Construction and planned operation of a $5.3-billion Montreal light rail system by Quebec’s giant public pension fund has the potential to be a landmark development in public-private infrastructure projects.
Montreal-based Caisse de dépôt et placement du Québec has been given sweeping authority over the project by city and provincial authorities to select the 67-kilometer line’s route and manage its operation and maintenance when it is set to open, beginning in 2021.
But Caisse de dépôt will first have to weather a storm of criticism, which is heating up just as construction of the LRT system—the Réseau électrique métropolitain (REM)—kicks into gear. The pension fund’s infrastructure arm, CDPQ Infra, finalized earlier this month award of the EPC contract to NouvLR General Partnership—a joint venture of SNC-Lavalin Inc., Dragados Canada Inc., Groupe Aecon Québec Ltée, Pomerleau Inc. and EBC Inc.
Quebec Premier Philippe Couillard is taking heat over the line’s route from the opposition party, the Parti Québécois, which threatens to scrap the project if it wins power. Environmentalists and other opponents want a more extensive review of project impacts. Also, a deal that would have 200 automated rail cars for the line built in India instead of Quebec has angered the Coalition Avenir Québec, a center-right political party.
Michael Sabia, Caisse de dépôt CEO, has argued Quebec will still enjoy a substantial economic boost from the light rail line, despite the rail-car outsourcing. That decision was made by Alstom Transport Canada and SNC-Lavalin, which won a separate $2.2-billion contract to run the new light rail system and maintain it, as well as to provide the railcars and other systems. Sabia said the project will have $3.1 billion “in Quebec content” and create 34,000 jobs during construction.
While political fireworks are in the headlines, Caisse de dépôt will face even more fundamental challenges to make the venture work, from generating enough revenue to coordinating with other municipal public transit systems, notes Matti Siemiatycki, an associate professor of planning and geography at the University of Toronto. “This is seen as pushing beyond the traditional public-private partnership to a much more expansive role for the private sector, in this case the pension investment sector,” he says.