14 July 2011 / le 14 juillet 2011
Submitted by/Soumis par : Nancy Schepers, Deputy City Manager/
Directrice municipal adjointe, Infrastructure Services and Community Sustainability/Services d’infrastructure et Viabilité des collectivités
Contact Person/Personne ressource : John Jensen, Director, Rail Implementation Office/Bureau de mise en œuvre du train (613) 580-2424 x 12764, firstname.lastname@example.org
2. Approve the public-private Design-Build-Finance-Maintain procurement model as the basis for the selection of a private sector partner as established in this report.
3. Approve the Request for Qualifications/Request for Proposals process for the selection of the preferred proponent as outlined in the report.
4. Engage Infrastructure Ontario (IO) as the Commercial Procurement Lead for the OLRT Project as described in this report.
5. Approve the updated Business Case for the OLRT project as outlined in the report.
Que le Conseil :
1. Approuve le plan de mise en œuvre du Projet de train léger d’Ottawa décrit dans le présent rapport.
2. Approuve le modèle de partenariat public-privé de conception, de construction, de financement et d’entretien établi dans le présent rapport comme critère de sélection d’un partenaire privé.
3. Approuve la démarche fondée sur une demande de qualification et une demande de propositions pour la sélection du candidat privilégié, comme l’indique le présent rapport.
4. Retienne Infrastructure Ontario (IO) comme responsable de l’acquisition commerciale pour le Projet de train léger d’Ottawa, comme le précise le présent rapport.
5. Approuve la démarche mise à jour pour l’analyse de rentabilisation du Projet de train léger d’Ottawa, qui est décrite dans le présent rapport.
This report provides Council with a detailed update of the Ottawa Light Rail Transit project and a Design-Build-Finance-Maintain (DBFM) Alternative Financing and Procurement (AFP) approach to secure a fixed-price contract to construct and maintain the system. The Ottawa Light Rail Transit project will provide rapid and frequent transit from the Tunney’s Pasture employment node in the west to Blair Station in the east. This 12.5km, 13 station LRT system includes a tunnel to address the increasingly-severe bottleneck through the downtown core that slows service and challenges the reliability of the City’s transit system today. This project implements the Light Rail elements of Increment 1 of the first phase of the City’s 2008 Transportation Master Plan (TMP).
Updated Tunnel Alignment
Early in the term of Council, the new Mayor and Council set clear expectations for a financially sustainable plan for public transit. Ensuring ridership growth can be supported with a quality transit system has been an early priority for the new Council. Part of ensuring financial sustainability in transit will require building a quality OLRT project that is fiscally responsible. Previous assumptions were revisited with a view to exploring lower-cost alternatives while still maintaining a reliable and appropriate level of service. The approach to the downtown tunnel and the approved “cross country” alignment was fundamentally re-examined.
At the Mayor’s direction, Budget 2011 initiated two important reviews of transit infrastructure planning:
1) A comprehensive review of the capital and operating budgets for providing public transit in Ottawa.
2) A review of all assumptions and decisions on the Ottawa Light Rail Transit (OLRT) project in order to deliver it within the planned budget.
With the benefit of further design effort through preliminary engineering, the project team re-examined the alignment options for the tunnel through the downtown. Preliminary engineering has advanced the design process by examining potential environmental, operational and maintenance improvements to the system. This advanced design allows for a more accurate cost estimation exercise that has helped identify a better-value alignment. The adjusted alignment runs underneath Queen Street instead of tunnelling deep underneath building foundations with extensive underground parking structures. The result is a far shallower tunnel that is substantially less expensive to build and service. This reduction in the required depth of the tunnel also provides a better overall ridership experience for the customer.
OLRT Cost Estimate
The total project estimate, with the improved tunnel alignment and other value engineering cost savings to date, is $1.74 billion in 2009 dollars or $2.115 billion in construction dollars (dollars that have been escalated to year of construction, and account for the dollar’s value in the years that they are spent).
Full responsibility for construction, design and system integration will rest with the construction consortium. Private sector teams will be asked to provide turnkey Design-Build-Finance-Maintain (DBFM) proposals with a fixed-price to construct and maintain the system for a minimum of 15 years. The teams will be afforded flexibility in presenting a construction plan they stand behind from a budget and schedule perspective.
With the improved alignment it will be possible to require a fixed-price contract in the Request for Proposals (RFP) process. Market soundings and advice from experts indicate full risk transfer under the previous alignment would have been difficult to achieve.
The selection of a DBFM approach brings equity and debt partners into the project for better overall accountability and higher value for the City. By including an element of long-term financing the City will harness the full benefit of private sector management and innovation. The City will require the winning proponent to finance up to $400 million of the construction cost. This will ensure equity partners remain at risk throughout construction and the maintenance term. Market soundings and the experience of Infrastructure Ontario indicate that the inclusion of a financing component, together with the use of output specifications which incentivize Proponents to optimize whole-life costing, reduces overall planning, design, project management, and construction costs due competitive pressure on each Proponent and the up-front due diligence conducted by lenders and equity providers drives a better price and better result during the RFP process.
This report serves to update Council on the preliminary engineering design, present the updated project cost estimate, and seeks authority to move forward with the recommended RFP process to select a construction consortium. This report also provides an update to the OLRT Business Case and Business Development Strategy (BDS).
Le présent rapport recommande au Conseil qu’il approuve le plan plus détaillé du projet ainsi qu’une démarche axée sur le modèle conception-construction-finance-entretien en partenariat public-privé qui permettra de conclure un contrat à prix fixe pour la construction du réseau de train léger sur rail d’Ottawa (TLRO), allant du pôle d’emploi de Pré Tunney à l’ouest à la station Blair à l’est. Ce réseau du TLR de 13 stations et de 12,5 km, comprend un tunnel qui passe dans le centre-ville afin de réduire les problèmes de congestion grandissants qui ralentissent le service et affaiblissent la fiabilité du réseau de transport en commun. Ce projet met en œuvre une partie de l’étape 1 de la phase 1 du Plan directeur des transports (PDT).
Mise à jour du tracé du tunnel
Au début du nouveau mandat du Conseil, le nouveau maire et le conseil ont établi des principes clairs relativement à un plan financier durable pour le transport en commun, adapté à la croissance et à la fonctionnalité du service, tout en respectant l’enveloppe actuelle de ce projet. Pour ce faire, les hypothèses précédentes ont été réévaluées; la plus importante étant le réexamen du tracé transartériel approuvé, dans le but d’évaluer des solutions plus économiques tout en maintenant la fiabilité et le niveau de service approprié.
Dans le budget 2011, deux examens importants de la planification du transport en commun ont été amorcés :
1) Examen complet des budgets d’immobilisations et de fonctionnement afin d’assurer le transport en commun à Ottawa.
2) Un examen de toutes les hypothèses et décisions relatives au projet de train léger sur rail d’Ottawa (TLRO) afin de respecter les limites du budget.
