Promoter defends Montréal REM cost escalation

CANADA: Despite ‘extraordinary circumstances and exceptional technical challenges’, the construction costs for Montréal’s REM automated light metro have been kept ‘within a very competitive budget compared with other similar major transportation projects around the world’, according to project promoter CDPQ Infra.

The first 17 km section of the 67 km REM opened in July.

The current cost of the project is put at C$7·95bn, CDPQ Infra said on September 13, up C$1·65bn from C$6·3bn when bidders were selected in 2018.

CDPQ Infra said that while this is a 26% increase, excluding the impact of the pandemic would limit the increase to 13%.

CDPQ Infra said factors included:

• the coronavirus pandemic (C$800m): the pandemic and the conflict in Ukraine had a major impact on supply chains, the price and availability of goods and labour both local and international. Additionally, it led to the closure of worksites and the adoption of stringent sanitary measures. These items account for half of the increase in project costs;
• Mont Royal Tunnel and condition of the underground vault (C$350m): there were multiple challenges associated with the discovery of a century-old dynamite charge in the former railway tunnel which is being incorporated into the REM project, and severe deterioration of the central wall in the southern section. The vault in this section has been completely replaced, and the wall should now last for decades;
• optimisation, upgrades and improvements (C$500): this includes C$350m for developments carried out by third parties and rail operators, and C$150m in response to requests to improve access and layouts around the stations.

The additional C$1·65bn cost will be fully absorbed by CDPQ Infra, which said the project’s main financial parameters, including index adjusted fares and performance targets, are not affected.