Increasingly unpopular, the Quebec tramway project has never seemed so fragile. But with hundreds of millions already invested and the signing of a $569 million contract with Alstom, is it too late to throw it overboard as some are calling for? And above all, what would be the price of such a withdrawal?
The polls are enough to sow concern among tramway fans. Support for the latter has been stagnating around 40% in the polls for a long time. The most recent survey, carried out for The sun — with a small statistical sample, by the pollster’s own admission — even showed a favorable opinion falling to 32%.
The day after the CAQ defeat in Jean-Talon, the mayor of Quebec, Bruno Marchand, wanted to issue a warning: abandoning the tram would amount to tarnishing the reputation of Quebec, aggravating future congestion problems and turning the back of the billions promised by Ottawa.
“If this money does not come for the tramway, it will go to other cities in Quebec or it will go to other cities in Canada. Are we able to say today: “No, don’t come and invest in our region, I would prefer that my tax money go to Toronto”? asked the mayor. Certainly not. »
The “Vietnam of public administrations”
Support for the project declines as the bill climbs. The contract awarded to Alstom for the manufacture of the trains exceeded the initial evaluation by 43%. At this rate, the tramway, first estimated at 3.3 billion, then increased for the first time by 600 million, would cost 5.5 billion dollars to build. An estimate considered modest by many observers of the file.
In the eyes of the most virulent detractors, these excesses are enough to nail the coffin of the tramway. Internationally, however, similar additional costs are the norm rather than the exception. “Average cost overruns for megaprojects are between 200% and 300%,” explains Yvan Petit, professor in the Department of Management at UQAM, citing the work of Bent Flyvbjerg, world authority on the subject and professor. at the University of Oxford.
The population of Quebec can console themselves by comparing themselves: the extension of the orange line to Laval incurred an additional cost of 160%, the federal firearms registry exceeded the initial estimate by 590%, and the Olympic Games in Montreal spent 1300% more than the initial budget. These Canadian examples are echoed in a long history of cost overruns that spare no country.
Despite megaprojects’ habit of inflating their initial bill, they tend to survive cost overruns and popular discontent. These are the “Vietnams of public administrations”, illustrated Richard White, professor of history emeritus at Stanford University in California, in the pages of New York Times in 2012. They are “easy to start, but difficult and expensive to stop”.
Twelve times more money spent than for the tunnel
However, it is possible to put a mega construction site on the side track. In Quebec, some people learned this painfully when the government drew a line under the third link. However, planning the tunnel cost taxpayers $28 million. The capital, for its part, has already spent 12 times this total, or more than $341 million, to plan and prepare the site. This sum represents a third of the budget authorized for the construction of the tramway, which reached $926 million at the end of 2022.
According to the directive on the sound management of major public infrastructure projects, the government must decide at four stages of a project: at the preliminary project, at the submission of the opportunity file, at the submission of the business file and even once the production phase has started.
The tramway has to wait for the third stage: the approval, by the Council of Ministers, of the business file submitted in July. The decision, first expected in October, will be delayed due to a deadline given to the consortia competing to win the infrastructure contract.
“Normally,” explains Yvan Petit, “that’s where the biggest decision is made, because that’s also where the money really starts to come out. »
Uncertainty about the invoice
Is the City exposed to a lawsuit from Alstom if the tramway is abandoned? No, indicates the municipal administration, since the contract “contains the usual termination clauses for this type of project, adjustable over time”.
The French company confirms that “all over the world, contracts of the same type as that of the Quebec tramway project provide clauses to cover any eventuality linked to the development of the project”.
In the case of the tramway, three major contracts are at stake. In addition to the infrastructure contract, which has not yet been awarded, there are two others: a first, awarded to the firm CSIT, for the network operating system , worth $56 million; and a second, given to Alstom, for rolling stock.
The call for proposals documents provide for the payment of maximum compensation of $14 million to consortia currently bidding to win the infrastructure contract. As two groups are in the running, the maximum compensation would be 28 million.
As for the compensation that the City owes Alstom, it is less clear. She only paid 5 million out of the 569 million provided for in the contract. Government approval remains necessary before launching the train manufacturing phase. The duty was unable to consult the clauses of the agreement which concern compensation in the event of cancellation. According to an expert, in the majority of cases, compensation depends on what has already been spent since signing the contract. Here the contract was signed in April.
“Since the signing of these contracts is quite recent, the costs to be reimbursed are likely to mainly affect the plans, so they will not cost too much,” says Gabriel Jobidon, professor in the Department of Construction Engineering at the École de Technologie Supérieure.
Joined by The duty, the Alstom spokesperson would not say the amount of funds the company has committed to the project. “The question of costs which belong to Alstom is of a commercial nature, therefore confidential,” indicated Adrien Vernhes in writing.
As for the consortium which obtained the second contract, CSIT, it did not respond to our request.