The City of Winnipeg looks set to pay up to $20.4 million for Manitoba Hydro land it once expected to buy for about a quarter of that price.

City council’s property and development committee approved the purchase agreement Tuesday, after the cost rose far above an initial land appraisal of just over $4.6 million.

That’s because Hydro came back with a second appraisal that valued the parcel the city needs to construct the second stage of the Southwest Rapid Transitway at somewhere between $32 million and $34 million.

The divide sparked months of negotiations, since the city can’t expropriate land from Hydro or dictate a price to the Crown corporation.

“Valuation of lands is not a precise science, particularly with corridor lands,” said Winnipeg Transit director Dave Wardrop. ”What we think we landed with here was a fair overall evaluation for those properties.”

Wardrop stressed the project will stay within its overall budget, despite the fact the city budgeted just $16 million for all land acquisitions along the corridor. He said the city managed to find savings elsewhere that will offset the added cost, the details of which would be revealed later this month.

But some city councillors found the price tag “disappointing” and vowed to seek provincial assistance on keeping costs under control.

“There will be some discussions with the provincial government about this and we’ll carry on negotiations with them as well,” said Coun. John Orlikow (River Heights-Fort Garry), who chairs the committee.

Premier Brian Pallister said he wants to avoid acting as a “referee” between the city and a Crown corporation but is open to the discussion.

“If there’s a way we can help and benefit taxpayers at the same time, I’m really open to that question,” said Pallister.

City COO Michael Jack noted the deal requires a relatively quick approval process to ensure summer construction on the route begins on time.

The purchase price could still drop as low as $11.7 million, however, if the city can transfer certain portions of land back to Hydro. But the public service expects only about 40% of the requested land will be available to return, likely leaving the price around $16 million even after land transfers.

Manitoba Hydro declined an interview request Tuesday and noted the proposal still awaits a separate Hydro vote. In an email, spokesman Bruce Owen stressed the deal is both fair and reasonable.

“We have an obligation and a responsibility to our ratepayers to ensure we obtain fair market value for the disposition of any Manitoba Hydro-owned land,” Owen wrote.

The proposal still requires a full council vote.

jpursaga@postmedia.com

Twitter: @pursagawpgsun