L’équipe du projet, bénéficiant des efforts de conception approfondis grâce à l’étude d’ingénierie préliminaire, a réexaminé les choix de tracé du tunnel à travers le centre-ville. L’étude d’ingénierie préliminaire a permis de faire avancer le processus de conception en examinant les possibles améliorations environnementales, opérationnelles et celles liées à l’entretien pour le réseau. Cette manière de faire permet également de faire une estimation des coûts plus précise qui a contribué à cibler le tracé offrant la meilleure valeur. Selon le tracé rajusté qui passe sous la rue Queen, le tunnel sera moins profond et plus économique à construire et à entretenir. Cette diminution dans la profondeur requise pour le tunnel comporte des avantages importants pour le projet et une meilleure expérience générale pour les usagers.
Estimation des coûts du TLRO
L’estimation actuelle pour la construction, incluant le tracé amélioré, s’élève à 1,713 milliard de dollars de 2009 ou 2,115 milliards de dollars de construction (chiffres rajustés à l’année de construction, et qui tient compte de la valeur en dollars pour l’année où ces frais seront engagés).
Les constructeurs assumeront l’entière responsabilité de la construction, de la conception et de l’intégration du système. On demande aux équipes de construction du secteur privé de fournir des propositions clés en main axées sur le modèle conception-construction-finance-entretien, ainsi qu’un prix fixe pour l’achèvement de la construction et l’entretien du réseau, encadré par des normes claires, pour un minimum de 15 ans. Les équipes profiteront d’une grande souplesse dans la présentation du plan de construction, tout en respectant les limites du calendrier et du budget.
Le tracé amélioré qui suit la rue Queen à travers le centre-ville permet encore, dans le cadre du processus de demande de propositions (DP), d’exiger un contrat à prix fixe, comme il était prévu dès le début du projet. Les sondages du marché et des conseils d'experts indiquent que le transfert des risques complète sous la alignent précédente aurait été difficile à réaliser.
Le choix de la démarche conception-construction-finance-entretien permet d’adjoindre des partenaires qui participent au développement et au financement du projet, assurant une meilleure responsabilité globale et une valeur plus élevée pour la Ville. La Ville exigera un filet de sécurité d’au moins 400 millions de dollars pour assurer l’exécution du contrat. Cette exigence garantit que les partenaires avec participation assurent entièrement le risque pour la durée du contrat d’aménagement et d’entretien.
Le présent rapport a pour intention de tenir le Conseil informé des résultats de l’étude d’ingénierie préliminaire, de présenter l’estimation mise à jour du coût du projet et de demander d’obtenir les autorisations pour aller de l’avant avec le processus de DP recommandé afin de sélectionner un partenaire du secteur privé. Le présent rapport fournit également une mise à jour de l’analyse de rentabilité du TLRO et la stratégie de développement commercial.
In January 2010, City Council approved the Downtown Ottawa Transit Tunnel (DOTT) Planning and Environmental Assessment Study – Recommended Plan (Ref No. ACS2009-ICS-PGM-0214) and directed staff to begin an expedited Environmental Assessment process, the Preliminary Engineering process, and property acquisition for the project. At the same meeting, Council approved the $2.1 billion cost estimate for the project developed the previous year.
Work undertaken since then provides a significantly more detailed view of the project and recommends the Design-Build-Finance-Maintain (DBFM) Alternative Financing Procurement (AFP) approach. The competition will secure a fixed-price contract to complete Ottawa’s Light Rail Transit (OLRT) project running east-west from the Tunney’s Pasture employment node in the west to Blair Road in the east. This 12.5km, 13 station LRT system includes a tunnel through the downtown core to address the growing transit bottleneck that slows service and challenges the reliability of the transit system today.
The project’s Preliminary Engineering phase commenced in September 2010 with the confirmation of the beginning of the period of cost share eligibility for the previously announced federal and provincial combined contribution of $1.2 billion. The City selected Capital Transit Partners (CTP), a private sector team comprised of Morrison Hershfield Limited, Jacobs Associates Canada Ltd, STV Canada Consulting Inc, and URS Canada Incorporated, along with several other sub-consultants. CTP was tasked with reducing capital and operating costs, improving operating characteristics, reducing future maintenance requirements, minimizing construction related impacts and minimizing impacts to adjacent properties by advancing the design through Preliminary Engineering before initiating the procurement process to implement the system. CTP’s staff members have extensive experience in planning, design and procurement of light rail projects including the Hudson-Bergen Light Rail on the New Jersey Gold Coast, and the Sound Transit University Link in Seattle.
In May 2011, Council approved the “OLRT Schedule Acceleration and Procurement Option Selection” report that advanced the project completion date by one year, to spring 2018. In the same report, Council directed a Design-Build-Maintain (DBM) procurement approach to drive private sector competition and to ensure good integration and the lowest overall cost. Staff committed to include recommendations in this report that would provide a financial method to secure performance from, and transfer risk to, the successful consortium.
A. OTTAWA’S LIGHT RAIL TRANSIT (OLRT) PROJECT UPDATE
Addressing Ottawa’s Transit Challenge
Transit ridership per capita in Ottawa is already one of the highest of any city its size in North America and is expected to experience continued growth. The City’s population and employment growth projections anticipate a 30% increase over the next twenty years. Based on this growth, demand for public transit will increase 64% by 2031 – from 100 million annual trips to 164 million. Peak hour ridership through the downtown core will grow from 10,000 people per hour per direction to more than 18,000 people per hour per direction.
The continued success of public transit in Ottawa now presents a challenge for the City. The current system is already at capacity in the downtown core. Further, the existing system faces contextual obstacles. Inclement weather, vehicular, cycling and pedestrian street traffic, and fourteen sets of traffic lights for north-south crossing streets, all contribute to congest the traffic network as it moves east-west along Albert and Slater.
The City’s 2008 Transportation Master Plan seeks to address this challenge by upgrading the most heavily travelled portions of the Transitway to Light Rail Transit (LRT) technology. Approved in 2008, the Transportation Master Plan calls for the construction of more than 40 km of light rail lines.
By moving the downtown portion of the City’s transit system onto its own grade-separated right of way, the City eliminates the surface conditions that slow transit down. The new system will allow for renewed productivity increases in public transit, running longer trains faster and more frequently than would otherwise be possible in the core. This improved LRT system, from Tunney’s Pasture to Blair Road, will provide a reliable and rapid three minute and fifteen second service in peak traffic hours that can accommodate ridership from opening day and has room to grow over time to meet future transit demand beyond 2031.
OLRT Preliminary Engineering
Design Review and Modifications
The new Mayor and Council determined that achieving financial sustainability in public transit was a clear priority. Early action was taken with the implementation of the network optimization process. In the Budget 2011 process, at the Mayor’s direction, staff initiated two important reviews of transit infrastructure planning:
1. A number of councillors, the Mayor, advisory groups and the public expressed concern that the stations were undesirably deep and that travel time down to the platforms would be too long, creating an unsatisfactory rider experience.
