City, RTG settle their light rail contract dispute

The City of Ottawa and Rideau Transit Group (RTG) have reached an out-of-court settlement over the contract to maintain the capital's light rail transit system, which includes a plan to fix problems for the long term.

Details on its terms are few, but a joint statement issued Friday says the agreement "resolves several disputes between them and resets their relationship." That's something Justice William Hourigan had urged after releasing the LRT Public Inquiry's final report.

"I think it's the best deal for our customers and working collaboratively with RTG will help us to deliver better service to our customers — this is my first goal," said Renée Amilcar, the city's head of transit services.

According to the statement, Rideau Transit Group now acknowledges it was in default on its contract after a pair of derailments in August and September 2021 — something it had previously disputed.

The consortium also has a "rigorous plan to address the issues that led to the derailments" and is committed to the "sustainable resolution of these issues" on the light rail vehicles before the eastern extension to the Confederation Line opens in early 2025.

That includes "a sustainable resolution of the axle bearing issue." The derailment in August 2021 happened after a wheel broke off an axle because of a bearing issue. Testimony at the LRT public inquiry suggested a larger problem: that the way the wheel meets the rail on sharp curves puts too much stress on train components, including the bearings.

The statement said the two sides had resolved their dispute over "the city's administration of the contract during the maintenance phase" — the public inquiry had recommended the city be fair and not overly punitive in the way it made payment deductions.

When asked how much money the city has withheld, and if its maintenance partner would now be paid, Amilcar said she couldn't comment.

Hearing dates dropped

The terms of the agreement are confidential, she said, and Amilcar indicated the public would not see the terms or know whether taxpayer money was involved.

The settlement was made just as the two sides were scheduled to head to court for a mid-February hearing. Lawyers appeared at a short, virtual case conference Friday morning and told a judge those dates could be wiped off the calendar.

This is a far cry from late 2021 when the city calculated so many maintenance "failure points" from two derailments that it sent its private partner a second notice of default — the first had come about in March 2020, roughly half a year after the problem-plagued Confederation Line launched.

The city needed the judge's declaration that RTG had defaulted on its contract so it could explore options that included breaking its 30-year, approximately $1-billion maintenance contract with the consortium, which comprises SNC-Lavalin, ACS Infrastructure and Ellis Don.

One year and a public inquiry later, the stated intention now is to work with Rideau Transit Group. Mayor Mark Sutcliffe acknowledged that at city council on Wednesday.

The transit commission chair re-iterated it on Friday morning.

"One of the conclusions in Justice Hourigan's report was that for our transit system to be successful, we need to be working in good faith, we need to have good communication, and we need to be co-operating with the partnership. I think this reflects that," said Coun. Glen Gower.

OC Transpo confirmed Friday's settlement is not related to the separate court processes involving a large $130 million lawsuit by the City of Ottawa and countersuit by Rideau Transit Group about the construction of the line.