The budget for London’s proposed rapid-transit system has gone up by an estimated 10 per cent, to more than $550 million,The Free Press has learned.

Though much of that additional money may never be spent — it’s going into a pumped-up “contingency fund” for unforeseen construction complications — the increase underscores the complexity of what will be the single-biggest project in city history.

Billed at first as a $500-million transit overhaul, the majority of the money is expected to come from the provincial and federal governments, though neither has committed to it.

Queen’s Park, however, is well into its “technical review” of the proposal, and it’s their feedback that led to the budget increase. There are essentially two components to it:

• The cost of electric buses has gone up $200,000 each, to $1 million for each of the 30-plus vehicles. That adds more than $6 million.

• The province wants the city’s contingency fund, originally set at 40 per cent, bumped up to 50 per cent, adding $50 million to the tab.

But that latter amount, the vast majority of the increase, may not ever be spent. It’s believed that provincial officials wanted the contingency fund to cover unexpected costs — contaminated soil, for example — that have cropped up in other cities.

City officials have always said London’s share will be capped at $130 million. That hasn’t changed, meaning Ottawa and Queen’s Park will be expected to cover the extra budget.

One city politician considers the budget increase — coming now, rather than, say, five years into construction — a good sign.

“It’s really important that we have this back-and-forth process to refine the budget at the outset before we start the project for real,” Coun. Jesse Helmer said.

“It’s important to go into these things with a realistic sense of what things are going to cost.”

Rapid transit is essentially a bus system that will move more people more quickly across London.

Last spring, city council approved a plan that would run high-frequency buses along L- and 7-shaped corridors bisecting London, with downtown as the hub. The corridors would run north to Masonville Place; east to Fanshawe College; south to White Oaks Mall; and west to Wonderland Road/Oxford Street.

The system would span 24 kilometres in total, with regular bus routes serving as feeders to the main corridors.

The proposed location of the east corridor has sparked debate in Old East Village. A preliminary design released earlier this month said the stretch of Dundas Street in Old East is too narrow to accommodate rapid transit. Two options are in play: having east- and westbound buses on King Street or having eastbound buses on Dundas and westbound buses on King.

City officials have applied to the provincial and federal governments for what will be more than $400 million in funding to build the system. The applications are still under review.

pmaloney@postmedia.com

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THE BOTTOM LINE

The budget for London’s rapid transit system has ballooned by more than $50 million before construction has even begun. Here’s what’s causing the increase:

The price of the model of electric bus the city plans to buy has increased by $200,000 for an overall $6 million hike for 30+ buses.

The contingency fund has increased $50 million.