2. The depth of the original alignment made it more difficult to transfer risk to the private sector due to the inherent risks associated with gauging deep subsurface conditions – making it unlikely to achieve a truly fixed-price contract.
3. In the context of a more advanced design, the preliminary engineering team re-examined the tunnel alignment options previously considered in the Environmental Project Report.
With the benefit of the more advanced design developed through preliminary engineering, it became clear that the Queen St. alignment option was significantly less costly than the “cross country alignment.” Re-evaluation of the tunnel alignment presented an opportunity to reduce its overall depth, while meeting the original cost estimate and the previously reported and approved accelerated schedule. The improved alignment dramatically reduces both the risks and costs associated with the construction of a tunnel through the downtown.
The new alignment moves the west portion of the tunnel northward by one block from Albert to Queen. With the benefit of more detailed tunnel cost information provided through preliminary engineering, it was possible to do a more thorough analysis to determine the alignment that provided better overall value. As with the original assessment, several important criteria including catchment area, environmental impacts, construction disruption, effect on properties and business, and customer experience were evaluated based on the new information developed during the ongoing design process. The result of this updated analysis and evaluation determined that the Queen alignment provides best overall value with a better ridership experience, superior connectivity, far less geotechnical risk and lower costs.
By reducing the required depth of the tunnel, the improved alignment achieves significant benefits for the project. The tunnel portion of the project will now be less expensive to build. Running underneath Queen Street allows for decreased depths throughout, and ensures that downtown stations and additional private sector accesses are less costly to construct and service. This proposed alignment will no longer be under the deep foundations of multi-floor buildings.
Through examination of the more detailed geotechnical information obtained in 2010, the decision was made to shorten the tunnel’s overall length. Campus Station will consequently be a surface station. This configuration will control costs and improve cycling and pedestrian linkages, integrating well with campus life and the surrounding communities.
The system proposed in this report will continue to provide a high ridership experience and serve Ottawa long into the future. The specific changes, their benefits to passengers and their contribution to reducing construction risk are described below.
FIGURE 1: Updated Tunnel Alignment (Overhead View)
FIGURE 2: Updated Tunnel Alignment (elevation view)
Figure 3: Cross Section Comparison
· Reduced travel times – Distances from street entrances to platform are reduced from two minutes to approximately one minute. The overall feel of the system will be far less “subterranean.” The depth of the previous alignment was the number one concern expressed during public and stakeholder consultations.
· Better building connections –The shallower tunnel allows the downtown stations to be linked into existing basements and shopping concourses (for example, the concourse between towers at Place de Ville). It is now easier to provide access to the transit system from within major buildings in the core without exposure to the elements.
· Better Accessibility – The reduced depth of the downtown stations and better integration with existing buildings will make public transit more comfortable and easier to access, particularly for those with mobility challenges. For example, all students, including those with a disability, would be able to depart from Carleton University with eight-minute service on the O-Train corridor, get to Bayview and transfer onto a rapid service train to their class at the University of Ottawa within minutes. The system will be designed to fully comply with the Accessibility for Ontarians with Disabilities Act (AODA).
· Shallower tunnel alignment – Enhancing the customer experience and maximizing risk management will come from a dramatic reduction in tunnel depth from end-to-end. The improved alignment achieves a 50% (24 meter) reduction at its deepest point. Each station will be correspondingly less expensive to excavate and service. The new alignment allows for far more flexibility in the construction methods that can be employed. The construction consortium will be free to propose solutions that include a mix of methods from “cut and cover” to varied mining techniques that may or may not include use of a tunnel boring machine. Proponents will be given the information and freedom of approach they will need to take on full accountability for the on-budget and on-time performance of the project.
· More certain risk transfer – The subsurface excavation will be better understood due to the wealth of existing information regarding geotechnical conditions under the Queen and Rideau alignments that has already been gathered from investigations and excavations made in connection with the construction of existing buildings. The combination of existing information and additional geotechnical work being conducted for the project will result in a more robust geotechnical baseline and allow for a better risk transfer model for the construction consortium. This will translate into cost savings for the project.
Design to Budget
The Preliminary Engineering team was challenged with ensuring that their design effort respected the requirement to deliver a project within the Council-directed budget. Modifications to the functional design were made, based on additional information obtained during preliminary design and geotechnical investigations, while still maintaining the required functional objectives. These changes include shortening the length of the tunnel and building Campus station at grade; shortening the platform lengths while protecting for future extensions when volumes warrant; reducing station concourses resulting in minimizing the size of station caverns; and simplifying Bayview and Blair station layouts. In addition, the team undertook value engineering exercise that generated the Queen Street alignment that is discussed in this report.
B. UPDATED PROJECT COSTS AND PROCUREMENT
Construction Estimate and Affordability
The current total project estimate, with the benefit of the shallower alignment, is $1.74 billion in 2009 dollars or $2.115 billion in construction dollars. The City will require that a fixed-price Design-Build-Finance-Maintain (DBFM) arrangement be provided in response to the Request for Proposal (RFP). The full responsibility for construction, design and integration will rest with the construction consortium. The retained risk for the city involves those risks that the City is best positioned to manage and mitigate, such as archaeological conditions. A provision for these risks has been included in the updated cost estimate.
Table 1: Updated Cost Estimates
The procurement approach provides proponents with the right incentives and necessary flexibility to create strong competition, lower costs and achieve better results within the timeframe established by Council. The recommendations of this report enhance this objective. This Design-Build-Finance-Maintain (DBFM) approach achieves a single line of accountability to deliver and maintain a reliable system with clear performance and availability standards. This integrated private sector approach has been shown to deliver the best results in projects of this type, driving significant savings in overall planning, design, project management, and construction that can sufficiently mitigate any potential cost of consortium held risk or the premium of private finance.
Private sector construction teams will be asked to provide turnkey DBFM proposals with a fixed-price to complete project construction and maintain the system to industry accepted standards that are stipulated by the City for a minimum of 15 years. The teams will be afforded maximum flexibility in presenting a construction plan they stand behind from a budget and schedule perspective.
With the improved alignment following Queen Street through the downtown core, it is possible to require a fixed-price contract in the RFP process. Proponents will be expected to bring their designs forward, backstopped by price guarantees for full completion and performance.
The selection of a DBFM approach brings equity and debt partners into the project providing better overall accountability and higher value for the City. The City will require the construction consortium to provide private financing of up to $400 million of the construction costs to stand behind overall contract performance. This will ensure equity partners are at risk, and therefore provide strong oversight, throughout construction and the maintenance term. At end of contract handover, the consortium will continue to have significant private capital at risk that will ensure proper system condition at transfer.
The City will provide in its output specifications and through the RFP process a solid design base for each short listed team to build upon. The output specifications will include up to a 30 per cent “proof of concepts” design advancement that the City believes can be constructed for $2.1 billion (construction dollars).
