WATERLOO REGION — The GrandLinq consortium has been paid $570 million as of the end of June for building the Region of Waterloo's light rail system, about $38 million more than the consortium bid on the project.

"Even with the delay costs associated with the vehicle delay, we're fairly confident that we're going to come in within the budget and that our funding plan is going to be sufficient," Coun. Tom Galloway said.

The most recent payment to GrandLinq was for $27 million, not including HST. That was a payment for substantial completion once the system got up and running June 21.

The $570 million includes a settlement of $28.1 million related to project delays and other issues. That settlement was for issues up to February 2017.

It also includes $24.6 million paid to GrandLinq for vehicle delays.

GrandLinq bid $532 million to build the system, falling within an original $818-million budget that also paid for express buses to Cambridge, consultants, land and other costs of the project.

That budget was increased to $868 million at the end of 2017 because of delays related to the late arrival of trains from Bombardier. The region and province each committed an extra $25 million to make up the $50-million difference.

Galloway said the region deliberately set a small contingency.

Similar projects would see a contingency of six to eight per cent of the budget.

"Contractors have a way of eating up all the contingency when they see it sitting there, so we purposely went into the project with a very small contingency knowing that there was a good chance that a few years later we were going to have to increase it," Galloway said.

At the time of the budget increase, regional documents showed the projected cost of light rail was $786.1 million at financial close in 2014. That's when the deal with GrandLinq was locked in.

The cost of light rail was listed as having increased to $853.7 million, up $67.6 million.

Regional chief financial officer Craig Dyer said the $786.1 million should have included the $12.4-million contingency for the project, bringing the projected cost in 2014 to $798.5 million.

Another $5.2 million in savings from express buses lined up the increased cost with the region's $868-million projection.

Dyer said that of the region's $868-million budget for light rail and express buses to Cambridge, $809 million had been spent by the end of June.

He's confident the project will fall within budget.

"Our expectation is that we will remain within the $868-million budget and within the overall funding model," Dyer said.

What's left of the budget will be paid to GrandLinq, to Bombardier for vehicles and to wrap up land acquisitions related to the project.

Payments for design and construction started in the spring of 2015. The first payment was for about $298,000 and the second was about $6 million.

No payments were made until the consortium spent $131 million. That was considered the region's insurance to ensure the consortium did a good job and completed the project. The $131 million is being paid back to GrandLinq over the course of the 30-year contract.

The region's partnership with GrandLinq is a 30-year contract for the consortium to design, build, finance, operate and maintain the system.

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The cost to design, build, finance, operate and maintain the LRT system is pegged at $1.9 billion over 30 years.

Payments were made to the consortium month-to-month as work was completed.

The original timeline for the project to be completed was 2017 but lengthy delays were blamed on Bombardier's inability to deliver the region's light rail vehicles on time.

Since 2011, the owner of an average home has paid $969 in taxes to help launch trains and expand the bus system to feed them. This includes $597 dedicated to trains, according to regional figures.

This assumes a total increase in regional taxes reaching almost 13 per cent on a home assessed at $344,000 this year.

Regional government has been taxing residents annually since 2011 for the rapid transit system, which includes light rail transit and express buses. Next year will be the final tax increase of 0.4 per cent.

pdesmond@therecord.com

Twitter: @DesmondRecord

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