Montreal's auditor general says the city missed several crucial steps in the creation and management of the Bixi bike-sharing program.
In a report released Monday, Auditor General Jacques Bergeron said the city didn't properly study the program's feasibility before its launch. He also said the city it has no authority to market and export the concept, and the Bixi service will cost taxpayers millions for years to come.
Bergeron wrote in his report that basic elements of management were neglected, including risk and cost-benefit analyses, and allowance for a financial margin of error.
In May, city council approved a $108-million bailout package for the program, including $37-million to cover Bixi's deficit, and another $71-million in loan guarantees to export and develop the system abroad.
Exporting the concept is a major source of income for the program.
But Bergeron's report pointed out that under the city's charter, it has no legal right to be involved in a commercial enterprise.
'Comedy of errors': opposition
In response, both the administration and Bixi's CEO admitted Monday that the project was rushed from the beginning, and that many steps were improvised and continuously re-invented as the project developed.
But Bixi CEO Roger Plamondon said he maintains that the city will be fully repaid for its loans, and that steps are being taken to remedy any legal conflicts. He said among the options they are considering is selling off Bixi's export division to private entrepreneurs.
Opposition leaders at City Hall pounced on the report Monday afternoon.
Vision Montréal leader Louise Harel called it a "comedy of errors," and said her party was misled by the city when the bailout was voted on in May.
Bixi was first set up in Montreal in 2009. In 2010, startup costs had it running at a deficit of more than $30 million.