Raise the Hammer
With no advance notice, the Ontario Government abruptly canceled Hamilton's light rail transit (LRT) project yesterday, citing absurdly over-inflated budget overruns.
By Ryan McGreal
Published December 17, 2019
With no advance notice, the Ontario Government abruptly canceled Hamilton's light rail transit (LRT) project yesterday, citing absurdly over-inflated budget overruns.
Ontario Tranportation Minister Caroline Mulroney was supposed to make a surprise announcement at 2:30 PM at the Sheraton Hotel in downtown Hamilton. But when a large group of residents inclding Mayor Fred Eisenberger and several City Councillors showed up, Mulroney canceled the press conference, hiding from the public and leaving Mayor Eisenberger to deliver the news, which he had just learned himself.
Mulroney ended up issuing a written statement later that afternoon, claiming the "the project will actually cost five times more than the previous government led us all to believe."
The Ontario Government is claiming that the original capital cost, estimated at $1 billion in 2014 when the project approval was announced by the previous Liberal Government, has ballooned to an astonishing $5.55 billion.
This number is impossible to take seriously. According to the Government's breakdown, the construction, vehicle procurement and financing will cost $2.85 billion and other capital costs (like property acquisitions, pre-procurement works and services) will cost $766 million.
That's $3.62 billion by itself, an outrageously high estimate for 14 km of surface LRT construction. But the Government's numbers also incude 30 years of gross operating costs, estimating total provincial lifecycle operating costs of $984 million, plus municipal operating costs of $950 million.
That, in turn, amounts to $64.46 million a year in operating costs, which is just ridiculous.
It is not at all clear how the government arrived at these capital cost estimates, since the governmnent claims they came out of an internal audit. The Request for Proposals (RFP) process was still underway, in which three qualified consortia were developing bids to win the contract to build and operate the system. Those bids were not expected until March 2020, so we really have no idea how much the actual capital cost would be.
It seems ridiculous to cancel the project outright after twelve years of development, just three months before we were about to receive the final construction bids.
Unsurprisingly, the Province is blaming the previous Liberal Government, accusing them of hiding the capital cost inflation. On AM640 radio yesterday, Premier Doug Ford claimed the Liberal Government knew "darn well" that their cost estimate was low.
Again, this strains credulity to the breaking point. Waterloo Region just completed an 18 km surface LRT system for under $1 billion, which is very much in keeping with the cost estimate for Hamilton. Of course, the announcement for Hamilton was in 2014 dollars, so we should expect some modest increase in the capital cost due to five years of inflation.
It's not clear why the Ontario Government suddenly changed course on this transformative project. Their claim about insane budget overruns is obviously unserious, so there must be some other reason they decided to cancel the plan, especially after Premier Ford reiterated his commitment to Hamilton LRT when Mayor Eisenberger decisively won last year's municipal election on a pro-LRT platform.
Although, given this government's priorities and actions since taking office, perhaps a better question is to wonder why they claimed to support the Hamilton LRT project at all.
After literally 12 years of active development, several municipal and provincial elections and endless political ups and downs, it's hard to believe this project would end so suddenly and unexpectedly so very soon before it was finally going to be implemented.
After the past year in Hamilton - the buried Red Hill surface report, the Pride attack, the rise of Yellow Vest extremism in the City Hall forecourt, the hidden leak of 24 billion litres of raw sewage into Chedoke Creek - I can't think of a more 2019 way for 2019 to draw to a close.
Editor's Note: Hamilton Light Rail has launched a new campaign calling on Hamiltonians to send Premier Ford a message calling in him to fix Minister Mulroney's mistake and get the Hamilton LRT back on track. Please join the call to action and make your voice heard.
By Haveacow (registered) | Posted December 17, 2019 at 09:24:43
You notice the Conservative Provincial Government has never added in the 30 year total of operating cost for a highway project or any other rapid transit project before, just Hamilton's B-Line LRT project. Local Hamilton area Conservatives have been looking for a reason to cancel this project for years and the province furnishes the reason for them. Enjoy your new Bus Rapid Transit Network, maybe. Now that local Conservatives got rid of LRT, watch their support and desire for a BRT system faid away too.
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