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Staff recommend GrandLinq as the preferred team for ION Stage 1 LRT

Waterloo Region – After a thorough and comprehensive evaluation of the three proposals, Region staff have recommended the GrandLinq team to Council as the preferred team to design, build, finance, operate and maintain (DBFOM) ION Stage 1 light rail transit (LRT).

The team, made up of leading international organizations such as Plenary, Meridiam, Aecon, Kiewit and Keolis, submitted a proposal that satisfies the Region’s overall budget to implement ION Stage 1 LRT. The proposal also remains within the approved funding for operations and maintenance.

“This is an exciting and critical next step as we prepare to launch ION LRT in 2017,” said Darshpreet Bhatti, Director of Rapid Transit. “From a staff perspective, we are very satisfied with the recommendation. It is within budget and will allow us to deliver ION on-time to the community.”

Link to Report: http://bit.ly/1bSLZxh

Highlights of the proposal include:

·         The capital cost of the GrandLinq proposal is consistent with the capital cost estimate, and can be accommodated within the ION project capital budget of $818 million.

·         Projected operating, maintenance, lifecycle and financing costs can all be accommodated within the Region’s approved funding strategy.

·         Based on the GrandLinq proposal, the rapid transit project remains on-time, on‑budget and the costs remain affordable based on the Region’s approved funding strategy.


GrandLinq’s total capital cost is $593 million, including net HST. This includes $532 million funded from the LRT project budget of $818 million and $61 million from intersecting Public Infrastructure Works projects. The intersecting projects are being completed as part of the GrandLinq proposal, but are being funded from sources other than ION. These projects were planned and budgeted for and would have been implemented regardless of ION. For example: King Street and Northfield Drive rehabilitation and reconstruction; underpass on King Street and the railway crossing near Victoria; and, the rehabilitation and reconstruction of King Street (Victoria Street to Union Street).

GrandLinq’s annual operations and maintenance cost for 30 years includes: operations ($4 million, plus HST and inflation); maintenance ($4.5 million, plus HST and inflation); lifecycle (average $8.7 million, plus HST and inflation); financing ($11 million, plus HST); and, insurance ($1.7 million, plus applicable taxes). Operations and maintenance, financing, lifecycle and Region costs (electricity, project office, etc.) will be funded by transit fare revenue and the 1.2 per cent tax increase (2012-18) approved by Council in 2011. The 1.2 per cent property tax increase is being offset by other property tax reductions.  As a result, the annual net property tax increase for ION will be an average of 0.7 per cent, approximately $11 per year on the average household.

Pending Council’s approval, the final Project Agreement with GrandLinq will be completed by the end of April and construction will begin shortly thereafter.

All three levels of government have announced funding commitments for Stage 1 ION, including $300 million from the Province, one-third of the eligible costs up to $265 million from the Federal government and $253 million from the Region.

In February 2012, Regional Council approved the implementation of rapid transit through a DBFOM public-private partnership. This approach was selected because it provided the best balance of Regional control and ownership, while transferring appropriate risks to the private sector. It also allowed the Region to take advantage of private sector innovation and provided the greatest assurance for completing the project on-time and within budget.

In the Region’s DBFOM contract, the Region of Waterloo will own the ION LRT system, including all infrastructure and vehicles; set fares and the frequency of the service; be responsible for customer service and system-wide integration; collect all fare revenue; and, monitor the performance of GrandLinq to ensure all service requirements are being met. 

GrandLinq will take ION Stage 1 LRT to final design; build ION Stage 1 LRT; and, operate and maintain the ION LRT service between Kitchener and Waterloo, consistent with the Region’s performance requirements.

ION, the Region’s rapid transit service, is a bold and visionary plan focused on protecting farmland and environmentally-sensitive areas, limiting urban sprawl and moving people in and around the community.

Implemented in two stages, ION features a 19 kilometre LRT route from the transit terminal at Conestoga Mall in Waterloo to the transit terminal at Fairview Park Mall in Kitchener. Stage 1 also includes a 17 kilometre route of adapted bus rapid transit (aBRT) from Fairview Park Mall to the Ainslie Street Terminal in Cambridge. The aBRT service is expected to begin operating in 2015, while LRT will start in 2017. Stage 2 will see the Region convert the aBRT line to LRT, creating a seamless 37 kilometre ION system between Cambridge and Waterloo.

