Updated April 13, 2015:
The TTC has issued a press release regarding the management of the Spadina subway extension project:
The Toronto Transit Commission has entered into an agreement with Bechtel Canada Co. for project management of the Toronto-York Spadina Subway Extension (TYSSE) for up to $80 million.
The contract value to Bechtel is based on staffing costs, management fees and incentives to open the subway extension by Dec. 31, 2017. Bechtel staff begin work today and will form an integrated team with existing TTC personnel. The Bechtel contract will expire March 31, 2018. Bechtel’s project director will report directly to TTC CEO Andy Byford.
On March 26, the TTC board approved a report from staff that recommended TTC enter into a sole source agreement with a project manager with a proven track record of delivering similar-sized projects on time, and with experience working with multiple contractors, in order to have the TYSSE in service by Dec. 31, 2017.
Toronto City Council subsequently authorized the expenditure of $90 million, while the Regional Municipality of York authorized the expenditure of $60 million, for a total of $150 million (third party contractor, plus in-house project costs), to fully deliver TYSSE by the end of 2017.
The release is silent on the issue of what might be done with the remaining $70m of Toronto/York’s $160m authorization.
Original article of March 29, 2015:
In a previous article, I reviewed information from a media briefing by Andy Byford on the status of the Toronto York Spadina Subway Extension (TYSSE) project. At the TTC Board meeting on March 26, 2015, further information was made public both in Byford’s presentation, and in additional material appended to his report.
Updated March 30, 2015 at 1:30 pm: The slides from Byford’s presentation are now available starting at page 58 of the linked pdf.
Updated March 30, 2015 at 11:30 pm: A new report from the Toronto City Manager to Council advises that the interest earnings on the “Move Ontario Trust” (the repository for provincial contributions to the TYSSE project) have not achieved the target rate of 4% resulting in an $85m shortfall. Oliver Moore reports in the Globe that Ontario has refused to make up this amount as per the original agreement between the funding partners. Toronto and York Region are on the hook for this additional cost estimated at $51m for Toronto and $34m for York Region. This expense is over and above the cost overruns on various contracts, but at least Council cannot blame the TTC because the trust fund is not under TTC control.
Appendix F (beginning at page 33 of the linked PDF), is a presentation given to the Executive Task Force who oversee the project on behalf of the sponsoring governments on July 28, 2014. The presentation was given by Parsons Brinkerhoff who had been retained by the TTC to review the project.
Appendix G (beginning at page 56) is a two-page summary of Bechtel’s work reviewing PB’s original study and a subsequent APTA (American Public Transit Association) peer review. APTA concluded that an earlier completion date would be possible than PB had projected, but only with major changes to the project management structure. Bechtel concurred in these findings.
It is abundantly clear from this material that the TYSSE’s problems were known at the top level of the project in mid-2014 at the latest. At the time, their severity was so great that the project would still be incomplete by the time of the next municipal and provincial election cycles, and that considerable additional cost could be facing the funding partners. This very serious issue did not arise in public discussion until six months later, notably after Toronto’s 2015 budget cycle was complete.
Also included as Appendix E (beginning at page 19) is an October 24, 2012 TTC Board report advising of delays to the TYSSE project and adjusting the opening date to “fall 2016”. The report includes a detailed chronology of the project beginning in December 2005.
As of October 2012, construction work had been underway for barely two years with contract award dates ranging from November 2010 to July 2012. Construction work at York University Station was scheduled to begin in January 2013. It is important to note that the work fatality at the site occurred in October 2011 during the first phase of construction. This was part of the Northern Tunnels contract that would eventually leave a hole into which the station would be built under a separate contract. This is the same hole that filled with water (“Lake York” as described in the National Post) because of miscommunication about the responsibility for pumping out groundwater between the tunnelling and station contractors.
Problems with all of the construction sites were apparent in 2012, and the risk analysis concluded:
By early 2012 a review of the schedule impacts as noted strongly suggested that completing the project by December 2015 was unlikely. A number of workarounds, alternate work methods and acceleration achieved limited schedule recovery but were not sufficient to maintain the original schedule.
In mid-2012 schedule risk assessments were facilitated by independent transit scheduling experts. The conclusion was that maintaining the original schedule was no longer viable even by extensive acceleration measures and corresponding additional expenditures.
