With most of the design and property acquisition completed and construction scheduled to start this March, a $673-million, 29.4-kilometer north-south extension of Ottawa's light rail system has been abandoned.

Last summer, the city approved a design-build and 15-year maintenance award with Ottawa LRT Corp., a private consortium consisting of Siemens Canada, Dufferin Construction Company, PCL Constructors Canada Inc., Stantec Consulting Ltd. and Stantec Architecture Ltd. It was to be financed by the city with a $172-million contribution from both the federal and Ontario governments. Newly elected mayor Larry O'Brien was critical of the project, as were downtown merchants worried the entirely at-grade line would be too disruptive.

On Dec. 6 the new city council voted to cut off the downtown portion of the route, and consider tunnel options. But the federal government required a review of the revised project, with the result the city couldn't meet a Dec. 15 deadline to satisfy all contract conditions. As the agreement was conditional on securing senior government funding, the city won't be liable for penalty costs, says economic development director Rjean Chartrand.

Consortium spokesperson Jason Di Tommaso refused comment. With the cancellation, international companies will be reluctant to invest in Canadian infrastructure projects, says Jane Peatch, executive director of the Canadian Council for Public Private Partnerships.