This article was updated at 2:00 pm on October 2, 2020 to include remarks from Metrolinx CEO Phil Verster. Scroll down the end of the article to see the update.
In the Toronto Star, Ben Spurr reports that the opening date for the Crosstown line has been delayed five months to 2022, and even then it will open in stages.
Metrolinx, the provincial transit agency overseeing the project, conceded earlier this year that the $5.3-billion, 19-kilometre LRT across midtown won’t be finished by the previously announced deadline of September 2021. Metrolinx says it now expects the line to open sometime in 2022, but a firm date hasn’t been set.
But according to a new report, Crosslinx Transit Solutions, the private group contracted by the province to build the line, has floated a plan for a phased opening. It would see most of the LRT in service by Feb. 28, 2022, with the exception of Eglinton station, which wouldn’t be fully complete until September 2022.
Source: Toronto Star
Construction watchers might see this as a confirmation of what they see looking at slow progress at key sites, but there are more important issues at work here.
The news came not from Metrolinx itself, but from a notice from Moody’s Canada that it was downgrading its rating outlook for Crosslink Transit Solutions “to negative from stable owing to the likely delay in the completion of the Eglinton LRT Project”. The rating of CTS debt is not changed, only the outlook for potential updates.
At issue is the question of how much of this delay’s cost will fall to the P3 partner CTS and how much to Metrolinx and the Government of Ontario. To the degree that CTS must absorb this, their financial situation would be weakened.
An intriguing point in this announcement is that the value of affected debt is cited as $731.9-million (Canadian), a relatively small part of the total project cost. The entire P3 concept was sold on the basis that financial risk would be transferred from the Province to its partners.
According to the Star, CTS has claimed extra costs for a variety of delays such as unexpected conditions at Eglinton Station and labour constraints due to the pandemic. Metrolinx denies these claims, but if they eventually do pay out, it would not be the first time.
Various dates are cited by the Star for the line’s opening:
- February 28, 2022: The date for opening most of the line, except Eglinton Station, according to Moody’s report
- May 2022: Completion of most of Eglinton Station
- Fall 2022: Direct connection to the existing subway station opens
What is not clear is whether the February date includes provision for testing and acceptance of the nearly-completed line by Metrolinx.
Between May 2022 and opening of the subway link, passengers would have to transfer by walking on Eglinton between the existing subway entrance and a new entrance building to the LRT station.
For some time, the Metrolinx page for the Crosstown project cited an expected completion of 2021, but in March 2020 this was changed to 2022. This problem has been brewing for some time. Spurr reported the delay in February 2020 (see Eglinton Crosstown faces another setback, delayed until 2022).
The original target for substantial completion of the contract was September 2021, but there is an 18-month window to the “long stop date” when the agreement could be terminated. Now, only six months remain in that window. What exactly Metrolinx would face if they pulled the plug is unknown, but this would leave a nearly complete line tangled in legal problems.
The TTC and City of Toronto face ongoing costs for the service implications of the construction project, but this would be offset by a delay in the point where Metrolinx would begin billing the City for the line’s operation and maintenance (the TTC will only be directly responsible for part of this work).
“Metrolinx is focused on ensuring that (Crosslinx) fully meets its obligations to deliver a system as soon as possible — a system that is complete, fully tested and ready to provide high quality, safe and reliable service to our customers,” said Metrolinx CEO Phil Verster in a stern statement.
He said Crosslinx “has not achieved necessary production rates to achieve the original project schedule” and Metrolinx “will continue to hold (the consortium) accountable for these delays.”
Source: Toronto Star
Metrolinx may take a hard line attitude to non-performance by CTS, but more than bluster will be needed to achieve project completion. The expected June 2022 provincial election will bring considerable pressure to provide a ribbon cutting for Premier Ford at whatever cost is necessary.
Updated October 2, 2020 at 2:00 pm
Metrolinx has issued a statement from CEO Phil Verster through the Metrolinx Blog.
This includes the following comments:
Transit projects are delivered on-time when the contractor achieves the production rates they committed to and only through the proper management of their own logistics and operations. In the case of Eglinton Crosstown, our building partner, Crosslinx Transit Solutions (CTS), has not achieved necessary production rates to maintain the original project schedule that they committed to in their bid.
…
Any suggestion, like the one made in the Moody’s Credit Opinion, that the line could be considered ready to open without the ability for passengers to get on or off at the flagship station at Yonge and Eglinton, where tens of thousands of passengers will transfer on a daily basis between the Eglinton Crosstown and the TTC Line 1 Subway, is completely a distraction and is not in line with the obligations CTS took on when it signed the contract.
It is imperative that CTS now focuses on getting the project completed, including Eglinton Station, to the highest quality standards.
Source: Metrolinx Blog
It is clear from this statement that Metrolinx is taking a hard-line attitude to the current state of the project. Whether this will provoke improved performance by the CTS consortium, or create a logjam in negotiations remains to be seen.
This is among Metrolinx’ largest projects, and if the P3 is unable to deliver as promised, this will undermine the credibility of this method of project delivery. However, what could also happen is that industry’s appetite for such undertakings and especially for assumption of risk may be reduced threatening the bidding process for other projects including rapid transit lines and GO expansion.
Steve Munro 
Wonder how much of that ridership at the Eglinton Station comes in directly from the 32 or 34 buses? According to 2016 numbers, Eglinton Station had 75,050 compared with Cedarvale (Eglinton West) Station’s at 16,210. Having the buses detouring to Cedarvale Station instead of Mt. Pleasant, Eglinton, Avenue, Chaplin, and Forest Hill, maybe enough.
