Hurontario LRT fails to meet fall 2024 completion—major problems with already laid track as construction group’s credit rating downgraded  

Mississauga’s already late Hurontario LRT project is now “incurring concurrent delays on multiple other fronts,” according to a recent credit rating report that highlights some of those “multiple” problems. The “project has discovered issues with track tolerances for already installed sections that are out of compliance with specifications.”

The credit downgrade report by S&P (Standard and Poor’s) Global, which provides independent credit ratings for a wide range of markets, suggests construction consortium Mobilinx, which was awarded the $4.6 billion project in 2019, is now facing financial challenges, alongside the design problems. 

“To accommodate vehicle wheel profile and rail interface, the project had to make design changes to and subsequently reprocure special tracks. This will impact two intersections in the alignment. Since the project is incurring concurrent delays on multiple other fronts, the implications and treatments of such delays are still under discussion,” S&P revealed in early October. 

Due to ongoing financial uncertainties linked to the delays, S&P downgraded Mobilinx’s credit rating to BBB, the second lowest of five categories in the rating agency’s “Investment Grade” classification (AAA, AA, A, BBB, BBB-). One more downgrade would mean, according to S&P’s subjective analysis, that the project is considered the “lowest investment-grade by market participants”.

The downgrade to BBB is a warning to financial institutions that the project is facing serious challenges, which, according to S&P, are being dealt with by Metrolinx, the provincial transit agency, which is working with Mobilinx, the company it gave the $4.6 billion contract to, on “pending claims through a global settlement” to resolve any financial and construction delay issues caused by the company’s problems on “multiple” fronts. 

The route shown with the downtown loop, which the PC government has committed to reinstalling after it was removed from the project by Doug Ford.

(Metrolinx)

The revelations about the city’s transformational high-order transit project, which was supposed to be completed in 2022, leave the launch date up in the air, as the provincial government has now removed an expected completion date. 

“When construction nears completion and we move into the testing and commissioning phase, we will be in a better position to provide a specific opening date,” Metrolinx stated.

The public transit agency will no longer provide an updated completion date for the project, which will see a light rail train run from Mississauga’s south end, where the Port Credit GO Station is, all the way north into Brampton’s south end, turning around at Steeles Avenue.

The Province and Metrolinx have remained largely silent on the reasons for the failure to meet the already revised fall 2024 completion window. The Pointer filed a freedom of information request with the Ministry of Transportation to get further details but the deadline a month ago to provide any records was extended to November 15th. Metrolinx continues to assure “significant progress” has been made on the project. 

Despite “supply chain” and “labour disruption” problems, a spokesperson said, “track work has been completed at 30 of 55 intersections along the corridor, with six out of 18 stops having been constructed. Preparations are also underway for the upcoming delivery of the Light Rail Vehicles at our Operations, Maintenance and Storage Facility.”

Hurontario Street facing south toward the city’s lakefront where the line will begin.

(Paige Peacock/The Pointer) 

S&P has placed Mobilinx on a negative credit watch, which the agency says “reflects increased schedule pressure amid newly reported delays and uncertainties with the timing of pending relief claims.” The credit rating agency cautions it could lower the rating if Mobilinx reports further delays. It marks the second time the construction consortium has been under S&P’s microscope after the agency put Mobilinx on the radar in April 2022 amid design and construction challenges, including permitting and material supply issues. The credit watch was lifted in April 2023 after the agency deemed construction was progressing well.

Achieving substantial progress while reducing the schedule for completion, “will be critical to the project's rating,” S&P reported last month. “We could assign a stable outlook if [Mobilinx] accelerates construction activities or receives enough compensation and schedule relief such that we conclude the remaining works can reasonably be done before the revised substantial completion date.”

This completion date has now been removed from any public record, after the provincial transit agency had previously included a timeline for the project’s completion.

“We are aware of the recent S&P Report and are in regular communication with our contractor, Mobilinx. Our focus is on driving this critically important project forward,” a Metrolinx spokesperson said.

Councillor Joe Horneck said work is still continuing on the project and council is waiting for an upcoming update from Metrolinx though there is no date for the presentation. An update on the overall project is expected to be shared with council at the November 6 general committee meeting but it is not clear if the problems addressed in the S&P report will be discussed, or if an updated completion date will be provided. 

“[T]he longer it's being held up the more that we know that's going to hurt us from realizing that future where we can have better transit access in that area. It's a key spine of the city that connects so many different bus routes. So we're anxious to see it up and running.” 

