Ottawa to issue Notice of Default to Confederation Line contractor Rideau Transit Group

The city of Ottawa, Ontario, will issue a Notice of Default to Rideau Transit Group, the company responsible for maintaining the Confederation Line, following direction from City Council. This escalation of the city’s legal rights is in response to Rideau Transit Group’s failure to address significant issues with train and station availability, and the multiple failures that have continued across the light-rail transit system since the start of the service. There will be no interruption to rail service, and the city and municipal taxpayers are protected under the Project Agreement.

A Notice of Default is a contractual notice advising Rideau Transit Group that it is in default of its obligations under the contract. Rideau Transit Group then has an opportunity to remedy those defaults. This is a strong tool in the contract available to the City.

“This is a strong escalation of the city’s legal rights under the Project Agreement,” said Ottawa Mayor Jim Watson. “We signed a contract for a reliable system to support our city’s high transit ridership of 10,000 people per hour per direction – and to support our future ridership growth. The acceptable levels of service and reliability are detailed in our contract with RTG, but they are not being met.”

Rideau Transit Group is a general partnership formed by ACS RTG Partner Inc., SNC RTG Partner Inc. and Ellis Don RTG Partner Inc. Under the Project Agreement, Rideau Transit Group is responsible for the design, construction and maintenance of the Confederation Line, including the vehicles and stations.

The city is also asking RTG to take a much more active role in compelling its key sub-contractors – including Alstom – to improve their performance on an urgent basis.

“I firmly support the city’s decision to use every tool available in a very solid Project Agreement to secure better LRT service for our transit customers,” said Councillor Allan Hubley, Chair of the Transit Commission.

Since the system was launched in September 2019, there have been considerable failures on the Confederation Line. In response, the city has taken numerous actions to push Rideau Transit Group to address the issues that lead to these continued failures:

• The city has not paid the monthly service payment since October 2019.
• The city brought in British rail consulting firm JBA Corporation to increase monitoring given Rideau Transit Group’s poor performance and the need for a higher level of technical expertise. Rideau Transit Group then retained JBA Corporation directly.
• The city and the city’s consultants have been actively participating in the technical reviews with RTG in order to provide them with operational support and feedback to resolve their issues.
• The city has placed RTG on notice regarding exercising remedial rights due to persistent performance failures on the system.
• A working group has had several meetings and discussions about the problems with Rideau Transit Group’s system for tracking performance metrics.
• The city has delivered contractual notices in relation to these performance metrics, the lack of availability of the system, and the compromise to the reputation of the city and the project.

“We have been taking actions against RTG for months in an effort to have them resolve the issues on the Confederation Line,” said City Manager Steve Kanellakos. “We are not seeing the improvements that we expect to see six months after the launch of this system. Through Council’s direction, we will use this Notice of Default to ensure they resolve the issues that have significantly affected residents.”

Council directed staff to prepare and deliver a Notice of Default to Rideau Transit Group that will require Rideau Transit Group to provide a plan and schedule by March 31, 2020, that will set out how Rideau Transit Group intends to fix these ongoing issues. Council also delegated authority to the City Manager to take any other actions required under the Project Agreement to give effect to Council’s decision. Staff will report back to Council at its meeting on Wednesday, April 8.

Source: City of Ottawa, Ontario