The private sector bid teams will advance the design of system elements to a level sufficient to provide fixed-price responses to the RFP. There will be an expectation that in completing their design, the full flexibility offered by the City in construction technique, staging and the details of the design will provide the scope to deliver the system within the City’s budget. The designs presented in this report are indicative and were used to generate this costing. Aspects of the stations and system proposed by various teams will vary from this baseline as teams use their own techniques, innovations and strategies to compete to deliver the best overall value to the city.
The construction consortiums will have at their disposal various proprietary or intrinsic advantages to manage risks to deliver the project on-time and on-budget. A competitive process is the best way to ensure the City gets the best price, with the best overall schedule and the desired risk transfer. It is important to drive the proponents to manage the delivery of such a complex and critical part of the public transit system with excellence by making a single integrated team fully responsible and at risk for delivering the agreed-upon result. The provision of any risk or financing premium above the estimate provided should be accommodated by proponents through the design period and proper project management. The City’s Long Range Financial Plan - Transit has considered within its affordability analysis the potential that submissions do not achieve this outcome.
Operating, Maintenance and Capital Rehabilitation
The cost of operating, maintaining and providing for lifecycle renewal of the system for a minimum of 15 years is a very important element in the delivery of a sustainable transit system. This initial leg of what will be the overall OLRT system with several future extensions carries with it certain one-time costs that will serve an expanded system. Elements like the LRT control centre and back-up control centre and the maintenance and storage facility, which will serve future LRT extensions, make the initial project disproportionately more expensive to build than subsequent phases.
The Preliminary Engineering team, Capital Transit Partners, conducted an update and refinement of expected costs per service hour and per kilometre. These estimates are based on benchmarks for the costs experienced in peer systems applied to a review of the details of the proposed system in Ottawa. The updated operating, maintenance and capital cost numbers are also used as the basis for the Long-Range Financial Plan for Public Transit.
It is important to recognize that by 2021 the OLRT system produces a net savings of $16M a year versus attempting to provide the equivalent bus service through the downtown. The $16M dollar savings will grow over time as the OLRT’s significantly greater capacity allows for increased ridership and therefore revenue capture that could never be replicated by using buses.
The bus service hours saved immediately and in the near term will address the fastest growing pressure on the OC Transpo budget: the downtown bottleneck that is choking off further productivity improvements. The effect of slowed transit times and congestion through this downtown bottleneck has already begun to drive up overall system costs. Further productivity gains and lower cost per passenger-kilometre travelled can only be achieved by solving the unsustainable nature of more bus transit through the downtown.
The savings resulting from a reliable rapid transit spine will compound over the years. The immediate bus savings contribute to funding the operation of a much more effective rapid transit network for a roughly equivalent cost. The new system will be able to achieve ridership growth at a lower cost while providing a much better transit experience than attempting to push more buses through the downtown.
The LRT system has been designed to have significant excess capacity, robust enough to last beyond 2031 and expandable through to 2048 ridership projections with the acquisition of additional trains. Minimizing the long-term costs of maintaining the system will be a priority in the RFP.
Table 2: Year One Cost to Operate and Maintain
Train Maintenance Cost
Variable Infrastructure Cost
Annual Electricity Cost
Fixed Annual Control Centre Cost
Fixed Annual Infrastructure Cost
Total LRT O&M
The above table represents day one costs and will increase with inflation over time. The RFP process will require each proponent to present predictable maintenance costs. Maintenance and lifecycle obligations of the Operator will be enforced through contractual mechanisms such as payment deductions due to poor maintenance and other support measures such as performance guarantees.
To that end, City staff and IO officials have met several times to examine and evaluate the procurement model they offer municipalities and their potential role.
IO has extensive experience in procuring large infrastructure projects and preparing Value for Money (VFM) assessments. In addition, they have significant project financing expertise, including experience with institutional lenders that is particularly valuable in a private finance procurement model, as is being recommended to Council. The City’s analysis outlined a number of advantages that IO has demonstrated in past projects:
· Date-certain delivery at a fixed cost;
· Determining appropriate risk transfer to the private sector, thus reducing public sector retained risks and creating value for money;
· Private sector familiarity in IO’s processes and documents, and confidence that projects procured by IO will proceed and reach completion, which encourages bidder participation;
· Experience applying the Alternative Finance Procure (AFP) approach to many of the Province’s largest public projects;
· Rigor and discipline brought to the procurement process and particularly to the Project Agreement based on the experience it has gained and the opportunity to enhance the City’s capacity to implement the project.
As a result of this analysis and market soundings, City staff are confident that IO would provide significant value to the OLRT project and recommend that the City engage them as the Commercial Procurement Lead for the OLRT project.
In this role, IO representatives would lead the procurement phase of the OLRT project up to financial close and would report to the Director, Rail Implementation. The City will retain final approval authority on all decision-making. The OLRT project’s procurement and overall implementation is overseen by the City’s OLRT Executive Steering Committee which is made of senior City staff: Kent Kirkpatrick, City Manager, Nancy Schepers, Deputy City Manager, Infrastructure Services and Community Sustainability, Rick O’Connor, City Clerk & Solicitor, Marian Simulik, City Treasurer, Alain Mercier, General Manager, Transit Services, and John Jensen, Director, Rail Implementation. Given IO’s role in procurement, it is recommended that Rob Pattison, Vice President, Transit, and Mathew Kattapuram, Senior Vice President, Civil Infrastructure, Infrastructure Ontario (IO) join the OLRT Executive Steering Committee. This reporting arrangement will ensure the City benefits from the advantages of IO involvement during the procurement process while ensuring the City’s objectives are met.
The OLRT Executive Steering Committee will confirm and recommend the preferred proponent to Council at the close of the RFP.
The cost of this engagement with IO is being negotiated but it is anticipated that their inclusion will obviate the need for other project management services of an equivalent cost and therefore be included in the $2.115B total project cost.
After contract award, it is recommended that Infrastructure Ontario (IO) remain as part of the project team in an advisory role for contract interpretation and enforcement during the construction phase. Ultimately, IO would transition to a support role for contract interpretation and enforcement on a request basis during the maintenance period.
As outlined in the accelerated schedule approved by Council in May 2011 as part of the OLRT Schedule Acceleration and Procurement Option Selection Report, the RFP will be released in October 2011. This will provide the pre-qualified proponents with nine months to submit final proposals. The RFP documentation will also include a full draft version of the DBFM Project Agreement, which will include various construction and maintenance obligations to be fulfilled by the successful private-sector counter-party, with as many of the project schedules as possible completed in draft form ensuring that the City is protected in respect of performance problems arising during the construction and maintenance phases and providing the parties with a suitable dispute resolution protocol.
