REM price tag grows to $7.95B; owners vow to absorb cost overruns

Montreal’s Réseau express métropolitain (REM) is going to cost $7.95 billion to build, according to the latest cost estimate.

That’s $1.65 billion more – a 26 per cent increase – than the $6.3 billion originally confirmed with bidders.

The group that owns and operates the light-rail network, CDPQ Infra, says it intends to fully absorb the cost overruns.

CDPQ first revised the cost of the project to $6.5 billion in December 2019, then to $6.9 billion in June 2021.

---

Timeline: construction of Montreal’s REM

---

At a press conference Wednesday in Montreal, CDPQ broke down where the project went over its initial budget.

It says the COVID-19 pandemic and the war in Ukraine contributed to $800 million in unexpected costs due to the impact on supply chains and the price of goods and labour.

An explosion in the Mont Royal tunnel in November 2020, in part, delayed the opening and added $350 million to the price tag, the CDPQ says.

And “optimization, upgrades and improvements” contributed to an additional $500 million.

CDPQ Infra CEO and president Jean-Marc Arbaud, however, vigorously defended himself against downplaying the cost overrun, which reached 45 per cent compared to the $5.5 billion projected when the project was initially announced in 2016, arguing that it was no longer the same project since stations and around 40 trains had been added. These improvements raised the estimate from $5.5 billion to $5.9 billion, only to inflate it to $6.3 billion when confronted with the bidders’ reality.

“Under the REM financing package, the additional $1.65 billion investment required to complete the project will be fully absorbed by CDPQ Infra.

In addition, the project’s main financial parameters, such as the passenger/km fare adjusted for price indexes and the expected performance target, are not affected.”

Up and running since July 31

One section of the REM officially launched July 31. It links Montreal’s Central Station to Brossard.

CDPQ says it’s made over a million trips so far, with a daily average of 30,000 trips.

The group says it’s running with a “99 per cent service reliability rate from the first few weeks” – six service interruptions over 860 hours of operation.

---

RELATED:

• ‘This is intolerable’: Griffintown residents deploring incessant REM noise
• ‘The train is doing whatever it wants’: REM strands passengers in garage
• REM: CDPQ Infra to present plan to reduce noise

---

The majority of the rail system will open late next year, with an airport link to come in 2027. It will have 26 stations across a 67-kilometre network.

As for the north and west routes, which will run to Deux-Montagnes and Sainte-Anne-de-Bellevue, CDPQ Infra plans to begin testing next spring, but Arbaud refused to give a date for commissioning, saying only that the end of 2024 was possible.

CDPQ Infra says the civil engineering work is “largely complete” on the the West Island and North Shore branches

“CDPQ Infra is now starting to finalize the 19 stations, install the control systems, finalize the rail tracks and electrification. Testing on the branches will begin in spring 2024.

“On the airport branch, teams will soon be busy installing the rail tracks in 2024. Commissioning for this section is scheduled for 2027, in line with Montréal Airport’s timetable for completing the station.”