Report of the Ottawa Light Rail Transit Public Inquiry

664 Pages·2022·9.674 MB·English

by  Hourigan, William

Report of the
Ottawa Light
Rail Transit
Public Inquiry
Final Report
November 2022
The Honourable William Hourigan
Commissioner
ottawalrtpublicinquiry.ca
enquetepubliquesurletlrdottawa.ca

The Honourable Justice C. William Hourigan, L’honorable juge C. William Hourigan,

Commissioner commissaire ottawalrtpublicinquiry.ca
enquetepubliquesurletlrdottawa.ca

November 30, 2022

The Honourable Caroline Mulroney
ottawalrtpublicinquiry.ca
Minister of Transportation enquetepubliquesurletlrdottawa.ca
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The Honourable Justice C. William Hourigan, L’honorable juge C. William Hourigan,
ThCeTWo hmHiethom H ntihoosiunssro ialoeubntrtlaeeebr r C leI a dCreoalliivrnoeelri n Mtehu eMl rrouenlpreooynr te oyn the Ottawa LL’higochnotom Rramabiills eTs rCaaianrreso itli nPeu bMliuc lrIonnqeuyir y in both
MEningilsistehr aonf dT rFarnesnpcohr. tation
Minister of Transportation Ministre des Transports
7777 7B7a By aSyt rSeetrte, e5tt,h 5fltoh oflro or 777 rue Bay, 5e étage
TorTSooinnrtcooen, rtOeol,ny Ot,a nritoa rio Toronto, Ontario
November 30, 2022
M7M A 71AZ 81Z8 M7A 1Z8

The Honourable Caroline Mulroney
D ear Minister Mulroney:
Minister of Transportation

D7e7a7r MBainyis Stetrre Metu, l5rothn feloyo /r Madame la Ministre Mulroney :
With this letter I deliver the report on the Ottawa Light Rail Transit Public Inquiry in both
Toronto, Ontario
English and French.
WMith7 Ath 1isZ l8e tter I deliver the Report of the Ottawa Light Rail Transit Public Inquiry in both English
C. William Hourigan
an d French.
CSionmcemreislys,i oner
Dear Minister Mulroney:

P ar la présente, je vous prie de bien vouloir recevoir le rapport d’enquête publique sur le réseau

deW tirtahi nth liésg leertt esur rI rdaeill ivde’Or ttthaew rae peonr at nognl athise eOt tetanw fraa Lniçgahist .Rail Transit Public Inquiry in both

English and French.

SSinicnecreerleyl y/ ,C ordialement,

C. William Hourigan

Commissioner

C. William Hourigan
William Hourigan
Commissioner
Commissioner / commissaire
Ottawa Light Rail Transit Commission d’enquête sur le réseau de train léger sur rail
Comm ission d’Ottawa
2 Bloor Street East, Suite 1802 2, rue Bloor Est, bureau 1802
Toronto, ON M4W 1A8 Toronto (Ont.) M4W 1A8
[email protected] [email protected]
Tel: [phone] Tel: [phone]

Ottawa Light Rail Transit Public Inquiry I Final Report ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Ottawa Light Rail Transit Commission d’enquête sur le réseau de train léger sur rail
Comm ission d’Ottawa
2 Bloor Street East, Suite 1802 2, rue Bloor Est, bureau 1802
Toronto, ON M4W 1A8 Toronto (Ont.) M4W 1A8
[email protected] [email protected]
Tel: [phone] Tel: [phone]

