A new report shows that the West Light Rapid Transit (LRT) line in Calgary cost about $1.4 billion, which is double the estimate approved by council in 2007.
“We did not identify sufficient information presented to council setting out what project scope was to be achieved for the amount of money requested,” said the city auditor’s office report to the audit committee.
“We did not identify information setting out the basis of the cost estimation request leading to the budget request, or the anticipated level of confidence in the estimate and associated contingency included in the request.”
The Calgary West LRT project officially opened for service on Dec. 31, 2012 and was completed for slightly under an approved budget of $1.336 billion.
However, council approved a $700 million budget for the West LRT project in November 2007.
This included: $50 million for design and strategic land purchase; $84 million for light rail vehicles to service the line; and $566 million for the construction of the six stations and 8.2 kilometres of track.
According to the audit, construction cost escalation was allowed by adjustments to the budget that were approved by council.
However, it included limited written documentation setting out the reasons why the adjustments were required.
For example, the scope and cost of the project increased during 2008 and 2009 through public engagement, engineering requirements, and council decisions.
Key changes to the project included:
Modifying the station and line at 45th Street from at-grade to below grade;
Inclusion of an associated project to build a parkade at 69th Street;
Inclusion of an associated project to redevelop the Sarcee Trail/17th Avenue interchange as part of the line construction; and
Inclusion of the relocation and redevelopment of a high school situated along the line.
As a result, the city auditor recommends that the city manager enhance the Corporate Project Management Framework (CPMF) by adding the requirement for requests for project funding/approval from council to include information on scope of the project, as it relates to the budget request.
In addition, the CPMF should include assumptions underlying the budget request, including but not limited to the class of estimate and consequential range of estimation and contingency.
The largest category of project expenditure is LRT construction costs, with a forecast at project completion of $890.8 million.
The city chose a design/build approach for construction.
“High level information about the potential benefits of this project approach was provided to council at the time,” said the report.
“We did not identify detailed analysis of anticipated risks/benefits of the design/build approach, or analysis of alternative project delivery methods.”
In response, city administration said the owner’s engineer prepared a report for the city with recommendations on the delivery methodology.
The city used a new approach to acquire land ahead of construction, which cost an estimated $162.4 million as of Dec. 31, 2012.
Council approved a land acquisition strategy, including deadlines for acquisitions and a dedicated real estate team of a project lead, land agents, communications and legal.
The West LRT is an 8.2-kilometre line extending west from the west end of downtown 7th Avenue to 69th Street S.W.
The line contains six stations, including Calgary’s first elevated LRT station and first underground LRT station. Construction started in February 2010.