Region of Waterloo to get $2.2 million, plus another ION train, for LRT delivery delays
KITCHENER -- Bombardier is giving the Region of Waterloo $2.2 million dollars and another ION train as compensation for failing to deliver its LRT vehicles on time.
The settlement was announced after Thursday night’s council meeting.
The region calls it a “fair” agreement and is dropping its claim against Bombardier.
However it doesn’t cover all the additional costs that were incurred by the region during the delay.
Trains were supposed to start running in the fall of 2017, but setbacks pushed launch day back to the spring of 2019.
“It was very frustrating because it was death by a thousand cuts,” says regional councilor Tom Galloway. “It was close to two years, in terms of when we first expected to receive the vehicles until we actually had them all ready to go.”
The delays caused by Bombardier, who was manufacturing the trains, pushed the region's budget from $818 million to $868 million.
That’s $46 million more than what was expected.
The region had previously stated that it intended to recoup those costs and asked Bombardier for $4.4 million in cash for liquidated damages.
But what it ended up agreeing to, was a little different.
“Bombardier has agreed to pay the region $2.2 million in cash,” says Thomas Schmidt, the Commissioner of Transportation for the Region of Waterloo.
The company also promised to give the region one additional ION train, valued between $6.5 and $10 million.
“We were going to be buying additional vehicles in the future,” says Galloway. “So this will be cost avoidance some day in the future.”
The new train will bring the total number of LRT vehicles in Waterloo Region to 15, which the region says will mean more capacity and reliability for the system.
“I think it’s a fair and reasonable settlement for the region and Bombardier,” says Schmidt.
Galloway wasn’t as positive about the final decision.
“It’s not as much as we had obviously hoped.”
Galloway says the $2.2 million will be added to the budget, giving the region more contingency.
While this settlement has wrapped up, the region says there could be more costs added to the LRT project.
Some business owners plan to take legal action over the impact associated with construction.
“There are some related to real estate acquisition,” says Galloway. “None of those are currently progressing, but there could be some other issues such as that to come forward.”
He says the region is prepared for those additional costs.
The new LRT vehicle promised by Bombardier is expected to arrive by the end of the year.