Ottawa Light Rail Transit Commission d’enquête sur le réseau de train léger sur rail
Co mm ission d’ Ottawa
2 Bloor Street East, Suite 1802 2, rue Bloor Est, bureau 1802
Toronto, ON M4W 1A8 Toronto (Ont.) M4W 1A8
[email protected] [email protected]
Tel: [phone] Tel: [phone]
Report of the
Ottawa Light
Rail Transit
Public Inquiry
Final Report
November 2022
The Honourable William Hourigan
Commissioner
Ottawa Light Rail Transit Public Inquiry I Final Report ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Copyright © 2022 King’s Printer for Ontario
Report of the Ottawa Light Rail Transit Public Inquiry
Final Report
ISBN 978-1-4868-6351-8 (English) (Print)
ISBN 978-1-4868-6352-5 (English) (PDF)
ISBN 978-1-4868-6355-6 (French) (Print)
ISBN 978-1-4868-6356-3 (French) (PDF)
Report of the Ottawa Light Rail Transit Public Inquiry
Executive Summary and Recommendations
ISBN 978-1-4868-6353-2 (English) (Print)
ISBN 978-1-4868-6354-9 (English) (PDF)
ISBN 978-1-4868-6357-0 (French) (Print)
ISBN 978-1-4868-6358-7 (French) (PDF)
This report is available at ottawalrtpublicinquiry.ca (English)
and enquetepubliquesurletlrdottawa.ca (French).
Ottawa Light Rail Transit Public Inquiry I Final Report ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Contents
Acknowledgements .........................................................................................xxv
Table of Abbreviations ...................................................................................xxvi
Chapter 1
Executive Summary .................................................................1
1.1 Project Delivery Model .............................................................................5
1.2 Bidding Process ........................................................................................8
1.3 Contractual Arrangements .......................................................................9
1.4 Unproven Design .....................................................................................10
1.5 Inexperience ............................................................................................11
1.6 Project Delays ..........................................................................................12
1.7 The Relationship between RTG and the City ........................................14
1.8 City Governance Prior to Trial Running Testing ...................................16
1.9 Testing and Commissioning ...................................................................17
1.10 Substantial Completion ..........................................................................18
1.11 Trial Running Testing and Vehicle Reductions .....................................19
1.12 City Governance during Trial Running Testing ....................................21
1.13 System Opening and Problems .............................................................23
1.14 Derailments and Safety ...........................................................................25
1.15 Conclusion ...............................................................................................28
Ottawa Light Rail Transit Public Inquiry I Final Report ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
vi
Chapter 2
Timeline of Key Events ..........................................................30
Chapter Contents ..............................................................................................31
2.0 Introduction .............................................................................................32
2.1 B ackground: The Transportation Master Plan, Funding,
and Preliminary Engineering (2006–2010) ............................................33
2.2 P rocurement: The RFP Process and Selection of Rideau
Transit Group (2010–2013) ......................................................................35
2.3 C onstruction and Manufacturing: Delays and the Rideau
Street Sinkhole (2013–2018) ...................................................................38
2.4 H andover: Substantial Completion, Trial Running,
and Revenue Service Availability (2018–2019) ......................................41
2.5 Public Service: Malfunctions and Derailments (2019–2021) ................43
Chapter 3
The Ottawa Light Rail Transit Project, Stage 1:
Background; Key Roles and Responsibilities ......................44
Overview ............................................................................................................44
Chapter Contents ..............................................................................................45
3.0 Introduction .............................................................................................46
3.1 Overview of OLRT1 .................................................................................47
3.2 The Origins of the OLRT1 Project .........................................................48
3.2.1 The Transitway ............................................................................................48
3.2.2 The O-Train .................................................................................................48
3.2.3 The Cancelled North-South LRT Line .........................................................49
3.2.4 Planning Begins for the OLRT1 ...................................................................50
3.2.5 The 2010 Municipal Election .......................................................................51
Ottawa Light Rail Transit Public Inquiry I Final Report ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
vii
3.3 The City’s Governance Structure for the OLRT1 ..................................52
3.3.1 City Council and the Mayor .........................................................................53
3.3.2 City Manager ..............................................................................................56
3.3.3 City Treasurer ............................................................................................57
3.3.4 Finance and Economic Development Committee .......................................57
3.3.5 Executive Steering Committee ....................................................................58
3.3.6 Rail Implementation Office / O-Train Construction Office ...........................58
3.3.7 OC Transpo and Transportation Services ..................................................59
3.3.8 Regulatory Monitor and Compliance Officer ...............................................60
3.3.9 City Transit Commission .............................................................................60
3.4 Advisors to the City .................................................................................61
3.4.1 Engineering and Technical Advisors............................................................61
3.4.2 Financial and Transactional Advisors ..........................................................62
Notes...................................................................................................................63
Chapter 4
Setting the Budget and Schedule:
Concerns about Interference for Political Reasons ...............64
Key Findings ......................................................................................................64
Chapter Contents ..............................................................................................65
4.0 Introduction .............................................................................................66
4.1 The City’s Planning and Priorities .........................................................68
4.2 Government Funding and Preliminary Engineering .............................70
4.3 Setting the Budget and Schedule ..........................................................72
4.4 Political Pressure on the Budget ...........................................................75
4.5 Conclusions regarding the Budget and Schedule Process ................77
Recommendations ............................................................................................78
Ottawa Light Rail Transit Public Inquiry I Final Report ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
viii
Chapter 5
The Procurement and Delivery Model (2010–2011) ................. 79
Key Findings ......................................................................................................79