Up to four (4) proposals will be evaluated and scored with the benefit of rigorous evaluation by the Preliminary Engineering team, Infrastructure Ontario and the staff at the Rail Implementation Office and Transit Services. The review process will be overseen by the OLRT Executive Steering committee (membership listed above). The point allocation process and bid evaluation will be reported to Council through a mechanism that is independent of political involvement. However, Council as a whole will maintain final approval of the winning proposal and contract award.
In advance of the RFP being issued, a Request for Qualification (RFQ) process will be completed. The major elements of the RFQ process include:
A Request for Proposal (RFP) will be issued in October 2011 and close in December 2012, having the following major highlights:
1. A full description of the project’s major elements.
2. All available data and information that the City has gathered / developed including all of the geotechnical information; all of the horizontal and vertical alignment details and the detailed designs (to approximately 30%).
3. All of the technical specifications that the proponent must meet. These will be very detailed output-based specifications that will allow the proponent to use innovation in meeting the City’s specifications without the proponent’s hands being unduly tied as to “how to do it.” Rather, the City will specify “what needs to be done and how it has to perform.” These specifications will not only cover all of the design and construction requirements, but also the maintenance and rehabilitation requirements for the duration of the construction and maintenance periods. An important element of the specifications will be the design and function of the tunnelled portions of the project and the related stations.
4. A full draft version of the DBFM Project Agreements with as many of the project schedules as possible completed in draft form so that the City is protected with guarantees including all of the provisions dealing with protecting the City’s interests in the event of disputes and any non performance issues.
5. A clear listing of how risks are being allocated to the contractor and access by the City to security packages that will be put in place to ensure that the contractor delivers the project on budget and within the required schedule.
6. Very thorough evaluation criteria that will clearly describe on what basis a preferred proponent will be selected, who makes the approval, the timelines for the selection, the safeguards that will be implemented by the City to protect the City and the integrity of the process. The City will continue to retain a Fairness Monitor to oversee the procurement process and to help ensure that the executed process is fair, open, transparent and consistent with procurement best practices for such an undertaking.
7. The RFP process will also provide many opportunities to engage the short-listed proponents to better describe the City’s requirements, to seek opportunities to further identify and eliminate risk (and increase certainty), and to encourage innovation in design, construction and in the maintenance activities. These engagements (e.g. Commercially Confidential Meetings) with the short-listed proponents are standard best practices implemented on all major infrastructure projects.
8. The submissions will be extensively evaluated in accordance with Infrastructure Ontario’s best practices by the City and Infrastructure Ontario, with support from the City’s technical advisors (CTP), its financial advisor (Deloitte), its legal advisors (BLG), and other specialized advisors that may be required. The submissions will be extensive and voluminous and will require significant resources to fairly evaluate the submissions to make sure that the best consortium is selected for this significant project.
9. At the end of the evaluations, the OLRT Executive Steering Committee will make a recommendation of the preferred proponent to Council, and subsequent to Council’s approval will then move to award the contract and notify the non-selected proponents.
10. The preferred proponent will be required to post a bid security to ensure that they continue to work in good faith with the City to negotiate and finalize a contract in the manner set out in the RFP.
11. Typically the preferred proponent will execute a series of contracts leading to both a commercial close and then a financial close. These are typical steps that occur in such projects.
12. The City also intends to provide a de-brief to all proponents at the end of the procurement process.
13. Lastly, and in recognition of the significant level of effort and expenditures required to submit a compliant bid or response to the RFP, the City will be offering a design build fee to those proponents who submitted a bona fide submission. The exact quantum of the design build fee will be determined through market sounding, but is estimated to be around $2M. Again, this is customary in the industry to partially off-set the significant funds expended to produce and provide a response to the RFP and in recognition of the value of the design provided.
During the RFQ stage, respondents will be directed not to commit to a specific LRT Systems/Vehicle system. This will enable the City to focus on qualifying the best construction consortium and ensure that a qualified consortium is not disqualified due to a non-compliant vehicle.
Once the City completes the evaluation of the RFQ submissions and short-lists the four respondents, the RFP will be released and qualified constructors will be free to negotiate with interested systems/vehicle integrators to find value-based partners. The short-listed teams will then be required to present their LRT systems and vehicles in Commercially Confidential Meetings. During these meetings, nonbinding direct feedback to the presentations will be provided by the City’s technical subject matter experts. The goal will be to include as many qualifying systems/vehicle integrators as possible.
The short-listed teams will then be required to submit a formal, fully detailed pre-qualifying interim package demonstrating how their LRT systems and vehicle options will conform to the project requirements. Written feedback to these submissions will be provided by the City’s technical subject matter experts allowing time for short-listed teams to select from the systems/vehicle packages submitted. Teams may submit as many systems/vehicle packages as they like for pre-qualification during this RFP process. Pre-qualified systems and vehicle integrators will then negotiate with short-listed construction and integration teams, fostering maximum competitive tensions.
C.OTTAWA’S LIGHT RAIL TRANSIT SYSTEM DESIGN
Stations Design Principles
Evolving from the initial functional design, the Preliminary Engineering designs now before Council achieve a balance of function and cost, while advancing the key corporate objectives of economic, environmental, cultural and social sustainability. Leading industry expertise from the preliminary engineering firms, including URS Canada and Perkins+Will, have led to the development of station designs that control costs while maximizing the environmental and mobility benefits of LRT transit implementation.
The application of material and energy efficiency within station designs will help ensure the system remains economically and environmentally sustainable. Thoughtful integration with local pedestrian and cyclist movements will further enhance the overall sustainability of Ottawa’s transportation network.
Careful attention has been paid to creating the positive customer experience that will be essential to achieving the modal split targets identified in the Transportation Master Plan. Beyond the pleasing aesthetic qualities of the station designs, design elements such as full accessibility, passenger safety and security have been included. Stations will provide enhanced comfort through passive and active climate control. All of these features combine to ensure that the system will successfully attract increased ridership.
The stations are designed to promote development and intensification of the surrounding lands. Development around existing and planned transit links will reduce traffic, provide for a better environment, grow transit ridership, and improve the City’s overall sustainability. Further, the City maintains the flexibility to expand portions of the system in a fiscally prudent manner as demand warrants. The design included in this report includes plans to maximize development potential in lands surrounding the system – whether they are owned by the National Capital Commission, other Federal partners, the City, or private developers. By enabling development around stations, the City will advance its goals for environmental sustainability, transportation management and growth in the assessment base.
Keeping Ottawa Moving
The effort to accelerate the project implementation schedule recognizes and has taken into consideration a number of important requirements, including the focus on maintaining good mobility for private cars and public transit throughout construction.
The 150th anniversary of the founding of our nation will be celebrated in Ottawa during the summer of 2017. As the nation's capital, we will play host to Canadians from coast-to-coast and international visitors. With this in mind, the City is taking steps now to ensure the downtown area is ready for this important event: any construction disruption in the downtown must be completed by this time and, as construction is undertaken through the core, the impact must be minimized.
