Private firm set to build, run LRT line

A federal threat to withhold hundreds of millions in funding has forced city councillors to commit to having a private company run the southeast LRT line.

The public-private partnership now being proposed would cover construction, ongoing maintenance and daily operations for the line to Mill Woods, rather than leaving operations to Edmonton Transit.

The decision to include operations and maintenance in the P3 proposal was made behind closed doors on Aug. 29, but the details have been confirmed to both the Journal and to Public Interest Alberta. Council hopes to secure $300 million to $400 million from the federal P3 fund. The city was told by federal officials that only a broad P3 project would be considered, sources told the Journal.

Public Interest Alberta executive director Bill Moore-Kil-gannon and union officials for transit and maintenance plan to hold a news conference to protest the decision Tuesday at City Hall.

"Why was this done in camera? Why was there no public discussion of this before they went in camera?" said Moore-Kilgannon.

"The federal government should not be forcing municipal councils to reverse these decisions by holding their dollars hostage," he added. "The councillors felt they had a gun to their head, is what several of them said to me."

Coun. Amarjeet Sohi wouldn't go into the details Monday, but said "sometimes we have to hold our noses." He said he is not in favour of the P3 funding model, but thinks the LRT line should have been built 20 or 30 years ago.

When council considered the issue May 2, councillors voted 7-4 in favour of a P3 application that would have left Edmonton Transit in charge of operations. Two councillors were absent.

On Aug. 29, only Coun. Linda Sloan voted against the motion to change the federal funding application, expanding the scope of the P3. Councillors Kim Krushell and Tony Cater-ina were absent.

The Crown corporation PPP Canada, which started operations in 2009, refused comment Monday, and Edmonton-Mill Woods-Beaumont Conservative MP Mike Lake couldn't be reached.

Sohi wouldn't say exactly what changes the federal government was asking for. "We are being encouraged to look at a different model from the traditional model. People who have the money, they sometimes dictate things."

Sloan said she's worried the P3 model could mean the new train is more expensive to ride and not integrated seamlessly into the existing LRT system.

Coun. Bryan Anderson said under a P3 umbrella, it could still be possible for a private company to contract Edmonton Transit to run the line.

Discussion of the P3 had to happen in camera, Anderson said, because it included detailed budget estimates that could otherwise skew the bidding for the eventual design-build contract.

Another in-camera update on funding for the line is scheduled for Wednesday.

Public reports to council previously estimated the whole west to southeast LRT line will cost $1.8 billion, of which the city plans to cover $800 million. That leaves $1 billion to be split between the federal and provincial governments. If all goes well, construction on the southeast line could start in 2014, and would be the city's first P3 project.

On Monday, the city also announced who will sit on the governance board to oversee the entire west to southeast LRT project.

The six members are: former city manager Al Maurer; Tracey Ball, chief financial officer of Canadian Western Bank; Kate Chisholm, senior vice-president for Capital Power Corporation; Don Hickey, vice-president facilities for the University of Alberta; Ivan Ing, president of Rock-lynn Capital; and Don Lowry, CEO of Epcor Utilities.

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Nathan Clark

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