LRT construction bid pegged at $532M

Waterloo Regionstaff's recommended bidder for thecontract to design, finance, build, operate and maintain stage 1 of the region's ION light rail transit system says it can construct the system for $532.1 million, $13 million less than the region had originally budgeted for.

Staff said in a report released Friday afternoon they were confident that a consortium dubbedGrandlinq can build stage 1 of the system 19 kilometres of light rail connecting Conestoga Mall in Waterloo to FairviewPark Mall in Kitchener on time and on budget.

Grandlinqis a group comprised of several construction, financial services and engineering companies that includePlenary Group Canada,MeridiamInfrastructure Waterloo,Aecon, Aecom,Kiewit, Mass Electric Construction Canada,Keolis,STVCanada Construction andCIBCWorld Markets.

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The region had originally estimated that capital costs construction of stage 1 of the LRT component of the project at $545 million.

The Grandlinq proposal, however, is pegged at $532.1 million.That doesn't include costs like light rail vehicles andland appropriations. it also excludes $61 million in public works and infrastructure costs that were included in the Grandlinqproposal but are other projects that needed work regardless of whether the LRT system was going to be constructed or not.

Region spared much of the risk, says councillor

RegionalCoun. Tom Galloway said he is happy the bid is in line withthe total $818-million capital budget for the rapid transit system.

Galloway said the region is largely insulated fromcost overruns because of the waythe contract was structured, adding amajor portion of therisk is borne by the consortium.

"It's their problem. If it costs more to build it, they'll have to eat it," he said.

"The only things they could come back on us for is if we change things or during construction there's a pipe in the ground that nobodyforecastedwas there and they didn't know about it."

The $532.1 million figure also doesn't includethe proposed adapted bus rapid transit system connecting Kitchener to Cambridge or stage 2 of the project, in which the BRT will eventually be converted to light rail.

Under the terms of the bid, the annual operating costs, including financing, maintenance, operation, insurance and life cycle costs come to $30 million. Over the 30-year duration of the contract, that comes to $901.5 million.

"It's a very sophisticated approach that delivers cost certainty and excellent value for the taxpayers. So I'm quite pleased with the consortium and the approach we've taken on this project," said regionalCoun. Sean Strickland.

Average homeowner pays$11 more annually for 7 years

When council originally approveda strategy in 2011 to pay for theLRTsystem, it approved a 1.2 per cent property tax increase each year from 2012-2018.

However, the region was able to whittle that tax increase down to 0.7 per cent annually thanks to savings realized from what the report calls "other savings," including uploading of Ontario Works costs and retirement of debt at some regional buildings.

For the average home in Waterloo region, a 0.7 per cent tax increase amounts to an extra $11 annually.

Grandlinq was one of three bidders shortlisted for the contract. The other bidders were:

• Kitchener Waterloo Cambridge Transit Partners, which includesGracorp Capital Advisors,Connor, Clark & Lunn GVest Traditional,Infrastructure Partnership,Parsons,Graham Infrastructure,IBI Group, E & E Seegmiller,Guild Electric,Alternate Concepts and Investec North America.
• Tricity Transit System, which includedSNC Lavalin; EllisDon Capital,Fengate Capital ManagementURS Canadian Operations,and Hatch Mott MacDonald.

The planning and works committee will discuss the report on Tuesday. Council will make a final decision on March 19th.