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Continue with Current LRT Procurement Model

Posted December 06, 2017

Hamilton Light Rail (HLR) urges City Council to continue with the current Light Rail Transit (LRT) procurement model that Council already accepted under the Memorandum of Agreement with Metrolinx on February 10, 2016. 
Likewise, HLR urges the Province and Metrolinx to deny any request to further postpone a final decision beyond the January 24, 2018 deadline that was stated in the November 24, 2017 letter from Metrolinx.
Under the current procurement model, Metrolinx is responsible to contract the design, construction, financing, operation and maintenance of the LRT system to a consortium. The Request for Qualifications (RFQ) for this process was completed earlier this year, but the project has been held up for more than three months since Council requested in August to have the HSR operate LRT instead.
Having the same consortium build, operate and maintain the system provides a strong incentive for the consortium not to cut corners. Further, it means the system will be operated and maintained by a contractor that has already demonstrated the requisite expertise to run an LRT system safely and reliably. 
We also note here that the operations and maintenance employees will almost certainly be unionized under the current procurement model. Any company qualified to build and run an LRT system already has a unionized workforce. This is the model Metrolinx has been using for GO Train operators, who are unionized Bombardier employees.
LRT Operations
Metrolinx strongly recommends against taking operations out of that procurement model. The change would mean that the City assumes the full operational cost, responsibility and liability risk for the LRT. 
City Council has consistently maintained that the city's LRT cost exposure should be minimized. In response, the Province agreed to provide 100 percent capital funding and a procurement model in which the City's operational cost obligation will be a fixed and predictable amount, negotiated under the Master Agreement with Metrolinx.
Assuming full responsibility for LRT operation would go directly against Council's longstanding commitment to protect Hamilton ratepayers from risk.
In addition, taking over operations would mean an additional four or five month delay in order to re-issue an RFQ with the operations piece removed from the contract. The project schedule is already in jeopardy due to this last-minute change request, and every additional delay increases the risk to the project as a whole.
Local Transit Context
We agree in principle that there are benefits to integrating LRT and local transit under the same delivery system. However, the local context matters, and that principle must be balanced against an HSR that is plagued with low morale, shockingly high absenteeism and literally several hundred no-show buses every month. 
It would be imprudent to risk a billion-dollar investment in rapid transit to a delivery service that struggles to maintain local bus service on a day-to-day basis and is a long way from the kind of systemic changes necessary to become the reliable, high-quality transit service Hamilton needs and deserves.
We recognize that not every LRT supporter will agree with this assessment, and that reasonable people can come to different conclusions about this complex issue.
However, we have carefully weighed the various considerations and believe the balance of risks favours maintaining the procurement model that Council and Metrolinx already agreed to, which is already in progress. 
Best Way Forward
When Councillors meet on December 18 to formally receive the letter from Metrolinx, the best way forward is to drop the proposal to have HSR operate LRT and allow the procurement process to move forward as quickly as possible so this project can get back on track.
The worst thing that could happen would be for Council to drag the matter out even further, and toward that end HLR urges the Province not to agree to any proposed extension to the January 24 deadline.
This transformative investment is too important to Hamilton's future for us to drop the ball at such an advanced stage.
Let's get the first phase of the city's rapid transit network built, and as HSR continues to improve its operational readiness, Council can push for HSR to operate the next phase while that project's Memorandum of Agreement is being negotiated.

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