Metrolinx to pay $38M to TTC
Compensation over issues with Presto fare system, LRT construction costs.
Metrolinx is set to pay the TTC almost $40 million in compensation under the terms of a deal intended to reset the organizations’ fractious partnership on the Presto fare card system, the Star has learned.
The agreement has yet to be finalized but a framework is outlined in a confidential attachment to a report that will go to the TTC board Thursday.
Spokespersons for both the TTC, which is a city agency, and Metrolinx, which is the provincial Crown corporation that oversees Presto, declined to comment on specifics of the framework, citing ongoing discussions between the two sides.
“The TTC and Metrolinx continue negotiations to resolve outstanding issues,” said TTC spokesperson Stuart Green. “Ultimately, the aim of both agencies is to work together to provide TTC customers with a modern and flexible fare payment system.”
According to a source with knowledge of the terms, Metrolinx would pay the TTC $38 million to settle claims related to Presto as well as increased costs the agency has incurred from Metrolinx’s construction of the Finch West and Eglinton Crosstown LRTS.
Both are long-standing sources of disagreement between the two agencies.
As of June 2019, the TTC had invoiced Metrolinx for $7.5 million in lost fare revenue it attributed to faulty Presto devices, but the provincial agency said at the time it was under no obligation to pay.
In October 2019, the city’s auditor general released a scathing report that concluded Presto devices likely failed more often than official statistics indicated, but there were so many gaps in the management of the program that it was impossible to say how much fare revenue the TTC was losing.
Separately, work on the provincial LRT projects has disrupted regular TTC service and periodically shut down parts of the subway network, forcing the TTC to pay to operate additional buses.
TTC officials said last year that the agency had invoiced Metrolinx $60 million for Lrtrelated costs since 2013, but the provincial organization had only paid about a quarter of that amount.
According to the public portion of the TTC report, “both parties have reconsidered their claims to achieve a good outcome for TTC customers.”
“Presto and the TTC always collaborate to improve our ways of resolving these difficult commercial issues, always in the interest of riders across the region. We continue to do so,” Metrolinx CEO Phil Verster said in a statement.
In addition to outlining a potential settlement over Presto and LRT construction, the framework also includes a proposal for a new governance structure for the fare card system that would allow for greater collaboration between the agencies.
However, the terms don’t include a firm timeline for when the TTC will be able to stop accepting older forms of payment, like tickets and tokens, and complete the switch to Presto. The agency had expected to make the transition by 2017, but the date has been repeatedly delayed. Until the TTC stops accepting older payment methods, it has to pay to operate two parallel fare systems.
The TTC says its full adoption of Presto is contingent on Metrolinx delivering key features guaranteed in the original 2012 contract. They include enabling the sale of limited-use Presto tickets on surface routes, setting up an “acceptable” thirdparty network to sell the fare cards outside the transit system and implementing open payment, which would allow riders to pay for their trips with the tap of a credit or debit card on a Presto device.
Last year, the TTC took Metrolinx to arbitration over those outstanding features, claiming the provincial agency hadn’t honoured the 2012 contract. That process is ongoing, but the two sides reached the potential new deal through parallel negotiations outside of formal arbitration.
The TTC says progress is being made on the outstanding contractual issues and if the board approves the general terms of the deal Thursday, the two agencies hope to finalize an agreement by the end of the year that would include schedules for implementing the remaining functions. Metrolinx’s board has already approved the terms in a closed-door session.
Coun. Brad Bradford (Ward 19, Beaches-east York), who sits on the TTC board, said there was “reason to be cautiously optimistic” that the two organizations are finally on the same page about Presto.
“Things were very tense, very strained. There was a long list of outstanding deliverables from Metrolinx, and certainly the board communicated that we were not happy,” he said.