Montreal e-rail project cost rises to $5.9B

Caisse confident of government help, announces new station designs

The Caisse du dépôt et placement du Québec is chugging along with its proposed electric rail network for Montreal, adding three new stations that will push the total cost up by $400 million to $5.9 billion.

The pension fund manager has committed $3.1 billion to the project and the City of Montreal is chipping in $100 million for the new stations, but Caisse CEO Michael Sabia says he’s not worried that with plans to break ground in July 2017 there are still two big pieces missing — commitments from either the province or federal governments to cover the rest.

“My level of confidence in achieving financing is very high ... I think that there’s actually a very big appetite to participate in the financing of this project,” said Sabia at a news conference Friday to announce the Réseau électrique métropolitain’s new station designs.

“This being said — and it’s very reasonable — there’s still work to be done with the government of Quebec and Canada to finalize the details.”

Sabia’s confidence in Quebec’s participation may have been bolstered by the fact that this announcement was made alongside provincial Liberal Transport Minister Laurent Lessard who said that the government has been interested in this project since its inception.

“If today the Government of Quebec is not mentioning any amount it’s normal in the framework of Infrastructure Canada that we need to agree on the sharing of these expenses and these investments,” said Lessard

On the federal side, Sabia said the Caisse’s infrastructure division, CDPQ Infra, has been in constant contact with Ottawa and expects a response from both levels of government within the next three months.

The federal Liberals have said they hope to push $95 billion in new infrastructure money out the door over the next 12 years. “Phase one” of their infrastructure plan was to commit just $11.9 billion over five years to priority projects. “Phase two,” however, plans for a significant public investment in transit, “green” infrastructure and social infrastructure.

Sabia says that the 67-kilometre, 27-station light rail network would fit in not only with the government’s financing plans, but will also turn a profit that will be returned to the pension funds from which the Caisse collects capital.

“We don’t do things unless we’re going to earn a commercial return,” he said. “I call this a virtuous circle where we meet the needs of Montrealers today, and in meeting those needs, we strengthen their retirement funds for the future.”

The Caisse is Canada’s secondlargest public pension fund manager, with about $255 billion of net assets under management as of June 30.

The rail line would link downtown Montreal, the city’s West Island, suburbs on the south shore of the St. Lawrence River and Pierre Elliott Trudeau International Airport. The three new stations would all be located in downtown Montreal including one in the city’s business district.

If completed as planned, the Caisse says it would be the thirdlargest automated transportation system in the world, after Dubai and Vancouver.

The Caisse also said Friday that if the governments do agree to fund the project, submission for construction proposals will be due in spring 2017, with service beginning at the end of 2020.