The Toronto York Spadina Subway Extension (TYSSE) to Vaughan has been much in the news lately thanks to its delayed opening and cost overruns. The line was originally expected to open in 2015, even in early rosy estimates before the Pan Am Games, but now will not be in service until 2017. The project was repeatedly cited (as recently as December 2014’s CEO Report) to be on its budget of approximately $2.6-billion. The exact final cost is not known but has been reported to be up to $400-million more.

To date, the TYSSE project is on budget with a total budget of $2,634 Million. The in-service date is targeted for the fall of 2016 however the project is facing a serious schedule challenge. [CEO’s Report for November-December 2014, p. 29]

The “on budget” statement, which had appeared in all previous CEO reports, vanished with the January 2015 report.

A peer review was conducted by an APTA panel in late 2014 largely to assess schedule and budget challenges. A report is expected at the end of January related to schedule and budget challenges and will make recommendations to mitigate these challenges.

Bechtel Ltd., a consulting firm, was also retained at the CEO’s specific direction to conduct a thorough in depth analysis of the project and likewise is expected to present its findings at the end of January. [CEO’s Report for January 2015, p. 30]

The results of these reviews are to be tabled at the March 26, 2015 TTC Board meeting.

There are two issues in play here. First and most obvious is the question of how a major project can suddenly be found to have budget problems, and why these were not discovered and reported sooner. How much oversight did the TTC Board actually have beyond the one-line monthly assurance that the project was “on budget”? Second is the more general question of the tracking of major projects, and why this is not regularly reported to the Board and through them to City Council and other funding governments.

To learn as much as I could from publicly available sources, I culled through TTC meeting reports going back to the early days of design work on the TYSSE. Tracking a project’s history this way can be challenging for various reasons:

• Some agendas exist only as a PDF file without links to the underlying reports.
• TTC procurement policy allows contracts of up to $5-million to be approved by management without a report to the TTC Board. (This is in line with the City of Toronto’s policy.)
• A monthly report listing all expenditures authorized by management in the $1-5m range was discontinued in March 2012.
• Changes in the total authorized spending on a line item only appear in public when there is an update involving a large contract change.
• The CEO’s report tracks variations in capital spending, but this is only against the expected amount for the current year, not for a project overall. Because of various delays, the TYSSE tended to underspend versus plans even though the estimated total cost to completion might actually be rising.

Continue reading →