Less than one week after city council agreed to pay $36.7 million to settle a lawsuit over a cancelled north-south light rail contract, the city is considering building part of the project anyway.

"Right at the present time, that is a project that stands in a position that we could build something in the short term," said Coun. Steve Desroches, who noted land for the project has already been acquired and the environmental assessment for the plan is complete.

A memo that outlines the city's pitch for funding to the Ontario government shows two proposals for phase one of the city's new transit plan.

One option includes construction of a downtown tunnel, as well as an east-west light rail line from Blair Station to Tunney's Pasture. The alternative plan is to build the downtown tunnel, as well as converting the north-south diesel O-Train into a two-track electric line.

Mayor Larry O'Brien, who opposed the north-south light rail line during the last election, now says building an electric line to the city's south end makes sense, giving the city more time to work out the details of an east-west line.

Last week, the mayor defended a multi-million dollar settlement over the cancelled light rail project with a consortium led by Siemens. He argued the cost of cancelling the contract was a better financial decision than going through with it.

Although the north-south line would run a shorter distance than the one that was cancelled in 2006, there's speculation a new electric line will prove costly.

"It's pretty clear that it may be half the line, but it will be twice the price by the time we get around to building it," said Coun. Diane Deans, who was a proponent of the cancelled north-south light rail project.

If the city had moved forward with the original plan, Deans said the north-south line would already be near completion.

"If we had gone forward with that plan, we'd be opening the north-south line within a month and we would be in an advanced state of readiness to go east-west at this point."

She also added that the environmental assessment and land acquisition for an east-west line would likely be complete.