Minimizing transportation disruption is an equally critical consideration when converting sections of the Transitway to LRT. In March 2011, the Province of Ontario tabled the provincial budget that included funding for the Queensway (Hwy 417) widening. This funding has enabled the acceleration of OLRT project by allowing the traffic rerouting to commence earlier and will significantly increase transportation mobility during project construction. The City requires the use of the widened 417 lanes by the end of 2015 in order to accommodate enhanced mobility and transit service to the east-end of Ottawa during Transitway conversion.
Efforts leading up to OLRT construction will focus on maintaining transit ridership as the Queensway widening is underway and continuing this effort during OLRT construction.
The City is also undertaking a Transportation Demand Management Strategy (TDMS) study, specific to the project, that will recommend strategies to maintain transit ridership and minimize disruption on the transportation network during construction.
As the detailed RFP document is developed, considerable weight will be given to project scheduling. A premium will be placed on the fastest possible construction with the least possible disruption to transit and traffic operations while achieving the best value for the City. The shortlisted proponents will be challenged during the RFP process to review these schedule estimates and to commit to identifying additional schedule advancement opportunities. Such innovative ways of advancing the schedule will have to consider impacts on adjacent properties, businesses and communities.
Société de Transport de l’Outaouais (STO)
The project team and OC Transpo staff are working closely with the Société de transport de l'Outaouais to maximize opportunities to integrate the two transit systems and encourage STO customers to use the light rail line as part of their trip, provided it increases their level of service. The objectives of this partnership are to both improve interprovincial transit service and reduce the number of buses on Wellington, Rideau, and King Edward.
The operational benefits of the Rapibus design, combined with a series of planned technological and operational improvements, serve to address the City of Ottawa's short and medium term need to reduce combined bus traffic in the downtown core. As the rail network in Ottawa develops, with improved North-South frequency of the O-Train and greater fluidity from the core to the East and West, new travel patterns and opportunities will emerge to use rail connections as the preferred choice of transit, provided that proper infrastructure capacity is in place.
The project team and OC Transpo have also formed a working group with Société de transport de l'Outaouais (STO) to maximize opportunities to improve the integration of the two systems. This working group, combined with the City’s participation in the Interprovincial Transit Strategy, will lead to better understanding and developing operational strategies that lessen the movement of buses through downtown by examining various technological and operational improvements and opportunities, which include changing routes, transfer points and staging areas. A solution being explored is the use of the Downtown West Station as a transfer point for STO buses which could reduce the number of buses in the downtown core as riders can travel on LRT to their final destination outside the core (Tunney’s).
D. OLRT AGREEMENTS AND REGULATION
Consultations and Approvals
The City has conducted a thorough consultation program throughout the development of the Ottawa Light Rail Transit project. Four public open houses have been held to date: on February 26, 2009, June 24, 2009, October 26, 2009 and February 23, 2010, respectively. In addition to these public meetings, the Rail Implementation Office has conducted consultation and outreach sessions with seven BIAs, 16 Community Associations, the Ottawa Chamber of Commerce and several consultation sessions with City Council’s Advisory Committees. The project team maintains active relationships with more than 40 external agencies with a direct interest in the project. These include funding partners, regulatory bodies, transit clients and the Algonquin First Nation.
In addition to these activities, the project team maintains the ottawalightrail.ca website and uses Facebook and Twitter to keep residents informed about the project. To date, more than 40,000 unique visitors have logged onto the site. The project team has responded to more than 300 public inquiries submitted through the website, e-mail, telephone and from the offices of Councillors and the Mayor.
Provincial Environmental Assessment
Staff have completed the Provincial process and received a Notice to Proceed from the Minister of the Environment on August 11, 2010.
As a result of changes to the Functional Design brought about by preliminary engineering, staff is in discussions with the MOE about substantiating these changes through the approved amending procedure outlined in the EPR and provincial regulations for transit projects. The MOE has indicated that the City is on the right track in preparing a draft self-assessment for the Ministry’s review. This self-assessment will be backed with a solid technical rationale for the changes outlined in this report. The changes are deemed minor in nature in terms of affecting provincial interests and the mitigation of economic, social and cultural impacts. Ministry staff have directed City staff to finalize the self assessment for review and have indicated that the proposed modifications would be considered minor alterations that reflect current public input. To support the submission to the MOE, Council approval of the changes outlined in this report is required.
Federal Environmental Assessment
The Federal Environmental Assessment Process is outlined in Sections 14 – 16 of the Canadian Environmental Assessment Act. The act follows a three (3) step process:
· A Screening Report to be prepared by the proponent. The Report outlines any environmental effects of a project, the significance of the effects, public comments if any, and any potential mitigation measures.
· An Assessment is undertaken by a review panel and a report is prepared by them. As part of this review, the Responsible Authority, which in the case of the OLRT Federal Environmental Assessment is Transport Canada, prepares a Scoping Document. This is where the Responsible Authority identifies what parts of the project in their opinion are subject to the Environmental Assessment.
· Design and implementation of a follow-up program. This action is also undertaken by the Responsible Authority. They may implement conditions of approval and mitigation measures to deal with an identified environmental impact.
The Draft Screening Report is following the planned schedule and will be submitted at the end of 2011. Federal approval of the EA is anticipated in Q1 2012.
Partners and Agreements
As noted above, the City has secured approval-in-principle from each of the Federal and Provincial governments for their respective $600 million contributions to the OLRT project and has been negotiating the terms and conditions of contribution agreements with each. The project team is also actively engaged with the Ministry of Transportation of Ontario to ensure the 417 lane widening project is integrated with OLRT construction timelines and incorporates transit priority ramps to facilitate transit operation within the 417.
Negotiations are ongoing with Transport Canada to authorize the City to regulate the construction, operation, public safety, rates and conditions of service of the planned LRT network. Transport Canada is also the lead/responsible authority for the federal Environmental Assessment and City staff is continuing to work with them on this requirement.
Additional federal partners include Public Works and Government Services Canada, the National Capital Commission, Parks Canada and the National Arts Centre. Provincial partners include the Ministry of Transportation and Infrastructure Ontario.
The Rail Implementation Office actively collaborates with each of these partners to ensure maximum benefits are accrued through this joint investment in Ottawa’s public transit infrastructure. Monthly meetings are held with each partner and more frequent meetings are held as needed to complete specific agreements.
Business Development Strategy
Locally, there are a number of arrangements being negotiated with property owners. As of end of June 2011, two Memorandums of Understanding (MOU) have been signed with private businesses along the alignment and active negotiations are underway with an additional five. All have expressed an interest in an integrated below-grade connection to the original tunnel segment of the project.
The City is currently in active negotiations with the following groups that are expected to sign MOUs before year end:
· An integrated entrance within a large office development project for below-grade entrance at the Downtown West station.
· An adjacent entrance to possibly two major buildings at the Downtown East station.
