting a freeze on all payments for February to April ​– a total of nearly $13 million. Manconi said the city is withholding the payments due to a range of service problems that included “technical issues with wheel flats and arcing issues.” 

Manconi said that RTG has been able to “improve its performance” since May, noting that “significantly reduced ridership levels” during the COVID-19 pandemic resulted in fewer trains being required and fewer service issues. As a result, the city is paying $11.97 million of the $12.66 million owed to the consortium for the period from May to July.

The city is also continuing to withhold $16 million until RTG is able to consistently operate 15 trains during peak periods, something it pledged would happen by Aug. 4.

“Although RTG has recently been successful in running 15 double-car trains, it cannot do so consistently due to the wheel cracking issue, which requires ongoing safety inspections,” Manconi said. 

He said RTG is now anticipating 15 trains will be regularly available by Sept. 8, adding the city will pay out the $16 million should the service issues be resolved by that time.