City expects to pay LRT contractor for some work
The city doesn’t think it can hold back every dime from the Rideau Transit Group for rocky maintenance on the LRT system during the last few months of 2019.
In a memo to city council, rail construction director Michael Morgan told politicians there’s a good chance RTG will receive some kind of maintenance payment for that period.
The city hasn’t made maintenance payments to RTG for October 2019 through January in protest of the company’s performance.
“The city is currently working through the contract dispute resolution process for this period to ensure that we meet all of our contractual obligations under the project agreement,” Morgan wrote in the memo.
“Based on an initial review of the invoice period for October to January reflecting the system performance of September to December, we do expect to make adjusted maintenance payments to RTG.”
Morgan didn’t say in the memo how much the city figures it owes RTG, but he said staff will tell council first before transferring any money.
The city hasn’t received maintenance invoices yet for February and March
The only maintenance payments RTG has received from the city were $165,000 for the last day of August, since the city only just received the completed system, and $4.99 million for September.
The Confederation Line opened to the public Sept. 14.
The stability of the 12.5-kilometre LRT system took a nosedive starting in October, convincing the city to hold back maintenance payments from RTG, whose Rideau Transit Maintenance arm is responsible for the system upkeep under a 30-year contract.
The maintenance contract allows deductions to the payment based on service delivery, and for months that was the one hammer the city was holding over RTG as it pressed the company to fix the long list of problems with the $2.1-billion LRT system.
The city has also been billing RTG for extraordinary measures required to prop the beleaguered LRT system, like a supplementary bus service.
In addition, the city says it believes RTG should pay for the revenue lost during a transit fare freeze implemented to recognize customer dissatisfaction with the unreliable electric rail service.
It’s been clear, however, that RTG was going to dispute any decision by the city to not pay the company, or if the city claimed extra costs.
Council is waiting to hear how RTG is making out fixing all the problems with the LRT system since the city issued a notice of default on March 10. The city sent RTG a list of the problems and demanded a remediation plan by March 31.
However, when city staff reviewed the plan, they didn’t find timelines attached to the repairs or a date when LRT service would be stable.
OC Transpo has reduced transit service during the COVID -19 pandemic closures across Ottawa, including on the LRT system. Transpo shut down the LRT system all of last weekend, and will do the same Saturday through Wednesday, to give RTG an opportunity to make necessary adjustments without having to worry about delivering trains for daily service.
Council is expected to receive an update on the LRT fixes during a meeting Wednesday.