April 1, 2011

Early in his term Mayor Rob Ford announced the Transit City plan for four surface LRT lines on Sheppard, Finch, Eglinton and in Scarborough was dead. His office spent four months negotiating with the province and Metrolinx to spend the allotted $8.4 billion on making the Eglinton LRT underground and converting the Scarborough RT to a surface LRT. He also sought permission for the city to look for $4.2 billion in private sector funding for a new Sheppard subway. 

That deal, announced March 31, included a provision that the city pay Metrolinx back for any costs associated with canceling the previously approved projects. The bill to the city will be at least $49 million, Metrolinx confirmed to the Town Crier on April 1. 

FRANCIS CRESCIA/TOWN CRIER

SUBWAYS OR BUST: Mayor Rob Ford will have to find $4.2 billion in private money to build the Sheppard subway and an unknown amount for a newly announced line along Finch.

“At this time we estimate there are $49 million in sunk costs mostly for work on the environmental assessments, designs or engineering and project management for Finch LRT and Sheppard LRT,” said Metrolinx spokesperson Vanessa Thomas. “The $49 million (is) for costs we already accrued.

“The next step is to negotiate the terms of how those costs will be paid back,” she said. 

Metrolinx officials will be speaking to various suppliers associated with Transit City including Bombardier regarding reducing the number of  light rail vehicles that have been ordered. 

“Metrolinx entered into agreements for about 180 light rail vehicles from Bombardier for four light rail lines the former mayor described as Transit City for Finch, Sheppard, Scarborough RT and Eglinton,” she said. “Now that Sheppard and Finch will no longer be LRTs, the discussion has to be had with suppliers.

She mentioned that the vehicles are still in the design phase. 

St. Paul’s councillor Joe Mihevc, a proponent of the old Transit City plan, said the city could be on the hook for as much as $100 million due to canceling the Sheppard and Finch LRTs.

“The $49 million is bottom floor,” said Mihevc, a former vice chair of the TTC. “That is the absolute minimum that was an end of September 2010 cost. They continued to work for four months. We signed consultant contracts that were $500 million. Not all will be affected. I think the figure will be closer to $100 million (in lost costs).”

While the mayor’s office negotiated the new deal it still needs approval from city council. It will likely come to council this summer when the mayor’s office has a financial plan to present on how to pay for the Sheppard subway, said Mihevc. 

“There is no business sense behind this to throw between $49–100 million down the drain,” he said. “This is the biggest ideological gravy train to hit the city since amalgamation.” 

Mihevc also said if the mayor gets the private sector to invest $4.2 billion to construct a Sheppard subway it will take the city decades to pay them back from future property taxes associated with new development along that corridor. 

“We will be indebted for a Sheppard subway line that will carry less people than a Sheppard LRT that was going further east and a Finch LRT,” Mihevc said. 

Ford told the media at Thursday’s transit announced a study into the details on how to pay for his $4.2 billion Sheppard subway plan.

“I know all of you ask for the numbers just like every taxpayer will and deserve to know. Those numbers will be finalized during the detailed study. However we expect Sheppard subway project to cost approximately $4 billion,” Ford said. 

“We expect to receive some money from the province after they confirm costs on the Eglinton and Scarborough Crosstown line. And we will continue talking to the federal government after the election about their $333 million commitment for a Sheppard subway. The remainder of the cost will be paid by the private sector.

“Once the TTC approves that report we will take it to council at the appropriate time.”