TTC woes: Toronto-York Spadina subway extension $550 million over budget

Already riddled with delays and increasing costs, the Toronto-York Spadina subway extension is $550 million over budget, the TTC said Friday.

CityNews learned that of the $550 million, $400 million is for contractor claims and $150 million was used to reset the project last year and hire a new contractor.

To pay for the cost overrun, Toronto will have to come up with $240 million, while York Region has to dish out $160 million, the TTC said in a report released on Friday. The breakdown is in keeping with the 60-40 funding agreement. It’s not yet clear who is on the hook for the remaining $150 million.

The extension was originally pegged at $1.5 billion and later jumped to $2.6 billion. The cost has now ballooned to $3.184 billion.

According to the report, staff said the increased cost is to cover claims by contractors. And TTC CEO Andy Byford said there could be more claims in the future.

“Can I say with certainty that figure won’t change? No. It could come in less than $400 million, certainly that’s what we’re aiming to achieve,” Byford told reporters outside Davisville Station on Friday.

However, Byford said he can’t guarantee whether or not the costs would increase further.

“I am confident in the figure of $400 million. I cannot say with absolute certainty it could not exceed that,” he said.

 

The six-station, 8.6-kilometre extension of the TTC’s Line 1 (Yonge-University-Spadina) will extend from Downsview Station north, through York University, and into Vaughan.

The subway expansion is being funded by federal and provincial governments, the city and York Region. The province has already contributed $870 million and Ottawa, $697 million.

TTC Chair Josh Cole said he has launched an independent review of the TTC capital program.

“Every dollar in claims is a dollar that isn’t used to improve the daily commute of the people of Toronto,” he said in a statement.

Last spring, the opening date of the extension was pushed back one year to Dec. 31, 2017, with an estimated budget increase of $150 million.

Byford then fired two senior employees amid the cost overruns and delays.

In March of last year, a TTC report recommended a comprehensive project “reset” involving a new third-party project manager.

On Friday, Byford said the problems with the Toronto-York Spadina subway extension are not solely the TTC’s fault, and that lessons will be learned from this project.

“It would be simplistic and wrong to just put it down to the TTC. I think we need to look back at what were the root causes of this. It was not of the TTC’s making that there were all the [federal funding] delays at the start,” he said.

He said one of the root causes of the delay is when the TTC agreed to the design-bid-build model back in 2007-2008.

“To get more certainty, design-build buys you that certainty because any cost overruns would typically be at the risk of the contractor. The balance though is that you often pay extra to get that certainty.”

But there is light at the end of the tunnel: Byford said the project is 80 per cent done.

“The track is virtually all in, the tunnels were completed back in 2013. The six stations are well advanced. The end date of December 2017 remains on track,” he said.