Was Hamilton’s LRT project doomed to failure even before it was cancelled in December?

The CBC reported on January 6 that it had obtained a report between Metrolinx and Infrastructure Ontario that showed two of the three shortlisted project consortia had reservations about the build. The document shows that bidders Ei8ht Transit and CityLine Transit were not “actively engaging” in the RFP process over concerns that the project would not receive the funding it needed.

Transportation Minister Caroline Mulroney announced the cancellation of the Hamilton LRT project on December 16. At the time, she cited massive cost overruns as the reason for the decision. The figure she quoted then was in excess of $5.5 billion, where the previous government had indicated the construction cost would be $1 billion.

The report obtained by CBC sheds more light on the project cost issue. It shows that the Liberal government approved a budget of more than $3.6 billion for the project—including costs for construction and lifecycle operations and maintenance. The updated figures in the Metrolinx report suggest the budget number was in excess of $3.7 billion—with $1 billion allocated to construction costs.

In an email interview with the CBC, a Ministry of Transportation spokesperson suggested the cost issue was proof positive of the government’s decision to cancel the project. The government has since committed to spend $1 billion to review other transportation options in Hamilton. It will soon strike a task force—composed of four provincial officials and one city official—to conduct this work.

In addition to concerns over project financing, the report shows that two of the three bidders had indicated to Metrolinx that they would be unable to provide trains for the LRT, and wanted Metrolinx to reconsider its "revenue vehicle delivery risk allocation in the current project agreement."

This discussion led to Metrolinx including a break fee in its RFP document.

Meanwhile, Ontario auditor general Bonnie Lysyk, whose department was already conducting a value for money audit into Metrolinx’s operations and governance, indicated in a letter to Ontario NDP leader and Hamilton Centre MPP Andrea Horwath that her office will look into the province’s estimates of the LRT project.

As the auditor general’s office conducts its work, the investment arm of the Laborers’ International Union of North America (LiUNA) indicated it would also review the province’s project cost numbers. It said in a December statement that the province’s figures were inflated, but did not release its analysis of the project costs.

About 5,000 LiUNA workers were expected to work on the Hamilton LRT project.