Calgary city council heard Tuesday the Green Line LRT project will cost a minimum of $2.1 billion once the project has wound down.
That includes the estimated $850 million cost of discontinuing the project, on top of roughly $1.3 billion already spent.
Green Line CEO Darshpreet Bhatti said in Tuesday’s council meeting that it may end up costing more than $850 million for ceasing the project considering there are several unknown factors at play.
City officials say there is no alternative to a wind-down at this time due to the financial risks for the city.
Winding down the project includes dissolving the Green Line board as well as dealing with ongoing construction contracts the city has entered into, among other items.
Officials said the city plans to work with the province so that it is made whole for direct and indirect costs related to the transit project that it has already incurred.
The wind-down will have far-reaching effects on the city’s budget if the government of Alberta does not provide financial assistance, council heard.
While the plan is not set in stone, the wind-down is expected to be completed by the end of the year, and another update from the city is anticipated in January 2025.
City officials also said Calgary may be open to litigation from contractors because of broken agreements, although it’s unclear to what extent.
Almost 250 employees and consultants were involved in the Green Line on behalf of the city, and about 800 staff were brought in as contractors. There are more than 70 contracts that need to be addressed as a part of the wind-down.
Subject to council approving the winding-down proposal, job terminations related to the Green Line project will begin this week.
Bitter words
It comes as the province and council continue to exchange bitter words on who is to blame for the project going off the rails.
In a video posted Monday evening to X, formerly Twitter, Transportation Minister Devin Dreeshen blasted the Green Line in its current form, calling it a “vanity project,” saying it was poorly planned and “drawn up on a napkin.”
On Tuesday morning on CBC Radio’s Calgary Eyeopener, Ward 9 Coun. Gian-Carlo Carra said the province’s decision to pull its funding from the project amounted to setting $1 billion “on fire,” calling such a decision both “stupid” and “malicious.”
It all comes in the wake of Dreeshen’s announcement that the province would be pulling its $1.53 billion in funding from the $6.2-billion transit project if the city doesn’t rejig the line’s route and extend it farther south.
The city has already spent more than a $1 billion dollars on land acquisition, utility work and new rail vehicles for the project. The current city council approved an updated, shortened version of the Green Line LRT in July with an added $700 million in costs.
In an interview with CBC News on Aug. 1, Dreeshen said the province’s portion of the funding was “100 per cent” secure.
Gondek says it’s clear the Alberta government isn’t willing to budge on its rerouting demands, and the city can’t afford to pay for the LRT without provincial funding.
Dreeshen says the project’s scope has shrunk while its cost has inflated, and the provincial government is getting an independent engineering firm to create alternative proposals for an above-ground alignment of the transit project by the end of the year.
The Government of Alberta is here for Calgarians. We will design a common sense, cost effective Green Line alignment that will better serve Calgary commuters. <a href=”https://t.co/b36fYfCO9f”>pic.twitter.com/b36fYfCO9f</a>
—@DevinDVote
The dispute has become highly politicized, as former Calgary mayor Naheed Nenshi, who left city hall in 2021, became leader of the Opposition NDP in June.
Dreeshen has labelled the Green Line project the “Nenshi nightmare.” He has said the former mayor is responsible for mismanaging the project from the start and that it was never properly engineered.
Nenshi, in turn, has blamed Dreeshen for turning the project into a political football and putting jobs at risk.
Nenshi responds
On Tuesday afternoon, Nenshi responded to news of the project’s wind-down costs at a Calgary Chamber of Commerce event hosting the provincial NDP leader.
“They lit $800 million on fire. Why? So they can insult me,” said Nenshi.
“By the way, the ‘Nenshi nightmare’ merchandise will be available from the Alberta NDP store just in time for Halloween. So thank you Premier Smith and Minister Dreeshen for helping me raise a lot of money for the NDP.”
Nenshi referred to the Alberta government’s handling of the Green Line as “petulant toddler decision,” adding he believes the situation will erode confidence in the construction sector’s willingness to invest in provincial projects.
“The sad news is when you elect an NDP government in 2027 and we resurrect it, it’s going to be way more expensive.”
In a scathing thread posted to social media Monday, Gondek skewered the province over its decision to pull its portion of the funding for the Green Line LRT, calling it “political stunting.”
Premier Danielle Smith has previously said the province thinks it can do a better job than the one currently proposed by the city.