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The City of Edmonton is ending its 30-year contract with TransEd for the Valley Line Southeast LRT — 25 years early.
At a news conference on Tuesday afternoon, city administrators said the decision was a financial one, and added it was not a reflection of TransEd’s performance.
The city will be giving TransEd a termination payment to exit the contract early and will pay for it by refinancing outstanding debt related to the agreement through the province. City staff didn’t disclose the amount owed for the termination payment, but said the decision will save taxpayers money in the long run.
TransEd, a public-private consortium, struck a $1.8-billion agreement with the city to build the southeast part of the line and operate it for 30 years. However, construction was plagued with delays and problems.
The city is now preparing for the west leg of the line to open in 2028, which is being built by a different company. An operator for that leg of the LRT line had not yet been determined, but the city announced Tuesday that the Edmonton Transit Service (ETS) would become the operator of both legs.
City Manager Eddie Robar said the city needed to ensure both sides of the line shared an operator. He said that left the city with three available scenarios:
Expand the 30-year deal with TransEd to include the west leg.End the TransEd agreement early and find a different private operator.End the agreement and move everything in-house.
“We found that moving the operations of the entire line to ETS is a cost-effective approach,” Robar said.
“It presents the best value and the most certainty to taxpayers.”
Robar said the city can operate the line at a price that is more affordable and efficient.
City Manager Eddie Robar said he expects there will be opportunities for many TransEd staff to move over to Edmonton Transit Service. (Emily Fitzpatrick/CBC)
City council approved the decision to make ETS the sole provider at a private discussion in May.
Emily Stremel, the chair of the advocacy group Edmonton Transit Riders, said she thinks having everything under ETS will eliminate duplication.
“This is pretty exciting from our perspective,” she said.
Stremel said she’s seen timely communication with riders as an issue on the Valley Line.
“Riders are seeing trains go down with no idea of when a replacement bus is going to show up,” she said. “Because TransEd would have to contact the City of Edmonton in order to arrange those buses in order to arrange those communications.”
Levels of service
ETS branch manager Carrie Hotton-MacDonald said the move will improve consistency in transit schedules. For example, the city will be doing a review of how frequently trains come across the different lines.
Currently, the Valley Line has better frequency than other lines.
One frequent rider, Lincoln Ho, said he worries those trains coming every five minutes could be at risk under the new model.
“It saddened me to know that this was going to happen to Valley Line because the service is going to degrade over time,” Ho said in an interview.
“If there’s going to be a longer gap, I might not even take the service at all,” he said, noting that in some cases riding his bike can be faster.
Stremel said she will also be watching to ensure that train frequency isn’t affected.
“We don’t want to take away a really good thing on the Valley Line.”
Both Stremel and Ho said they’d like to better understand how the city came to its decision and the financial penalty for ending the contract early.
Transition period
Robar said the total number of impacted staffing positions is unknown but he expects there will be opportunities for many transit staff to move over to ETS. He said the transition will take one to two years.
A statement from TransEd general manager Sergio Flores-Schaeffer, said the consortium is proud of the work it has done over the years.
“While TransEd is disappointed, we respect the City of Edmonton’s decision,” Flores-Schaeffer said.
“TransEd’s primary focus now will be to support our staff as the transition to ETS management takes place.”