· An adjacent below-grade connection to a cultural centre from the west entrance of the Rideau Station.
· Integrated entrances within two major retailers at the Rideau station. (MOU was endorsed by one of them on May 20th, 2011)
· Stand-alone station for a major post secondary education facility, subject to other joint initiatives related to the implementation of Downtown Ottawa Urban Design Strategy (DOUDS) and the Nicholas-Mann Gateway project.
Other potential cooperative agreement opportunities include:
· A major planned redevelopment near Tunney’s Pasture.
· A connection to the Tunney’s station from a private building owner.
· A secondary connection to the Downtown West Station’s eastern entrance.
Further updates on the Business Development Strategy will be provided to Council as negotiations advance.
D. SYSTEM BENEFITS AND BUSINESS DEVELOPMENT
In September 2010, the Federal Minister of Transport, Infrastructure and Communities and the Provincial Minister of Infrastructure provided the City of Ottawa with an Approval-in-Principle letter (AIP) and a “Green Light” letter, respectively. These letters confirm project cost eligibility from receipt of letters forward, and set out a number of requirements the City must achieve, fulfill and maintain in advance of the contribution agreements. One of the requirements set out in the aforementioned letters is that Council approve a final business case for the OLRT project.
The City has confirmed with its funding partners that City Council’s approval of this OLRT Cost and Design report would constitute approval of the final business case and fulfill the funding condition, provided the report include an update of the project benefits and statistics laid out in the March 2010 “Business Case: Downtown Ottawa Transit Tunnel (DOTT): Tunney’s Pasture to Blair Station via Downtown LRT Tunnel.”
Below is a summary of the benefits of OLRT implementation, the full detailed metrics are laid out in the attached Document 2: Ottawa Light Rail Transit (OLRT) Updated Business Case – Project Benefits Analysis:
Quicker and More Efficient Transit
Currently it's supposed to take 17 minutes to cross downtown by bus but because of congestion it often takes 5 and even 10 minutes longer. Delays are too common and many people are already in the habit of allowing extra time for their trip. By avoiding the majority of the conditions that cause delays and congestion, running LRT under the downtown will save approximately 10-15 minutes from a typical rider’s peak hour daily commute.
The Transportation Master Plan estimates a ridership uplift of 9% through the introduction of LRT. More than 40% of all transit trips taken in the City will use the OLRT system for all or part of their journey, with the downtown stations predicted to handle more than 50 million annual trips in 2031.
· Total economic stimulus to the Ottawa area from the project of $3.3 billion due to construction alone.
· Over 20,000 person-years of employment during construction.
· $3 billion in present value over the 30 year analysis period for transit users, including:
When the benefits of the project (net present value) are compared against its operating and capital costs (net present value) over thirty years the project will generate a very favourable benefit to cost ratio of 1.99.
The City of Ottawa has a policy that requires all major capital projects in the City to devote funds to public art to beautify the newly constructed public space. For the OLRT project, this means the City will be making a strong investment in new public artworks.
Public Art in a transit facility will increase customer satisfaction, manage the facility’s reputation while increasing advocacy with customers, and promote buy-in from Ottawa citizens and other stakeholders.
From an economic point of view, the Conference Board of Canada estimates that real value added output by culture sector industries was over $46B in 2007, roughly 3.8 per cent of Canada’s total real gross domestic product (GDP). When the effect of arts and culture industries on other sectors of the economy are added in, the overall impact is much larger; $84.6 billion, or 7.4 per cent of total real GDP. Employment attributable to the arts and culture industries (including hired artists) through direct, indirect, and induced impacts amounted to over 1.1 million people in 2007. On average, for every $1 of real value-added GDP produced by Canada’s culture industries, roughly $1.84 is added to overall real GDP.
An example of the progression of art in transit can be seen in the growing field of electronic and digital art. Ottawa has the perfect ecosystem for a thriving digital media industry: outstanding research and educational assets in science, technology and design, and a strong base of artistic and creative employees.
A plan for public art is being developed to ensure this transformative project leads to the creation of memorable public spaces through the integration of arts and culture. This could include combining the opening of the new LRT stations and the unveiling of new public artworks with the City's celebration of Canada’s 150th birthday, taking advantage of an excellent opportunity to showcase Ottawa's LRT as both a world-class transit system and a world-class attraction.
Once LRT and the downtown tunnel are in place, the number of buses travelling through the downtown core will be cut in half, a reduction of over 2,000 buses off downtown streets a day. With LRT expected to increase transit ridership by an average of nine per cent (thirteen per cent during peak hours) the number of vehicles in the core will be reduced even further. By ensuring that the capacity freed up is dedicated to other mobility needs, this project has the potential to transform our downtown neighbourhoods, making them more pedestrian- and cycle-friendly.
Recognizing this, an important component of planning and implementing LRT in the City will be an urban design study to guide this transformation. This urban design study will help us understand and better plan for the ways the downtown stations will improve not just the way people move through downtown, but how they connect with businesses and other downtown attractions.
This transformation is not just about commuting – it's about reclaiming downtown spaces for people. It’s about recreating the downtown, making it a place with neighbourhoods that are communities, where air is cleaner, and where our public spaces are greener. A downtown where people will want to work, live and play.
By encouraging new employment and residential clusters around stations, the LRT system will also encourage more people to use the system to travel to and from work. This will help the City achieve its ridership, re-urbanization and intensification targets, as well as protect agricultural and environmentally sensitive areas.
Environment and Health Benefits
The LRT project will deliver several environmental benefits. First, by replacing diesel-fuelled bus trips with electric trains, emissions from transit vehicles themselves are reduced. Replacing diesel-fuelled buses with electric LRT means the City will burn 10 million fewer litres of diesel fuel a year. That means not just lower emissions, but lower costs as well. The project is forecasted to reduce carbon dioxide emissions by approximately 94,000 tonnes in 2031. It will also reduce criteria air contaminant emissions by approximately 4,600 tonnes in the same year. The Net Present Value (NPV) of these reductions is approximately $36 million.
Second, and more significantly, trips made by car are replaced by transit trips, resulting in a substantial reduction in greenhouse gas emissions per passenger-kilometre. That's because LRT will increase public transit ridership by offering speed, comfort, convenience, and reliability.
An additional environmental benefit will come from the reduced need for road salt along the converted Transitway in the winter months. Each year, LRT will reduce the City’s road salt usage by 5,600 tonnes, improving water and soil conditions for healthier vegetation and wildlife.
The OLRT project will allow for improved travel from many parts of the City, speeding journey times into and out of the core. The stations in the core will provide a similar level of service as the existing Transitway, with improved connections to the ByWard Market, north Elgin Street, LeBreton Flats and services to Gatineau. The reductions in bus service through the core will also allow for local routes to better accommodate demand and connect to all points in the core.
