(Quebec) Construction costs for the Réseau express métropolitain (REM) will rise to 9.4 billion, or 2.4 billion more than the bill of 7 billion expected in 2018.
Posted at 10:23 a.m.
Updated at 10:32 a.m.
These new data come from an update of the accounting analysis of the financial package published in 2018 carried out by the General Auditor (VG). Guylaine Leclerc.
According to his analysis, the sums required to carry out the large-scale project increased from 7 to 9.4 billion from 2018 to 2024. This estimate includes the costs paid so far and what is required until commissioning complete REM by 2027. We are talking in particular about costs arising from contracts concluded with consortia and costs linked to the acquisition of land.
Guylaine Leclerc also adds that “these costs could increase at the end of the contractual processes” and other methods of settlement aimed at “the final determination and distribution of costs” of the project – the largest public transport project undertaken in Quebec since 50 years, she writes.
This assessment contrasts with that made public by CDPQ Infra in September 2023 when it was stated that the REM would ultimately cost almost 8 billion. In November, this cost was revised to 8.34 billion. This is because CDPQ Infra uses net construction costs to finance. This amount takes into account deductions from income and certain contributions obtained during the construction period, the report clarifies.
According to CDPQ Infra, such a presentation allows it to demonstrate, during public financial updates, that it assumes any increase in costs since it discloses the evolution of its investment in the project, while confirming that the investment of the government remains unchanged.
The Auditor General, Guylaine Leclerc, in her report.
In its evaluation, the VG also emphasizes that during its operation, the contribution of the Government of Quebec will represent more than half of the ridership revenue that the REM will receive. Furthermore, according to CDPQ Infra forecasts, the Quebec government “would begin to obtain a return on its share capital investment in approximately 25 years.”
In September 2023, CDPQ Infra affirmed that the pandemic, the war in Ukraine and the discovery of century-old explosives in the Mont-Royal tunnel explained the increase in construction costs. These three factors alone account for 800 million due to significant impacts on supply chains and labor availability.
A recent estimate of the project was around 7 billion, but in 2018, when the first bidders were submitted, the estimated cost was 6.3 billion. In 2017, the cost was set at around 5.9 billion. But when the REM was launched in 2016, the bill was 5.5 billion.
With Henri Ouellette-Vézina, The Press