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For more information please contact:

Bryan Stortz,
Director, Corporate Communications, 519-575-4408 bstortz@regionofwaterloo.ca

Kimberly Moser, Manager, Rapid Transit Community Relations, 519-575-4757, ext. 3461 kmoser@regionofwaterloo.ca

 

BACKGROUNDER

 Preferred team recommended to Council for ION Stage 1 LRT

After a comprehensive evaluation process of the three proposals, Region staff have recommended the GrandLinq team to Council as the preferred team to design, build, finance, operate and maintain (DBFOM) ION Stage 1 light rail transit (LRT) in Waterloo Region. GrandLinq brings world-class experience and expertise to the implementation of ION.

Proposal highlights

·         The capital cost of the GrandLinq proposal is consistent with the capital cost estimate, and can be accommodated within the ION project capital budget of $818 million.

·         GrandLinq’s projected operating, maintenance, lifecycle and financing costs can all be accommodated within the Region’s approved funding strategy.

·         Based on the GrandLinq proposal, the rapid transit project remains on-time, on‑budget and the costs remain affordable based on the Region’s approved funding strategy.

 ·         ION Stops: overall design places strong emphasis on connections and integration with the surrounding communities and future development.

 ·         Operations and Maintenance Facility: design takes into account the initial system requirements and accommodates future expansion.

 ·         Planning and Construction: will focus on having the system in operation as early as possible while minimizing traffic impacts during construction; will strategically schedule construction to avoid disruption during major events and festivals; will avoid working on major routes in both Kitchener and Waterloo at the same time.

 ·         Operations: passenger-focused operations approach will ensure that the needs of transit users are recognized at every level. The needs of transit users will also be the catalyst by which operational activities are developed and implemented.

Overview of GrandLinq key members

Plenary: one of Canada's largest Public-Private Partnership (P3) developers.

o   Sample project: Gold Coast Rapid Transit, Australia (DBFOM), $1.07 billion.

 Meridiam: a major international infrastructure investor.

o   Sample project: Montpellier High Speed Rail, France (DBFM), $2.32 billion.

 Aecon: Canada's largest publicly traded construction company.

o   Sample project: Highway 407 ETR, Toronto (DBFOM), $2.5 billion.

o   Aecon has a local office in Waterloo Region.

 Kiewit: one of North America’s largest construction, mining and engineering firms.

o   Sample projects: Mid-town Tunnel, New York (DBFOM), $2.9 billion.

o   Kiewit has a local office in Waterloo Region.

 Keolis: a world leader in public transportation operations.

o   Sample project: Gold Coast Rapid Transit, Australia (DBFOM) $1.07 billion.

 Costs

There are two components to the overall cost of ION: capital costs, and operations and maintenance costs.

GrandLinq’s total capital cost is $593 million, including net HST.

·         This includes $532 million funded from the LRT project budget of $818 million and $61 million from intersecting Public Infrastructure Works projects.

·         The intersecting projects are being completed as part of the GrandLinq proposal, but are being funded from sources other than ION. These projects were planned and budgeted for and would have been implemented regardless of ION.

o   For example:

§  King Street and Northfield Drive rehabilitation and reconstruction;

§  Underpass on King Street and the railway crossing near Victoria;

§  Rehabilitation and reconstruction of King Street (Victoria Street to Union Street).

 GrandLinq’s annual operations and maintenance cost for 30 years includes:

·         Operations ($4 million, plus HST and inflation);

·         Maintenance ($4.5 million, plus HST and inflation);

·         Lifecycle (average $8.7 million, plus HST and inflation);

·         Financing ($11 million, plus HST);

·         Insurance ($1.7 million, plus applicable taxes).

·         Operations and maintenance, financing, lifecycle and Region costs (electricity, project office, etc.) will be funded by transit fare revenue and the 1.2 per cent tax increase (2012-18) approved by Council in 2011.

o   The 1.2 per cent property tax increase is being offset by other property tax reductions.

o    As a result, the annual net property tax increase for ION will be an average of 0.7 per cent, approximately $11 per year on the average household.

Overview of evaluation process

  • Numerous Region staff and consultants, including Infrastructure Ontario, Deloitte, Parsons Brinckerhoff and Norton Rose carefully evaluated each of the proposals based on their financial and technical specifications.
  • Infrastructure Ontario and the Fairness Monitor (P1 Consulting) worked closely with the Region to oversee the process, ensuring each proposal was evaluated in a transparent, fair and consistent manner.
  • The team with the highest overall score was selected and is now being recommended to Council as the preferred team.

 Next steps

Pending Council’s approval, the final Project Agreement with GrandLinq will be completed by the end of April and construction will begin shortly thereafter.