The TTC and Metrolinx are set to square off this morning over disputed costs regarding the future of plans to replace the aging Scarborough rapid transit line.

Both sides are scheduled to meet after disagreeing on costs for the proposal to convert the Scarborough RT to a subway, with the TTC projecting the expenses would be about half as much as the nearly $1-billion estimate Metrolinx has provided.

The disagreement comes as Metrolinx, the provincial agency in charge of expanding GTA transit infrastructure, continues to demand a clear position from the city on whether it wants subways or light rail for the revamped Scarborough RT.

Last week, Metrolinx CEO Bruce McCuaig sent a memo to city manager Joe Pennachetti threatening to stop work on the $1.8-billion SRT changeover to LRT unless the city reaffirms by Aug. 2 that it's committed to the project.

The confusion arose after city councillors voted in a 35-to-9 decision last May in favour of subways, contradicting their decision last fall for light rail.

TTC says $500M versus $923M

The city now says that the subway proposal — in which Bloor-Danforth line would be extended to Scarborough Centre and Sheppard Avenue — would cost $2.3 billion. The TTC argues that's just $500 million more than the light rail plan; Metrolinx says the additional costs would actually mean an extra $923 million.

In an interview Tuesday with CBC Radio's Matt Galloway on Metro Morning, McCuaig said there were two main points he's hoping to hash out during his meeting with TTC CEO Andy Byford.

City councillor Gord Perks has come out in favour of the existing LRT plan and says council should stop debating a matter that has already been signed and finalized. (CBC)

"One is we want to get the focus on the real question that's on the table, which is we need clarity on how to move forward — LRT versus subway?" he said. "The second thing is, everybody needs to come out and have the same information, the same agreement on what the cost differences are between the two alternatives."

Byford has said he would prefer a subway-extension plan if the money is available, but he disputed the Metrolinx estimates that affix a $320-million price tag to renovating Kennedy subway station in order to make it subway-compatible.

Byford's meeting today with Metrolinx is intended to clarify how both sides calculated their cost estimates.

McCuaig told Metro Morning that the TTC is understimating the magnitude of already-incurred "sunk costs" associated with transferring an LRT plan to a subway project.

According to McCuaig, those expenses include:

About $85 million already spent on the LRT project that can't be recovered.

Renegotiation of a signed contract with Bombardier to deliver 48 vehicles for the Scarborough project.

A redesign of the Kennedy subway station to make it compatible with a subway extension.

A capital investment of $60 million to maintain the SRT for about five years.

Dismantling the existing elevated LRT line that would no longer be used for a subway.

"I think [city councillors] need to be aware of what all the costs are, and I think the TTC staff report they were reviewing in January talked about what is the capital construction costs of a subway itself, as opposed to looking at what are some of the sunk costs and some of those other costs that I identified," McCuaig said.

In the mean time, Coun. Gord Perks wants the LRT and thinks arguing subway estimates is a waste of time.

"My colleagues are going to have to smarten up and realize that they've got one option only, and that's to take the signed agreement, get the light-rail system built and stop chasing a subway that no one has the money to build," Perks said.

Scarborough subway a 'guarantee'

But city councillor Glenn De Baeremaeker, who represents one of two Scarborough Centre wards, begs to differ.

He considers the letter from McCuaig to actually be a positive sign that the province is seriously considering the switch over to subways.

"This letter is proof positive that they're taking our request seriously, they're now going right in to the dotting of the I's and crossing of the T's and asking us cost implications," he said.

On the matter of the disputed $320 million quoted by Metrolinx for renovating Kennedy station, De Baeremaeker said it really shouldn't be considered an "additional cost" at all.

"They have to redesign the Kennedy subway station anyway, whether you build an LRT or a subway, it doesn't matter," he argued. "You have to rebuild the Kennedy subway station and it's going to cost you X amount of dollars."

"That's not an additional cost because you would have had to pay it anyway," he added.

One way or another, De Baeremaeker promised his constituents a Scarborough subway was a sure thing.

"What we're asking for in Scarborough is to have only the same level of service that other people in the city already enjoy," De Baeremaeker said.

"What I can guarantee every person living in Scarborough is that there is going to be a Scarborough subway."