Ontario will cover any LRT construction cost overages — but running the trains is up to the city
The province will take responsibility for any construction budget overruns associated with a resurrected Hamilton LRT, government officials told The Spectator.
But provincial transit leaders will tell councillors Wednesday the planned $3.4-billion project cannot go ahead unless the city agrees to handle millions in annual operating and maintenance costs.
Ideally, they'd like that agreement in principle sooner, rather than later.
James Nowlan, assistant deputy minister for the Ministry of Transportation, and Phil Verster, head of provincial transit agency Metrolinx, will be on the virtual hot seat this morning to take questions about the contentious project at a city meeting starting at 9:30 a.m.
Federal Liberal Infrastructure Minister Catherine McKenna and provincial Tory Transportation Minister Caroline Mulroney jointly announced $3.4 billion in May to restart a 14-kilometre LRT project that was cancelled over budget woes just 16 months ago.
Wary councillors have said they felt left out of the decision-making process and want to know more about what LRT 2.0 would cost local taxpayers. Reaction to the project in the community is also mixed.
Provincial officials with knowledge about the project, but who are not authorized to speak about the plan, told The Spectator Ontario is willing to take responsibility for capital cost overages on the project.
But they stressed all operating and maintenance costs are up to the city to handle.
An updated high-level gross estimate" for the cost of operating the line long-term will be provided to councillors, officials said, but it will not differ substantially than the startling $950-million, 30-year estimate used by the Tory government to help justify cancelling the original LRT in 2019.
That estimate averages out to almost $31 million a year, but provincial officials said the number accounts for inflation over three decades and the Year 1" operating cost would be lower.
That estimate also excludes offsetting fare estimates and any savings from taking buses out of service as a result of the light rail line, for example. It's ultimately up to the city to determine the extent of those savings, provincial officials said, based on fare rates, train frequency and changes to the existing HSR bus system.
Mayor Fred Eisenberger is planning to bring forward a motion today asking for a memorandum of agreement between the city and province to come back to council for consideration as soon as possible.
The provincial officials said an agreement in principle" on city assumption of operating and maintenance costs needs to be in place before serious procurement work on the LRT can go ahead.
There is no deadline set for that agreement - but the province has an election coming up in June 2022 and the city will go to the polls that fall.
The Spectator will update this story as today's meeting progresses.
Matthew Van Dongen is a Hamilton-based reporter covering transportation for The Spectator. Reach him via email: mvandongen@thespec.com