When it comes to the LRT contract, there are no ideal options
Some councillors support the 'nuclear' option: breaking the 30-year deal with RTM
When it comes to Ottawa's struggling LRT, last week was the week that appeared to break the backs of some city councillors — and no wonder.
A record low number of light rail trains were available at one point — just seven of the 17 we own — and six different train issues in back-to-back rush hours forced some passengers to disembark from their trains and walk along the tracks, including in the tunnel.
It's not the first time a Confederation Line snafu has created widespread chaos, but politicians and regular folk alike would really like it to be the last.
That's why a number of city councillors are now demanding the city walk away from the 30-year deal with Rideau Transit Maintenance (RTM), the Confederation Line contractor — or at the very least, take a closer look at what ripping up that contract would entail.
Even Coun. Allan Hubley, the city's transit commission chair, told a local radio station he's asked to sit down with the city manager to see if it's possible to recruit another company to do the work that RTM seems unable to manage.
With a number of LRT-related documents slated to be released today, we expect to get a better idea of exactly what the options might be. It's unlikely that any of them are very good.
City out of leverage
The current situation is clearly enraging many.
Coun. Catherine McKenney has called the state of transit in Ottawa an "embarrassment," while Coun. Carol Anne Meehan has described the Confederation Line as "a lemon."
Coun. Tim Tierney said in his latest newsletter to constituents that if RTM "can't deliver ... it's 'three strikes and you're out.'"
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The city is playing as much hardball as possible in its efforts to get RTM to offer more reliable service, employing tactics like admonishing them in public, having the mayor call train supplier Alstom in France to lambaste their CEO, and pressuring the group to hire British consultants.
Most importantly, the city hasn't paid RTM yet — except, of course, for that surprise multi-million dollar cheque issued for September — so what else can it do?
Breaking contract the 'nuclear' option
Could the city get out of the contract? In theory, yes.
"There are provisions in the contract for the city to step in, to remove RTM, to take all kinds of severe action against the consortium and its various holding companies," city manager Steve Kanellakos told transit commission back in November.
"But when you go there, you're going basically nuclear. And you're creating another problem for yourself, because there aren't a lot of people around just waiting to step in and take over $2-billion projects."
Neither councillors nor the public are privy to the financial details of the arrangement with RTM.
But we do know this: RTM is set to make hundreds of millions maintaining the Confederation Line, and it's hardly about to walk away quietly.
RTM contract worth $2B over decades
RTM has a 30-year contract to take care of the line, worth about $1 billion over its life. Sure, except for the $4.5-million payment, RTM hasn't received a cent so far — but we're only on the fifth month of the three-decade deal.
And the city has literally doubled-down on RTM.
Back in 2017, council agreed to sign a sole-sourced contract with Rideau Transit worth $492 million in capital, for things like expanding the Belfast maintenance yard and buying more Alstom Citiadis Spirit trains (that's right, we've already purchased 38 more of these light rail cars, which are just like the first 34).
At the time, council also handed over the maintenance for Stage 2 to RTM, reasoning it would be simpler to have one company look after the entire network until 2048. That extension is worth about another $1 billion.
All this to say, it's hard to imagine RTM would allow the city to break a $2-billion maintenance contract without a fight — a big one.
Remember the old controversial plan to electrify and extend what is now the Trillium Line, and which we used to call the O-Train? Former mayor Larry O'Brien successfully campaigned in 2006 to cancel a signed contract with Siemens and convinced the new council to go along with it.
In the end, the city had to pay out almost $37 million in settlements, and that was for a $755-million deal. Imagine what it would cost to get out of a $2-billion contract?
Coun. Jan Harder, in fact, has been considering just that.
That's why, in a Friday video update to constituents, she called last week's LRT performance "a disaster … a royal mess" but added that those who want to rip up the maintenance contract "have lost their minds."
Making LRT reliable could take year or more
Now, the two situations aren't exactly the same.
Siemens was virtually blameless when council walked away in 2006. One can't say the same for RTM, which has arguably not performed as promised.
As Kanellakos alluded to, the contract includes scenarios in which the city could kill the deal if RTM hasn't lived up to its part of the bargain. But exactly what those scenarios are, and at what point in the lifespan of this long partnership they kick in, isn't at all clear.
The fact is that it will take a year of work, maybe more, to make the Confederation Line truly reliable. And money — lots of money.
Take the so-called arc flashes that are causing power to be cut to trains. Peter Lauch, the CEO of RTM, said last month that although it's found a good hack to mitigate the problem, the long-term solution is to replace a piece of equipment, a process "that's about 12 months away."
Last week, Lauch insisted the Alstom Citadis Spirit trains are ultimately "good vehicles". He conceded they are "obviously having issues," but said the fixes RTM has put in place are working.
That may be fine in the short term, but RTM has also been unable to tell us what the root cause is for many problems, from door issues to the smell in Parliament station.
As taxpayers, do we want to take on the myriad fights to fix the LRT system or do we want to pressure RTM to do it?
The first option seems awfully daunting — both expensive and time-consuming — and the second option is a lot like what the city is already doing, with less than satisfactory results.
It's not a great choice, but it's the scenario that council signed us up for when it approved the contract for the Confederation Line back in 2012, and again in 2017 when councillors deepened our financial commitment to Rideau Transit before we had any evidence of the group's performance.
And turning back the clock isn't one of the options facing council this week.
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