Archive for September 10th, 2009

And we thought TransLink had problems – the Ottawa Light Rail Lawsuit.

September 10, 2009

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Plan for light rail – Federal government intrigue – sign contracts – renege on contracts –  the result: a massive lawsuit.

Of course what civic, provincial and federal politicians all seem to forget is that there is one taxpayer and the monies awarded to the plaintiffs would go a long way to help build a light rail network in Ottawa.

From the Ottawa Sun

Light rail lawsuit discussion behind closed doors

By DEREK PUDDICOMBE, City Hall Bureau

City council is ready to offer $36.7 million to settle its outstanding $217-million lawsuit stemming from the north-south light rail plan that was cancelled in 2007.

Councillors and the city solicitor remained silent about the deal after a five-hour closed-door briefing ended Wednesday afternoon.

“I can’t discuss a matter before the court,” said city solicitor Rick O’Connor.

Combined with the money the city has already spent on legal bills defending the cancelled light rail transit project the bill could reach about $40 million.

Council may deal with the settlement offer during an emergency council meeting Friday morning.

Siemens and subcontractor St. Lawrence Cement launched the lawsuit over the cancellation of the $1-billion north-south light rail system they had been contracted to build in April of 2006. In a letter sent to city councillors and staff in February, 2007, Siemens said it was out of pocket about $25 million due to the cancellation.

The settlement would be the equivalent of about an increase of about 4% on property taxes, and one councillor who did not want to be identified said the money may have to come from taxpayers because the city can’t borrow to pay it. An alternative would be to sell off city assets to pay for the settlement.

“I think there could be a special LRT lawsuit levy on the property tax bill,” said the councillor.

If accepted, the city may ask if the $36.7 million can be paid in instalments.

The councillor also suggested that perhaps the money should come from the wards of councillors who voted against the project two years ago.

Innes Coun. Rainer Bloess was the only councillor who spoke after the meeting finished but fell short of mentioning any details of the potential settlement.

“We are all looking forward to some settlement,” he said.

When the city council meeting reconvened at about 6 p.m. council refused to discuss any of the details pertaining to the lawsuit, but staff forgot to take the details of the briefing — including the settlement offer — off the big screen before some reporters noticed the “plaintiff’s” offer.

“I’m glad it’s over, but we didn’t learn anything from this,” said one city councillor.

Since the cancellation, city council has voted in favour of a new $5-billion transit plan, which essentially includes the same north-south route, but won’t see light rail anywhere in the city for at least 10 years.


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