City of Ottawa settlement with Rideau Transit Group resets relationship, sides say

File photo of an Ottawa LRT train.

The city of Ottawa and its LRT contractor have reached a settlement the two sides say will reset their relationship after years of legal fighting.

The city and Rideau Transit Group issued a joint statement on Friday announcing the out-of-court agreement, saying it "resolves several issues between them and resets their relationship to focus on the delivery of safe and reliable transit service to the people of Ottawa."

The sides had been suing each other—the city launched a $131 million lawsuit in 2021 over the Confederation Line's problems and delays, and RTG countersued for $225 million.

The city was withholding nearly $70 million in payments over the ongoing dispute. Both parties have refused to say publicly how much money is involved in the settlement.

Council voted Wednesday night to direct the city's transit services chief Renee Amilcar to "negotiate, finalize and execute" the agreement, after hours of closed-door discussions.

RTG acknowledges default

The city issued a notice of default in Oct. 2021 after derailments on Aug. 8 and Sept. 19, 2021, the latter of which shut the line down for nearly two months.

The agreement resolves that "through RTG’s acknowledgement of the Default and the City’s confirmation of the immediate cure based on RTG’s rigorous plan to address the issues that led to the derailments and come to a sustainable resolution of the axle bearing assembly issue," the statement said.

The agreement says RTG is committed to resolving the issues before the Stage 2 east extension to Orleans opens. That's scheduled for 2025.

"In addition, RTG has and will continue to implement various interim mitigation measures to ensure the reliability of O-Train Line 1."

The Oct. 2021 notice of default was the second one the city issued against RTG. The first was in March 2020, which the statement announcing the settlement does not mention.

"The City acknowledges the work RTG has done and will continue to do to ensure the people of Ottawa receive safe and reliable service on O-Train Line 1 and will continue to monitor RTG’s progress," the statement said.

The agreement also includes a promise by RTG/RTM to fill positions and hire more people to help fix issues, as CTV News reported Wednesday night.

The two sides have also settled several disputes concerning RTG's performance and the city's administration of the contract during the maintenance phase of the project.

Commission recommended cooperation

The agreement comes after the public inquiry into Ottawa's light rail transit project released its final report.

Commissioner Justice William Hourigan noted the relationship between the city and RTG was "adversarial" at critical stages of construction and maintenance, and "this fact contributed to problems with the OLRT1 project."

The city and RTG say they will move forward with a goal of "improved partnership and collaboration" as recommended in the commission report.

"The settlement demonstrates both parties’ acknowledgement of the importance of cooperation, which the Commission Report urged," the statement said, adding that the agreement reflects a number of the commission's recommendations.