Eglinton Crosstown builder taking legal action against Metrolinx over changes sought by TTC

A consortium of four companies building Toronto's Eglinton Crosstown project says it is taking legal action against Metrolinx over changes to the transit line wanted by the TTC.

In a statement on Tuesday, Crosslinx Transit Solutions (CTS) says it filed a notice of application on Tuesday with the Ontario Superior Court of Justice aimed at Metrolinx and Infrastructure Ontario. It alleges that Metrolinx, the provincial transit agency, has failed to retain an operator for the unfinished transit line.

Susan Sperling, spokesperson for CTS, said Metrolinx has an obligation to enter into a contract with the TTC as the intended operator of the Eglinton Crosstown LRT and bind the TTC to a contract that is "consistent" with the project agreement.

"At this late stage of the Eglinton Crosstown project, with construction more than 98% complete, and testing, training and commissioning underway, the TTC is able to make requests and provide input at any time, including at a late stage, that go beyond CTS's contractual responsibilities," Sperling said in the statement.

"Metrolinx has refused to manage or take ownership over these late changes requested by the TTC despite the undeniable continual impact on the Project schedule. This has resulted in delays to the Project outside our control and significant costs overruns which CTS has continued to incur."

Metrolinx CEO Phil Verster, for his part, said in a statement on Tuesday that the pending litigation is "another unacceptable delay tactic" by CTS, which has spent more than a decade constructing the problem-plagued mega project. Vertster also said Crosslinx intends to "stop working" with the TTC, which is set to operate the light rail line.

Verster accused Crosslinx of "looking for new ways to make financial claims" and said the consortium's behaviour "continues to be disappointing."

CTS, however, said it has not suspended or stopped work on the project, but is asking the court to find that consortium is not "obligated" to continue working on it while the issues between Metrolinx and the TTC are being resolved. 

"It is not tenable for CTS to continue working towards shifting standards, requirements and goalposts of Project completion," Sperling said in the statement.

This latest development comes after Verster said last month that the project is being delayed by more than 260 quality control issues and there is no credible timeline for its completion.

Those problems include track that was laid at road crossings in 2021 outside of Metrolinx's specifications — an error that is only now being fixed by Crosslinx, Verster said at the time.

Last month, Crosslinx committed to providing a revised scheduled for opening to Metrolinx by Thursday of this week, according to Verster. In an interview hours after he released his statement, Verster said he's not sure whether to expect that new schedule.

"This is all about money," he said of the pending lawsuit. "CTS must now focus on a credible schedule, stop the commercial wrangling, and deliver the project," he said.

The 25-stop, 19-kilometre line was first supposed to open in 2020, but that was delayed until 2021. Metrolinx and the consortium then settled on a fall 2022 opening, a deadline that again passed with much of the testing, commissioning and safety work still left undone.

Internal Metrolinx documents obtained by CBC Toronto last year show that the budget for the project has ballooned to nearly $13 billion, a figure that includes 30-year maintenance costs. Still, it is more than double initial estimates.

In the interview, Verster said the litigation will happen "in parallel" with ongoing construction and testing, and may not further delay the project. Nonetheless, he said, it is a distraction.

"We need to complete this project," he said, adding that he believes the earliest the line may open for service is next year.

This is not the first time Crosslinx has sued its partners in the Eglinton Crosstown project.

The consortium previously took Metrolinx to court in 2020, arguing that the COVID pandemic constituted an emergency that should require the two sides to renegotiate terms of their agreement, including costs and opening dates. A judge ultimately sided with Crosslinx, allowing the consortium to recoup some $134 million in unexpected costs.

Verster said Metrolinx will "defend this latest legal challenge" and that the transit agency is already "withholding significant payments for poor performance."

Despite the rocky relationship between the transit agency and Crosslinx, the consortium has delivered on other projects and is still best placed to finish the Eglinton Crosstown, he continued.

"We are doing everything possible — every commercial remedy, every financial remedy, every technical remedy — to get them to complete the project."

Toronto Deputy Mayor Jennifer McKelvie said in a statement that she is "extremely frustrated" with the circumstances and called on Premier Doug Ford to call a roundtable of stakeholders to "hammer out" a solution.

"We want to see this resolved in a boardroom not a courtroom. People need to come together, solve the problems plaguing this provincial project and get this very important transit line open," she said.

Eglinton LRT contract has 'given us pause': minister

Transportation Minister Caroline Mulroney said Crosslinx was supposed to provide Metrolinx with a credible schedule for completion this week, but instead told her they were going to court Tuesday to file their legal action.

Mulroney said the TTC has been at the table since the beginning.

"The TTC needs a system that's safe for its operators to test and that's what this is about," she said.

A TTC spokesperson said its relationship with Metrolinx for the new line will be defined through multiple agreements that cover different parts of operations.

"Discussions to finalize those agreements are ongoing, but there is no question the TTC will be operating the line upon opening," Stuart Green said.

"That decision was made years ago and now it's just a matter of ironing out final details."

Mulroney said the Eglinton LRT contract, signed more than a decade ago, has "given us pause."

"It was one big contract," she said. "If you look at what we've done on the Ontario Line, we've broken it up into smaller packages that are more manageable in terms of the risk the companies take on."