Special Report: Light Rail

$137 Million Spent or Committed to Hamilton LRT Project: Metrolinx

Metrolinx has spent or committed $137 million on the Hamilton LRT, with $105 million spent and $45 million spent on property acquisitions.

By Ryan McGreal
Published September 12, 2018

Metrolinx, the Provincial rapid transit agency overseeing Hamilton's light rail transit (LRT) project, has released updated numbers on money spent and committed to the project to date.

According to an email response from Jessica Scott, Community Relations and Issues Specialist at Metrolinx, the agency has spent or committed $137 million between 2007 (yes, this project has been under development for 11 years now) and the end of July.

That total includes $105 million already spent on the project, plus another $32 million in committed funds for engineering and design work, procurement tendering, project oversight, leased space and other associated costs.

Of the $105 million already spent, $45 million is for property acquisitions along the LRT route that are necessary to build the line and stations. The rest has been for the original Environmental Assessment completed in 2011, the Environmental Project Report Addendum completed in 2017, and staff costs for this project over the past decade.

The property acquisitions were put on hold in late August as part of a temporary freeze in discretionary spending imposed by the Ontario Government, but other work has been ongoing.

If the LRT project were to be cancelled, as some local candidates in the municipal election have proposed, the $60 million already spent on non-property acquisitions would be lost and unrecoverable. In addition, most of the $32 million in committed money would still have to be paid to fulfil contracts.

During the Mayoral debate on Cable 14, incumbent Mayoral candidate Fred Eisenberger claimed the Province has spend $120 million on property acquisitions.

In an email response to RTH, Eisenberger stated, "In the heat of the moment I am told I said $120 million spent on properties. That is incorrect and I intended to say $120 million spent or committed to this project. That is what was in my mind but it did not come out that way."

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.

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By mdrejhon (registered) - website | Posted September 12, 2018 at 18:32:03

The distinction between "spent" (already spent) and "committed" (contracts that must be later paid) is sometimes lost by some detractors.

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By CharlesBall (registered) | Posted September 13, 2018 at 09:46:34

Sell the property acquired and you get $45 million back.

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By CharlesBall (registered) | Posted September 13, 2018 at 09:51:49

Does anyone remember when the City committed to building a new city hall then cancelled the project and lost tens of millions of dollars immediately (40 mil rings a bell) and probably much more since then as the City located offices throughout the downtown? This was done to preserve "heritage." We don't seem to be adverse to wasting tens of millions of dollars when the mood suits us. And blowing 60 million to save a billion might make sense.

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By kevinlove (registered) | Posted September 13, 2018 at 10:26:25

Also important to bear in mind is to compare this to the costs of our current car-dominated transportation system. We see from the City's Vision Zero web page that motor vehicle operators:

  • Crush and kill an average of 16 people each year in Hamilton.
  • Crush and injure and average of 1,824 people each year in Hamilton.
  • The average cost of motor vehicle crashes is $608 million each year in Hamilton.

In addition to this, motor vehicle operators poison and kill an average of 94 people per year in Hamilton for a cost of approximately $505 million. And not just in Hamilton! In the GTHA as a whole, motor vehicle operators poison and kill at least 712 people per year for a whopping financial cost of $4.6 billion!

But going back to Hamilton, we see that the deaths and injuries caused by motor vehicle operators killing and injuring people, as well as property damage in motor vehicle crashes comes to an average of $1,013,000,000. Yes, that is the right number of zeros. Over a billion dollars each and every year.

In other words, the cost of building the entire LRT is about equal to the financial cost of deaths, injuries and property damage caused by motor vehicle operators each and every year.

Wow!

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By Haveacow (registered) | Posted September 13, 2018 at 12:26:32

There is a kind of financial damage that is generally not known to the public. Its damage to your collective reputations and it has a big financial penalty!

