The decision to cancel the Hamilton LRT project could cost the Ontario government $1.5 million in stipend fees to bidding consortia.

Transportation Minister Caroline Mulroney made the announcement to scrap the long-anticipated project on December 16. She cited cost overruns as the reason behind the decision.

When the project was approved in 2014, the provincial Liberal government committed $1 billion. The Conservatives confirmed their commitment to funding the project during the 2018 election, but Mulroney said at her announcement that the project price tag is now approaching $5.5 billion.

Cancelling the project has not come without cost. For example, Metrolinx, the Crown agency that manages public transit in the Greater Toronto and Hamilton area, had already acquired two thirds of the commercial and residential properties it needed to make room for the line. By the end of September, the agency had spent more than $160 million on the project, including $80 million on property acquisition.

Additionally, the three consortia that were bidding on the project were forced to abandon their work. Infrastructure Ontario indicated that it has notified the project teams and, as per the Break Fee policy described in the project’s request for proposals, the teams could receive a stipend of $500,000 each.

The consortia include CityLine Transit Group (which include constructors Dragados, Aecon and Dufferin), Ei8ht Transit (including Fluor Canada, EllisDon Civil and Bombardier), and Mobilinx (with constructors Astaldi, Hitachi-Ansaldo, Amico and Bot). IO and Metrolinx plan to meet with the teams to discuss next steps.

Meanwhile, the province has said it will work with the City of Hamilton to determine alternative opportunities to deliver on its $1 billion funding commitment to ensure the City gets the transportation infrastructure that it needs.