The Canadian News

Ontario Line costs nearly double after awarding of latest contracts

By Lex Harvey Transportation Reporter

Soaring inflation and supply issues alone can’t explain why the cost of the Ontario Line has nearly doubled from the provincial government’s initial estimate, according to one long-time transit expert.

“I have a suspicion they goofed,” Steve Munro said Wednesday, after recent contracts showed the planned 15-kilometre subway will cost almost twice as much as originally promised. “There’s no way they could have done it for that money.”

Two new contracts awarded in November by Infrastructure Ontario and Metrolinx, the provincial transit agency overseeing the project, plus two more underway, brought the cost for the much-anticipated subway line to between $17 billion and $19 billion — a significant leap from the $10.9-billion price tag the government publicized in 2019.

That puts the per-kilometre cost of the new subway at upwards of $1 billion — which Munro called an “outrageous price.”

The Tories blamed the higher-than-expected estimate on “rising inflation costs” and “supply chain shortages,” which are affecting construction projects worldwide.

“As this project moves forward, we will ensure that taxpayers get the best value for their money possible while continuing to deliver on much needed transit,” Ministry of Transportation spokesperson Dakota Brasier said in a statement.

But Munro said inflation can’t explain such vast underestimates.

“Seven billion on a base of 2 billion is not inflation,” he said, referring to the contract pegged at “greater than 2 billion” that ultimately went for $9 billion.

Construction on the Ontario Line, which will stretch from Ontario Place to the Science Centre, began in March but the line isn’t expected to be complete until 2031, four years later than planned.

On Nov. 17, Infrastructure Ontario and Metrolinx announced they had given Connect 6ix, a collection of private companies, the main ticket to operate and maintain the line’s trains and systems in return for $9 billion.

The province’s May update put the cost of this contract at “greater than $2 billion.”

On Tuesday, Ontario’s opposition New Democrats called for “increased accountability and oversight” over the Ontario Line, which is the showpiece of Premier Doug Ford’s transit plan.

“The Minister of Transportation needs to explain to Ontarians why these projects are already falling behind and why subway costs have more than doubled under the Ford government,” said NDP infrastructure critic and Oshawa MP Jennifer French.

The NDP cited the province’s public-private (P3) model for delivering infrastructure projects as the reason for the cost increase.

“We are calling on this government to increase accountability and oversight over Metrolinx and Infrastructure Ontario, so transit riders won’t suffer high transit fares and poorer service while P3 financiers and private consultants get rich,” said Toronto Centre NDP MPP and former city councillor Kristyn Wong-Tam

According to Infrastructure Ontario, the model “transfers appropriate risks associated with design, construction, financing, operations and maintenance of the project to the private sector.”

While there are overhead costs associated with hiring private companies to manage public projects under the P3 model, these were likely factored into initial costs, Munro said.

Earlier in the month, Ontario Transit Group won the contract to design, build and finance the line’s south stations and tunnels, for $6 billion. The contract had previously been valued at “greater than $4 billion.”

Two further contracts in the works to design, build and finance the north part of the line are expected to cost between $1 billion and $2 billion each.

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