LRT ROLLBACK
Transpo negotiates $100,000 discount to run fewer trains amid low ridership
OC Transpo has negotiated a $100,000 reduction in fees to Rideau Transit Group in exchange for cutting the number of trains during peak morning hours for two months. It's an effort to trim costs during a period of lower ridership.
OC Transpo is asking the LRT contractor to reduce the number of trains during the morning peak period for two months in exchange for $100,000, prompting one councillor to accuse management of giving Rideau Transit Group a sweetheart deal.
“We're going to go down to five-minute headways for $100,000?” Coun. Catherine McKenney asked transportation general manager John Manconi during a transit commission meeting Wednesday.
“They are so getting off the hook here again.”
Manconi mounted a swift defence and took offence at McKenney's criticism.
“I squeezed that out of them,” Manconi said of the $100,000, adding that RTG didn't have to provide any discounts for reducing the number of trains.
RTG, through its upkeep arm Rideau Transit Maintenance, makes trains available for Transpo's scheduled service.
Transpo has required 15 double-car trains for morning peakhour service. Although the $2.1-billion Confederation Line launched in September 2019, it wasn't until early in August 2020 that RTG was able to meet the 15-train requirement.
Because the COVID -19 pandemic has severely stunted ridership, Transpo has decided it can get by with 11 trains for morning peak service in March and April, allowing RTG to get ahead with any upgrades and maintenance work.
Transpo would also save $50,000 to $60,000 on electricity over the two months.
Manconi has told the commission in the past that the fixed-price contract with RTG doesn't allow Transpo to adjust its payments to the contractor if Transpo wants to reduce train service.
However, he said Wednesday he managed to negotiate with RTG a $100,000 reduction in service payments, which usually run in the $4-million range each month.
Manconi said the four fewer trains represent a total LRT service reduction of six per cent, and as he pointed out during a news conference after the commission meeting, that would equal $240,000 on a $4-million monthly payment.
The LRT service reduction is more than a straight cash play for Transpo. RTG continues to swap out the wheels on vehicles cracked wheels were discovered last year. Sixteen trains have gone through wheel replacements so far and the Transportation Safety Board continues to investigate.
Plus, RTG is still fixing issues tied to the notice of contract default issued by the city in March 2020. Five out of seven items in the rectification plan have been completed, with an improvement in the vehicle auxiliary power and a “fine-tuning ” of braking systems outstanding.
Temporarily reducing LRT service will give RTG the opportunity to gain ground on the improvements, Manconi said.
“There's minor things that can always get done to contribute to the customer experience and reliability,” he said.
“We believe it's the right thing to do.”
On the other hand, the health of the transit budget could become a real problem as Transpo gets closer to spring. There's no certainty that upper governments will bail out municipal transit operations after a first wave of financial assistance runs out at the end of March.
To find savings, Transpo could delay capital projects or, in a doomsday scenario, cut transit service.
Ridership in 2020 was about 28 per cent of what Transpo would expect
We're going to go down to five-minute headways for $100,000? They are so getting off the hook here again.
in a non-pandemic world. In January 2021, ridership was 18 per cent of regular levels, and February has been tracking at 21 per cent.
Transpo's planning director, Pat Scrimgeour, estimated the LRT-specific ridership at 10 per cent or less of normal levels.
On the bright side, the LRT system is going through a period of high performance, albeit in a low-ridership environment.
Operations director Troy Charter said Transpo has been delivering 98 per cent of scheduled LRT service each month since September, including during the winter. RTG upgraded the track-switch heaters ahead of the current winter season in response to one of the items in the LRT rectification plan.
Looming over the Stage 1 LRT project is a dispute between the city and RTG involving millions of dollars related to construction delays and service reliability.
Manconi said the $100,000 deal with RTG won't hurt the city's leverage in the larger contract fight, noting that the city's legal department signs off on all side agreements.