He is concerned about impacts on residents and businesses. A series of documents and notices from Metrolinx over the past year detail an array of temporary road closures, or reduced lanes, resulting in commuting setbacks, with the consortium continuously warning “traffic delays are expected”. Horneck stressed the need to avoid lengthy delays.

Commuters and businesses continue to be plagued by construction delays along Hurontario Street.

(Paige Peacock/The Pointer) 

Staff and elected officials inside City Hall have been left in the dark about the revised project timeline. 

“We receive updates from Metrolinx but it's really a contractual relationship between Mobilinx and them so we don’t, surprisingly, get all the information that perhaps residents would expect us to get,” Councillor John Kovac said. “Where the project is facing delays, we haven’t been advised by Metrolinx on a new date.”

“Construction delays are always expected. It's our job to be concerned and I am, but at the same time I feel I have enough assurances that things are continuing to go smoothly enough with all the updates we are receiving that my hope for the project and support of it is not waning as a result of that.”

Councillor Alvin Tedjo, who has been a major advocate for transit, told The Pointer he shares the same concerns. 

“This is a critical infrastructure project in our city and will help keep everyone in Mississauga moving. What we see here in Mississauga, and with other similar projects along Eglington (Toronto’s long-delayed crosstown LRT project) and in Ottawa, are the limitations of our existing Public Private Partnership model. We need to get more transit built and the Province should review these projects to ensure future transit projects do not encounter similar cost overruns and delays.”

The Hurontario Line (which will be called the Hazel McCallion Line) is now the third light rail project under construction in the province that has been left without a completion date. Tedjo and others in the city hope Mississauga’s LRT will see similar delays that have plagued the Eglinton Crosstown and Finch West lines, which have been buried in construction, contract and financial challenges for years.

The LRT delays have led to persistent calls for restructuring at Metrolinx, and the firing of the agency’s heavily criticized CEO Phil Verster.

Earlier this year, LRT work focused on structural upgrades over Highway 403, including repairing concrete and expanding sidewalks in anticipation of the LRT.

(Metrolinx) 

The decision to remove a completion date for the Hurontario LRT does not instill public confidence, critics say.

“They know that by scheduling anything they're increasing risk to the project, and it's not about risk to the actual project completion, which already exists, but it's risk to their reputation,” Cameron MacLeod, executive director of transit advocacy group CodeRedTO, told The Pointer. “So conveniently, because Metrolinx is a very secretive organization, there's really no transparency in their governance, they can play to that strength and simply not talk and the provincial government, government agencies like Infrastructure Ontario, they're perfectly content to have no information out there.”

“It makes everything a little bit harder when a transit agency or construction consortium or a ministry can't be trusted. We've got a situation where we don't know what's going on because of their secrecy, the lack of transparency and we've got challenges within the organization.”

He does not have the same concerns over Mississauga’s project, compared to the widespread failures of Toronto’s LRT construction.

“Without any insider knowledge, I would say, no, we're not going to see the absurd delays of the Crosstown or the absurd problems that the Ottawa LRT phase one have seen. There's been a lot of learning. But also the McCallion Line, it's simpler, it's not as complex as those other projects, in terms of tunneled sections, in terms of interfaces, there's a lot more space to work with.”

Prabmeet Sarkaria, Minister of Transportation and Brampton South MPP, assured during a recent press conference he has “full confidence in Phil Verster to deliver on our Metrolinx projects,” adding that “building transit is very difficult”.

MacLeod expressed concern over the possible ripple effect of extended delays in Mississauga.

“City Council is really stuck without the information that they need to make all of their decisions about what happens to where the buses go, about what happens to roadways, about what happens to signal timing. All sorts of things that the city really needs to understand, but it's hidden behind multiple walls.”

“The problem isn't the private sector or which specific political party is in power; it's the transparency, it's the governance. That's what bites us on every project, regardless of who's in charge, regardless of where the money's coming from. If we're not willing to open the books, and if we're not willing to be transparent about what's happening, we're just going to keep getting all the same stuff wrong [with] every project.”
 

Email: [email protected] 

Twitter: @mcpaigepeacock 

At a time when vital public information is needed by everyone, The Pointer has taken down our paywall on all stories to ensure every resident of Brampton, Mississauga and Niagara has access to the facts. For those who are able, we encourage you to consider a subscription. This will help us report on important public interest issues the community needs to know about now more than ever. You can register for a 30-day free trial HERE. Thereafter, The Pointer will charge $10 a month and you can cancel any time right on the website. Thank you