Transit Oriented Development (TOD) Opportunities
A study on LRT for the City of Hamilton, which reviewed the experience of cities around the world, found that investment in rapid transit can have a positive impact on property values in the general area of a new rapid transit line and especially in areas that are close to transit stations. The study also found that the type of rapid transit makes a difference. The positive impact on property values is higher for rail systems than any other transit mode.
For example, the study shows that having an LRT station nearby can add as much as six per cent to the value of residential properties in the area. The value of commercial properties near LRT stations can increase by as much as 14 per cent. The value is similar to one derived from studies undertaken in support of the North-South LRT project.
Council recently directed staff to undertake six transit-oriented development plans within this term of Council. Of the six stations east of Campus—Lees, Hurdman, Train (VIA), St. Laurent, Cyrville and Blair—none has any form of community planning. Unlike the rapid transit stations west of downtown, which are located within pre-1950s neighbourhoods, the six stations to the east represent post-1950s development and are generally low-density in nature, and can be described as part of Ottawa’s inner suburban area, within the existing Greenbelt. Despite this commonality, and the fact that each has an existing bus rapid transit station, the six are very different from each other. Transit-oriented development plans will be a new planning tool and will focus exclusively on how to build transit-supportive density and employment in and around the transit stations. In consultation with the community and landowners, the zoning of properties within the area surrounding the stations will be reviewed to determine appropriate sites to promote residential intensification and mixed use development. In addition, pedestrian and cycling networks will be reviewed to ensure that they support direct linkages to the stations. The Lees, Train (VIA) and St. Laurent station plans are to commence in 2011, with the Hurdman, Blair, and Cyrville plans to follow.
Transit-oriented development plans will not be undertaken for the downtown stations as detailed planning studies have been conducted as part of the Downtown Ottawa Urban Design Study initiative (DOUDS). The stations to the west of the downtown have also had a level of community planning done in the form of the West Wellington Community Design Plan and the soon to be completed Carling-Bayview Community Design Plan.
With the removal of bus traffic on Albert and Slater Streets there is an opportunity to review the traffic patterns in the downtown core. Furthermore, building upon the work completed in the Ottawa Cycling Plan, the Pedestrian Plan, and the results of the Laurier Avenue segregated cycling lane pilot project, the cycling and pedestrian networks in the downtown core will also be reviewed to determine whether there are new opportunities to improve mobility and streetscaping. This work will be undertaken through the Downtown Ottawa Mobility Overlay study and will be completed by 2013. These initiatives are supported and referenced in the Corporate Planning Framework that will be considered by Council in July 2011.
Three matters discussed in this report bear specific legal commentary: (i) the status and nature of the contribution agreements to be settled with the Federal and Provincial funding partners; (ii) the proposed approach in respect of the issuance of the request for proposals and the evaluation and selection of the preferred proponent thereunder; and (iii) the City’s continued use of advisors during the negotiation and finalization of the contribution agreements to be negotiated with the Federal and Provincial funding partners and the development, issuance and evaluation under the request for proposals.
Approvals-in-principle for financial contributions towards the OLRT project from each of the Federal Government and the Province of Ontario were received in 2011. Discussions remain on-going with respect to the formal contribution agreements to be negotiated with the Federal and Provincial funding partners. As previously reported to Council, it is anticipated that the Provincial contribution agreement will be completed by the end of July, 2011 and that the Federal contribution agreement will be completed in the first quarter of 2012, following final approval of the project by Treasury Board in the Fall of 2011. Council’s approval for the City to enter into the Federal and Provincial contribution agreements will be sought upon their completion.
As formal contribution agreements have not yet been entered into, it should be noted that:
· Receipt of the Federal and Provincial contributions towards the OLRT project is dependent on entering into the formal contribution agreements
· Although the approvals-in-principle set out terms and conditions applicable to receipt of the Federal and Provincial contributions, all terms and conditions will be as set out in the respective formal contribution agreements
· The formal contribution agreements will include terms and conditions to be fulfilled and/or maintained on an on-going basis as conditions to receiving funding, including as set out in the approvals-in-principle
Request for Proposals Process
Although authority with respect to the issuance and evaluation of submissions under the request for proposals process has been sought, additional reports concerning the request for proposals process may be made to Council in advance of or following its issuance as staff further develops and defines the process. These reports may be for the information of, or request action by, Council.
Involvement of Professional Advisors
As previously described to Council, the City has engaged a number of professional advisors to assist with the OLRT project, including in the areas of preliminary engineering, public-private partnerships and procurement, financial matters and legal matters. The City and the Rail Office anticipate continuing to use the expertise of these persons in respect of the matters described in this report, including the negotiation of contribution agreements with the Federal and Provincial funding partners, the preparation and issuance of the request for proposals and the preparation and negotiation of the project and maintenance agreements for the OLRT project.
The Long Range Financial Plan - Transit review prepared by the City Treasurer lays out a comprehensive affordability analysis covering the OLRT project and subsequent phases of the move to light rail in Ottawa. That report, prepared with the assistance of Price Waterhouse Coopers, goes beyond past efforts before embarking on light rail projects. The timeframe has been expanded to 2048 from the traditional 10 year affordability envelope. In addition the affordability of operating the new combined system has been built into the modeling to ensure affordability within the transit envelope and conservative affordability assumptions.
The City will present output specifications and 30% designs as a basis for a $2.1 billion project, including adjustments accounting for inflation over the construction period, which can be achieved using the new alignment and approach. This budget is funded in the amount of $600 million committed by the Government of Canada. The Province of Ontario will also provide $600 million in funding for a total senior government contribution of $1.2 billion. The City share will be funded from savings from reduced bus service hours, existing transit capital contributions, gas tax revenue and development charge revenues. The Long Range Financial Outlook shows that the City is able to provide its share of the final costs of Phase 1, increment 1 as described in this report, along with the balance of the capital demands projected in the current long-range transit plans as fully examined by the Treasurer and Deputy City Manager, Infrastructure Services and Community Sustainability.
The recommendations contained herein directly and indirectly support the following objectives of the Corporate Planning Framework:
EP1 Promote Ottawa globally
EP3 Support growth of local economy
TM1 Ensure sustainable transit services
TM2 Maximize density in and around transit stations
TM3 Provide infrastructure to support mobility choices
TM4 Promote alternative mobility choices
ES3 Reduce environmental impact
HC1 Achieve equity and inclusion for an aging and diverse population
SE2 Improve operational performance
GP1 Improve the public’s confidence in and satisfaction with the way Council works
FS1 Align strategic priorities to Council’s tax and user fee targets
FS2 Maintain and enhance the City’s financial position
Following Committee and Council approval of the recommendations contained herein, the Rail Implementation office will undertake the following:
1) Implement the OLRT project as outlined in the report.
2) Procure the OLRT project as a Design Build Finance Maintain project
3) Engage Infrastructure Ontario as the Commercial Procurement Lead for the OLRT project.
 The Alternative Financing and Procurement (AFP) is similar to private public partnerships (p3) used in other jurisdictions.