The risk analysis has been followed up by intensive schedule recovery workshops held on a weekly basis. These workshops explored potential initiatives to recover schedule that allow TYSSE staff to initiate action to achieve schedule recovery.
Many initiatives have been adopted and others are in discussion with the contractors. Some, such as major acceleration have some risk of failure and will require the outlay of significant funds as contract changes beyond the contracted amount and will require extensive analysis, scrutiny and successful negotiations with contractors. Efforts in this regard are ongoing, but the level of success in negotiating major accelerations with contractors is unknown at this time.
Initiatives coming from schedule analysis, observed performance and better contractual situations and risk analysis are expected to achieve some schedule improvements.
The potential for contract slippage and for “significant” additional expenditure are quite clear. However, at this point the assumption was that the project could still be completed within its original budget.
Pages 30-32 show the evolution of the project schedule from an original view in 2006 to a then-current view in 2012, and even that proved optimistic. Note that by 2012, the effect of the delay from the York University fatality should already have been incorporated in the schedule.
What is missing is an updated chart showing newly projected dates for the project components or a discussion of the factors since October 2012 that would lead to even further delay.
By July 2014, the transition from tunnel building to stations was well underway, but the PB report notes that five of six sites were “behind the spending curve”, i.e. the contractors were not building at the expected rate. Without stations, installation of many systems cannot occur including track and power, not to mention equipment and finishes in the stations themself. Delays to contracts for such work would lead to claims and the whole process of managing the project would be extended. The most telling goal of the PB review is to “Define the magnitude” of the station construction problem. This suggests that the TTC’s project managers did not actually know the status of their own project.
A detailed review took place with a series of meetings in June and July 2014 leading to a conclusion that a May 2018 opening would be possible subject to various caveats notably that the then-current rate of progress by contractors continued and that no contractor would go into receivership or abandon their work.
The new schedule was subject to formal risk analysis to examine the linkages between contracts and activities, the risk of various events, and the combined effect on a likely opening date for the line. This revealed that at May 2018, there was a very high risk (see chart, page 47) that many of the potential delays would occur, and that far too much faith would be required in ideal circumstances to actually hit that date. The project would not get “over the hump” of the risk chart until late 2018, with mid-2019 as a worst case scenario. Of particular note were the late completion of the trainways at Steeles West (now Pioneer Village) and York University Stations that would slow down many dependent contracts. This was not a question of fixing many small problems (although there were plenty), but of addressing two very big ones.
Three schemes for interim operation of an incomplete line were considered:
- Service to Vaughan bypassing Steeles West Station. This option would bring the opening date to November 2018, but would be subject to added cost of $17-25m, and could be subject to safety concerns (operating through a construction site, emergency exit provisions).
- Degraded service from Finch West to York University. This option would see an April 2018 opening, but only one in three trains would run through to York U via single track, two-way operation north of Finch West Station, the nearest crossover location. The added cost would be $28-40m, and this option too had safety concerns.
- Service to York University with a turnback at Steeles West. This option too would yield an April 2018 opening date with Steeles West being the turnback location for revenue service as far as York U. The added cost would be comparable to option 2, but with more technical and safety concerns.
All three of these depended on completion of the two much-delayed stations at least to a point where some train operation was possible.
The PB recommendations include detailed review of the options and implementation of very close monitoring and planning to track the project against any revised targets.
The Bechtel review (building on the APTA review) includes recommendations for strengthened project management and improved relationships between the TTC and its contractors. That so much is needed to bring the project back on track only hints at the underlying scope and details of problems, some of which were alluded to by Andy Byford in his verbal presentation at the Board meeting. Project management may have existed on paper, but the widespread lack of co-ordination shows that this was more show than substance.
The essential difference in the approach recommended by APTA and Bechtel requires a new project management structure and improved relationships with contractors. Although some of their claims for extra costs may be challenged, some have legitimacy and at least partial payment should add to good will between the parties. Whether it will result in better completion rates and quality is quite another matter.
At the end of a long discussion, much of which was held in camera, and with a section from which even most management were excluded, the Board decided to accept Byford’s recommendation that a project management consultant be retained to take over control of the project. Two Board members objected to the sole sourcing of this work (almost certainly to Bechtel because of their previous involvement, although this detail was withheld from the public discussion), but in the end the proposal passed.
From here forward, we can only hope that a detailed project plan and tracking will be published at every TTC Board meeting so that, if there are problems, the issues get a public airing early in the process rather than hiding conveniently out of sight.