Chapter Contents ..............................................................................................80
5.0 Introduction .............................................................................................81
5.1 Public-Sector-Led Procurement Models ...............................................83
5.1.1 Design-Bid-Build ..........................................................................................83
5.1.2 The Design-Build Approach ........................................................................84
5.1.3 Downsides of Traditional Project Delivery Models .......................................85
5.2 Public-Private Partnerships ..................................................................86
5.2.1 Underlying Rationale and History ................................................................87
5.2.2 Advantages and Disadvantages of P3s ......................................................88
5.3 Ottawa Selects a Public-Private Partnership Delivery Model .............92
5.3.1 Deloitte ........................................................................................................92
5.3.2 Factors That Led to a Public-Private Partnership........................................93
5.3.3 Operations and Maintenance in P3s ...........................................................95
5.3.4 The City Formally Adopts the Design-Build-Finance-Maintain Model .........97
5.4 Impact of the Procurement Model ..........................................................98
5.4.1 Risk Transfer ...............................................................................................98
5.4.2 Impact on the City’s Role in the Project and Its Relationship with RTG ......99
5.4.3 Assessment of Impact of the P3 Model ....................................................100
5.5 The Future of Procurement ...................................................................102
5.5.1 Preconceived Models ................................................................................102
5.5.2 Market Innovations ....................................................................................103
5.5.3 Objective Criteria ......................................................................................104
5.6 Conclusion .............................................................................................106
Recommendations ..........................................................................................106
Notes.................................................................................................................107
Ottawa Light Rail Transit Public Inquiry I Final Report ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
ix
Chapter 6
The Procurement (2011–2013) ................................................. 108
Key Findings ....................................................................................................108
Chapter Contents ............................................................................................109
6.0 Introduction ...........................................................................................110
6.1 Overview of the City’s OLRT1 Procurement .......................................112
6.2 The Request for Qualification .............................................................114
6.3 The Request for Proposals ...................................................................117
6.3.1 Overview of the RFP .................................................................................117
6.3.2 Communications during the In-Market Period ...........................................118
6.3.3 Fairness ...................................................................................................119
6.4 The RFP Incentivized Affordability and Risk Transfer .......................121
6.4.1 Affordability Cap .......................................................................................121
6.4.2 Bidders Accept Full Geotechnical Risk .....................................................122
6.5 Vehicle Procurement ............................................................................126
6.5.1 Canadian Content Requirement ................................................................126
6.5.2 The LRV Project-Specific Output Specifications .......................................127
6.5.3 Vehicle Procurement and Pre-qualification Process .................................129
6.6 Negotiation of the Project Agreement .................................................131
6.6.1 Selection of Payment Milestones ..............................................................131
6.6.2 No Bedding-In Period or Soft Start ...........................................................134
6.7 RTG Wins the RFP .................................................................................136
6.7.1 Optimism Bias and Complex Infrastructure Procurement ..........................136
6.7.2 Evaluation Process for the Proposals ........................................................137
6.7.3 RTG Selected as Winner ...........................................................................137
6.8 RTG’s Corporate Structure and Implications for the OLRT1 Project ......139
Recommendations ..........................................................................................140
Notes.................................................................................................................141
Ottawa Light Rail Transit Public Inquiry I Final Report ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
x
Chapter 7
The Project Agreement .......................................................142
Key Findings ....................................................................................................142
Chapter Contents ............................................................................................144
7.0 Introduction ...........................................................................................146
7.1 The Project Agreement: General Structure .........................................147
7.1.1 General Content of the Project Agreement and Its Schedules ...................148
7.1.2 Performance-Based Project Specifications ..............................................150
7.1.3 Variations to the Project Scope ..................................................................151
7.2 Risk Allocation during Construction ...................................................153
7.2.1 Failure to Maintain Schedule .....................................................................153
7.2.2 Delays to Revenue Service Availability ....................................................154
7.2.3 Cost Overruns ...........................................................................................156
7.2.4 Events for Which Relief Could Be Provided ..............................................156
7.2.5 Geotechnical Risk ....................................................................................159
7.3 Progress Reporting and Public Communications ..............................160
7.3.1 Authority over Public Communications about the OLRT1 Project ..............160
7.3.2 Reporting to the City .................................................................................161
7.3.3 The City’s Communications Governance ..................................................162
7.3.4 The One-Sided Communication Challenge ...............................................163
7.4 Payment Mechanisms and Incentives .................................................165
7.4.1 Construction Milestone Payments .............................................................165
7.4.2 Maintenance Term and the Maintenance Payment Mechanism ................167
7.5 Role of the Independent Certifier .........................................................170
7.5.1 The Role Generally ...................................................................................170
7.5.2 Certification Role .......................................................................................171
7.5.3 Dispute Resolution Role ............................................................................172
Ottawa Light Rail Transit Public Inquiry I Final Report ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________