The contract work for Edmonton’s West LRT has been delayed a year, but the city sees no problem with that.
On Tuesday afternoon, the city started the bidding process all over again, and this time, the potential contract has been split into two. The big hurdle was the problems potential bidders had with having to backstop the purchase of rail cars.
“We’re going to have one procurement for the infrastructure and a separate one — starting in 2020 sometime — for the light rail vehicles,” confirmed LRT expansion branch manager Bruce Ferguson.
The city pulled the plug on the previous bidding process in the summer, when two out of three potential contractors bowed out.
“We had everything bundled into one, and now, based on what we’ve heard from industry and industry’s tolerance for risk, which is different than what it was probably a year ago, we decided to split them up and procure them separately,” Ferguson said.
The city does not want to be left holding the bag if the rail cars don’t show up and then the city winds up paying a financial penalty, Ferguson said.
“We know that vehicle suppliers around the world, sometimes, I guess, struggle with deliveries, so contractors don’t want to be on the hook for that.”
The plan now is to restart the process on Jan. 7, and then take most of 2020 to go through qualifications and the initial bids.
“We met with 24 different contractors to understand what is their capacity,” Ferguson said.
“We had lots of interest from contractors as long as we come back to the market with a strategy that works for them, from their perspective, on risk and capacity. We think we’re going to get lots of interest on this one.”
The councillor for where the West LRT will wind up — in Lewis Estates — said he remains confident after this most recent change in plans.
“I don’t look at it as drastically changing how we’re doing things,” Councillor Andrew Knack said when reached in Calgary.
“We weren’t expecting that we would start construction until right at the beginning of 2021 anyways, so this is in line with that original plan.”
Knack is also confident in the provincial funding, as is Ferguson.
“They’re very comfortable with our business case,” Ferguson said after several meetings with the ministry.
“They have reaffirmed the funding for the project. They did introduce some wording in the legislation (for the budget bill) on termination clauses, but the reality is, every funding agreement we’ve ever had has termination clauses in it.”
In all, provincial funding of $3 billion remains committed, although money for Edmonton has been delayed until the next four-year budget cycle at city hall.
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