The tunnel for Ottawa's $2.1-billion light rail transit project will now go under Queen Street instead of Albert Street as part of modifications designed to keep the project under budget.

Ottawa Mayor Jim Watson said the move to Queen Street will allow the tunnel to be built at a depth of 15 to 16 metres instead of 39 to 40 metres. The LRT station at the Rideau Canal also rises from 38 metres to 29 metres.

The cost of the project also drops to $1.74 billion in 2009 dollars, or $2.1 billion in inflation adjusted dollars.

"The plan released today proposes a new alignment and a more practical tunnel that makes a lot more sense," said Watson. "The resulting product — the first phase of our light rail transit system — will be a significant improvement and it will be less costly than the previous plan."

Shallower station saves time

The shallower station construction will have a positive impact on future LRT passengers, allowing them to reach the platform in under a minute, rather than taking longer than two minutes to descend. There will also be cost savings of an estimated $400 million for the project, and less of a need for technologically complex equipment.

The 12.5-kilometre rail line is still slated to run from Tunney's Pasture, just west of downtown, to Blair station in the east, and includes a 3.2-kilometre transit tunnel under downtown Ottawa.

According to the updated timelines, the city will put a request for proposal on construction work by December of this year, and award a contract in December 2012. The project is slated to be completed at the end of 2017.

Keeping the project's costs down has been a challenge for the city, particularly with inflation and a rise in the price of steel. The downtown tunnel has already been shortened by a third with one station originally slated to go underground now scheduled to be at street level.

With files from the CBC's Giacomo Panico