City withholding millions from LRT builder
Rideau Transit Group, city in 'ongoing dispute' over payment deductions
OC Transpo boss John Manconi says the city continues to withhold millions of dollars from Rideau Transit Group (RTG) over ongoing problems with Ottawa's new light rail system.
In a memo to the mayor, councillors and transit commissioners Wednesday, Manconi said the city has paid out approximately one-quarter of the amount RTG has billed in recent months.
Between October 2019 and July 2020, RTG sought approximately $60 million from the city, but Manconi said for now, the city will only be cutting a cheque for $17.45 million.
As reported by CBC, the contract with RTG allows the city to deduct payments for poor performance.
Manconi said the city is prepared to make partial payments for the period covering October 2019 to January 2020, as well as May to July 2020. But payments for February to April 2020 period are on hold, since possible deductions have not yet been determined.
Those months saw "reductions in the availability of vehicles as a results of technical issues with wheel flats and arching issues," Manconi wrote.
'Ongoing dispute' over deductions
The city will only pay out $5.47 million for the October to January period, even though RTG invoiced $17.68 million.
"RTG and the city have been engaged in an ongoing dispute and discussion as to how work orders have been administered to date, and how they should be administered on a go-forward basis," Manconi wrote.
He said some progress had been made between the two parties in relation to certain "ambiguities" with the project agreements, and discussions are ongoing.
There were some improvements made to the system between May and July because of reduced ridership during the pandemic. The city will pay out $11.97 million for those months, withholding only $683,000.
Cracked wheels sidelined trains
An additional $16 million is being withheld because the promised complement of 15 trains still isn't reliably available during peak periods.
"Although RTG has recently been successful in running 15 double car trains, it cannot do so consistently due to the wheel cracking issue, which requires ongoing safety inspections," Manconi wrote.
Last month, CBC reported Canada's rail safety agency launched an investigation after cracks were discovered in the wheels of several trains.
RTG has told the city 15 trains will be available during peak periods as of Sept. 8. If that happens, and the wheel crack issue has been resolved, the city could pay out an additional $16 million.