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There appears to be a silver lining to the Crosslinx proposal: Almost the entire line (minus Eglinton station) would open 2½ months earlier than the previous mid-May 2022 opening proposal. Although having 2½ months of shuttle buses between Avenue and Mt. Pleasant would be annoying in late winter. Not having an interior path between the line 1 and 5 portions at Eglinton station seems less inconvenient.
Steve: I do not know how familiar you are with the existing and planned Eglinton Stations, but sending all of the transfer passengers out onto the street would be a major problem simply because of the volume of pedestrian traffic and the capacity of various links (escalators, sidewalks, etc) along the way. There is more than one way to get from the subway platform to the new LRT platform, but it is not clear which path would be unavailable at “opening day”.
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Not that we might expect plans to adapt to the pandemic, but bypassing the Yonge connection might actually be a good thing, if the ridership was near the pre-pandemic levels. Because we have a significant overload of the system on Line 1, and was there good anticipation of how a batch of new rider inputs from Eglinton might actually overload the main spine further? Should we be passing through the Line 1 connection to the Spadina extension side?
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Most of the outside work should be finished by 2021. As with homes or offices, the inside work will take longer. Wiring, tiles, and finishing will stretch the work involved. Landscaping is usually the very last.
Steve: The point is that people can’t ride what’s not finished. And even after structural completion, there is a lot of system acceptance testing before it can carry passengers. That’s why it is vital to distinguish just what is meant by “completion”.
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How partial would the partial opening be?
While the major issue is Eglinton station, it appears there may be some minor issues at Mount Pleasant and Avenue stations as well. If this is the case, would the full E/W line be able to open for service?
Obviously, with the MSF out at the West end of the line, deployment of trains is possible, but how far to the east could they run? Is work sufficiently finished to be able to position trains to work the eastern end? And if you can run the full line (except Eglinton), will having active traffic on the line slow or delay the finish of construction? Would “night” trains be possible for maintenance?
Steve: There is so little reliable information, and Metrolinx treats the whole situation as (a) a state secret and (b) a case where they will simply bluster at the P3 to deliver on their contract rather than saying “what might we be able to do”. There is an interesting parallel with all of the problems getting the TYSSE finished and open, and the TTC took a lot of flak from an arrogant Metrolinx about how they could not deliver projects on time.
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If it wasn’t a P3, it would probably make sense to open the western leg of the Eglinton line as soon as possible, and then the eastern leg when Eglinton station becomes functional, but reopening the P3 contract to allow partial delivery seems like a Pandora’s box. Of course, being too strict will drive up costs on future P3 projects as well. There will also be political pressure to not have billions of dollars of usable subway tunnels and streetcar track just sitting idle and depreciating for a year for no reason except for esoteric financial contract language like what happened in Ottawa. Ottawa politicians did end up paying for being lenient with the P3 and not strictly enforcing the contract though.
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Public sector incompetence, time to privatise the TTC.
Steve: The last time I looked, Eglinton West was a Metrolinx project, not a TTC one. It did not go underground with a huge pricetag while the TTC was responsible, only when Metrolinx and Doug Ford decided that Eglinton could not possibly be home for “streetcars”.
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In a P3 arrangement, what happens if the private partner fails? Would they go the CCAA route? Do the various subcontractors have liens on the asset? Does the government (Metrolinx, I-O) retain the asset? Or do the businesses that financed the PP get first grab?
Steve: This is one of those great mysteries because Metrolinx does not reveal the terms of their P3 contracts, and especially not the provision for non-performance/bankruptcy. In all likelihood, Ontario would be on the hook for any outstanding costs and remediation because the P3 is probably a purpose-built consortium with no assets that could be seized.
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I thought the idea of P3 was greater cost certainty to taxpayer through risk transfer to the private sector? Apparently the valued private sector partner disagrees.
Steve: There was a lot of talk about risk transfer when P3s were introduced, but as the contracts are confidential, we do not know the terms. Crosslinx presumably feels they are on solid ground going after Metrolinx for conditions that are outside the bounds of the contract, while Metrolinx responds that Crosslinx was not performing up to snuff even before the pandemic. Unless this comes out in court documents, we will never know who is right, or if there is some fault/claim on both sides.
Another issue that comes up in contracts (and not just for P3s) is that there are times it is better to negotiate a settlement than to go into litigation which could stall the project. That happened on some of the TYSSE contracts that were a problem for the TTC.
There is another level of issue beyond just this contract. If the risk transfer Metrolinx expects the P3 to undertake proves too onerous, future bids will either be higher to provide a cushion or bidders simply will choose not to bid. This came up in discussions between the construction industry and Metrolinx a year ago. Nothing forces a company to undertake a tender if they think it will be too great a risk or too much hassle to deal with the buyer.
At the TTC, I remember discussions at Board meetings where questions were asked about the small number of bids for some work. It came out that the TTC was considered to be a difficult client and bidders either priced in a surcharge to allow for this, or simply chose not to bid. Metrolinx could find itself in the same situation especially as this relates to large international consortia who can afford to tell Doug Ford and his minions to get stuffed.
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Especially as the world is likely to see a lot of construction projects funded by stimulus money in the near future… I am curious how PCs would spin it.
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Delayed again because the TTC is so incompetent, the same thing happened with the Vaughan subway extension which too the TTC botched.
Steve: In case you were not watching, the Crosstown is a Metrolinx project. You cannot fob this one off on the TTC.
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