Winnipeg Free Press - PRINT EDITION

Premier aware of transitway escalation: Katz

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THE Southwest Transitway completion saga has taken yet another twist, as Mayor Sam Katz says the province was briefed about the city's plan to broaden the scope of the project before Premier Greg Selinger complained about the increased cost.

The city has proposed to bundle the completion of the Southwest Transitway with the reconstruction of the Pembina Highway underpass and the replacement of a nearby sewer, at a total project cost of $600 million. That's an increase of $250 million over the previous $350-million price tag for extending the transitway seven kilometres to the University of Manitoba's Fort Garry campus.

P3 buyout approved

The City of Winnipeg is about to become the proud new owner of one of its own police stations.

City council voted unanimously Wednesday to borrow $16 million to purchase the Winnipeg Police Service's South District station, a 33,000-square-foot facility under construction on Grant Avenue.

It was built under a public-private partnership between the city and Shelter Canadian Properties, which was awarded a 30-year contract to build, finance and maintain the station.

The city planned to lease back the new South District Station at a cost of $1.17 million a year for the first five years, but low interest rates warranted the buyout. The purchase will save the city $9.7 million over 30 years, according to a report to council.

Bundling the three projects would avoid the need to rip up the vicinity of Pembina Highway and Jubilee Avenue three times over five years and move a portion of CN's Letellier line twice, Winnipeg chief operating officer Deepak Joshi said earlier this week.

The Selinger government claimed to be taken aback, with the premier lamenting the increased scope and "costs that have dramatically escalated."

On Wednesday, Katz said senior provincial officials Vince Barletta and Linda McFadyen were briefed about the combined project weeks before Selinger made his remarks.

Katz said Joshi and Winnipeg chief administrative officer Phil Sheegl met with Barletta and McFadyen to pitch the benefits of planning and funding all three projects.

"I think we'd all look pretty foolish and the media would have a heyday with it if we build something and then we tear it up within a year to do something else," Katz said. "Our bureaucrats met with their bureaucrats, who were not only aware of it, they were supportive of it. A decision was made to set up a briefing for the premier and the mayor."

Katz said he and Selinger spoke about the Southwest Transitway as recently as Monday and agreed to meet soon. The premier's staff then told the mayor's staff no meeting could be held before July 9, Katz said.

Although provincial officials were unavailable for comment on Wednesday, Selinger's office released a letter from the premier to Katz, dated June 21, that illustrates how the city increased its rapid-transit funding request from the province twice over the past six weeks.

On May 24, according to the letter, the city increased its Southwest Transitway funding request to $187.5 million from $137.5 million and pegged the total project scope at $500 million, up from $350 million. That was six days before Katz accused Selinger of failing to commit to the project in time to meet federal-funding deadlines.

Then in June, the city increased its provincial funding request to $225 million while the project rose in total cost to $600 million, according to the letter.

"Given the evolving scope and rising cost projections associated with Phase Two, I believe it is imperative for us to discuss how best to move ahead," Selinger said in the letter.

The issue at the heart of the city-provincial dispute does not appear to be money itself, but the source of the money, as Katz is concerned there is a limited amount of cash available under the federal Building Canada Fund, which is devoted to infrastructure.

Hence the mayor's preference for accessing the federal PPP Fund, which is devoted to public-private partnerships.

Republished from the Winnipeg Free Press print edition June 27, 2013 B1

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