OC Transpo expects to recover loss from LRT delay

The transit commission has approved a $14-million increase to OC Transpo’s 2018 operating expenses due to the delayed opening of the Confederation LRT Line, but the transit agency says the extra funds can be covered by savings in the LRT contract.

According to Transpo, $10.8 million in extra costs for running bus detours until the end of November — an amount plugged into the capital budget — will be offset by the “payments made by RTG under the project agreement.”

RTG is the Rideau Transit Group, the consortium building the $2.1-billion LRT line.

The line was originally scheduled to be turned over to Transpo on May 24. The new handover date is Nov. 2. After that date, Transpo will test the system and get it ready for the public, ideally by the end of November.

Transpo expects to terminate up to 480 positions in the switch to LRT, according to a report prepared for Wednesday’s transit commission meeting.

Calling it a “delicate balancing act,” transportation services general manager John Manconi said the agency is trying to minimize lay-offs as much as possible.

The total severance payments will be between $5.5 and $7 million, but the city has already budgeted for the higher number through its long-range financial forecasting. The projected decrease in positions is lower than the estimates from two years ago, when Transpo said more than 600 positions would be eliminated.

OC Transpo’s first quarter results showed a surplus of $1.084 million. The surplus was mainly due to savings related to unfilled vacancies and lower fuel costs, and was offset by higher support-services expenditures and a shortfall in fare revenue.