Back in 2006, Ottawa cancelled a signed contract for the project known then as the "North-South LRT Project". The partners included 2 of the country's biggest construction and engineering firms and one of the largest companies on earth, Siemens. The project was cancelled after the municipal election of 2006 and by a mostly freshman council as well as an absolutely green, politically conservative mayor. The mayor was a fairly well known, local high tech businessman, who was sure that he could get a better project and deal, he was wrong! Later we found out just how wrong he was $42 million + expenses wrong (believed to be somewhere officially around $62 million but it varies from source to source)!

For years after, when any planning, engineering and construction firm won contracts with the city of Ottawa, they overcharged and made sure as much of their contracts as possible had to be paid up front. This was because they didn't believe the Ottawa Council would stick to any signed agreement and would change their minds if the political winds needed them to. Overcharging or "padding" their costs as well as making sure contracts demanded as much as they could legally get either up front or as soon as possible was security against an unreliable civic partner. It still goes on today, however the city has gotten much more legally clever and has somewhat cleaned up its act, when acting as a partner in signed contracts. As a consultant I can speak from experience, the city can still be somewhat "tardy" about paying smaller contractors quickly.

This has occurred without the majority of the public being even remotely aware of it. I fear this could happen to Hamilton if the new council decides to go the other way on the B-Line LRT Project file.

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By Ryan (registered) - website | Posted September 13, 2018 at 16:16:02 in reply to Comment 123721

For years after, when any planning, engineering and construction firm won contracts with the city of Ottawa, they overcharged and made sure as much of their contracts as possible had to be paid up front. This was because they didn't believe the Ottawa Council would stick to any signed agreement and would change their minds if the political winds needed them to.

This needs to be printed on a giant billboard and installed on the City Hall forecourt.

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By ScreamingViking (registered) | Posted September 13, 2018 at 22:35:18 in reply to Comment 123719

At the cost of losing an increase in service capacity along the city's main (and service challenged!) transit corridor. SMRT.

Comment edited by ScreamingViking on 2018-09-13 22:36:50

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By KevinLove (registered) | Posted September 15, 2018 at 00:14:15 in reply to Comment 123722

It would also not surprise me if those firm's bids included substantial penalty clauses for the City subsequently cancelling the contract.

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By RobertMackenzie (registered) | Posted September 15, 2018 at 14:54:35 in reply to Comment 123718

Except, of course, the property would no longer be worth $45 million, because property values will have declined. Why? Because there's no longer an LRT!

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By positive1@cogeco.ca (registered) | Posted September 16, 2018 at 18:36:32 in reply to Comment 123719

Charles Ball -I consider the $60 Million an investment in our city and future. I'm sorry you don't see it that way. You are not being fiscally responsible when you cavalierly speak of 'blowing' $60 million. In fact, if you re-read the article, you would be squandering closer to $ 100 million ($60 million in non-property acquisitions plus most of $32 million in committed money to fulfil contracts). Doug Ford has spoken many times about respecting taxpayers money, so cancelling this project would be a huge waste of money and a bigger waste of an opportunity to really give the city the kind of higher order transit that most other progressive cities already have or are in the planning stages of building. What's the point of constantly second-guessing ourselves? It seems to be a popular past-time with some city officials who can't seem to stick to decisions they have made many times before. It was a good idea when they voted in favour of LRT many times. Why can't they defend their stand in stead of constantly vacillating? Why not consider it an investment, build the damned LRT and stop being a nervous-nellie. Many other cities have done it and almost every city that started with a modest system (like Hamilton's) has chosen to expand it after seeing how successful it is. As far as your comparison to preserving the old city hall, you are way off topic.
We are talking a transit system. Anyway, I support the preservation of our built heritage. We have lost too many great buildings to the wrecker's ball in the past. Go look at the rather bland and boring office building at the corner of King St. S and James and tell me it is more attractive than the classic Birk's Building that stood proudly since 1883 and was levelled in 1973. (RTH article - https://raisethehammer.org/article/60/th...

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By funnyjokes (registered) - website | Posted September 22, 2018 at 01:31:21

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