Calgary revises Green Line plans due to cost escalations

Key Takeaways:

• The budget for Calgary’s Green Line Phase 1 project has increased to $6.248 billion, up from $5.543 billion in 2020.
• To address cost escalations, the scope has been reduced, with construction focusing on the core segment from Lynnwood/Millican to Eau Claire, deferring other sections until additional funding is secured.
• The project will shift from a Design-Build-Finance contracting strategy to a multi-contracting strategy, anticipated to save around $600 million.

The Whole Story:

Calgary’s Green line project budget has increased and its scope has been cut in response to concerns over cost escalations.

Calgary City Council has approved a revised Green Line Phase 1 project scope, capital funding request and delivery model, as recommended by the Green Line Board, to ensure construction can begin while addressing cost inflation.

Officials stated that to respond to rising costs and potential future escalations, the board’s recommendations were based on both the extensive work undertaken to reduce costs through value engineering and design optimization and the direct outcomes of contractor negotiations during the Development Phase. 

Green Line main construction for Phase 1 will now begin by building the core from Lynnwood/Millican in the southeast to Eau Claire downtown, connecting into the existing Red and Blue LRT lines. Construction of the remainder of the Council-approved Phase 1 south to Shepard, as well as any future extensions north or south, will proceed when additional funding is in place. This decision will allow for new Bus Rapid Transit (BRT) and bus service in the southeast to provide connections into the LRT, contributing to the projected opening day ridership of approximately 32,000 Calgarians.

Council also approved deferring construction of the Centre Street S. station and shifting the 4 Street S.E. station near Stampede Park from underground to street level, to better facilitate future regional transit connections and integration with the planned “Grand Central Station”.

“The Board is confident that revising the construction phasing for Phase 1, building from Lynnwood/Millican to Eau Claire, is the best approach to control costs, mitigate risks and build the critical core of Green Line” shared Don Fairbairn, Chair, Green Line Board. “We appreciate that some Calgarians will be disappointed that they will have to wait longer for the new LRT service to reach their community but starting construction will lay a foundation for Calgary’s sustained growth and ensure the long-term benefits of housing, connectivity and ridership can be maximized.”

Officials stated that through extensive efforts during the development phase, significant cost savings were created. However, without additional funding from the province and federal government for this first phase, the city will increase its investment in the Green Line by contributing $705 million to build the core of Phase 1 at a total new project cost of $6,248 billion, up from the approved budget of $5,543 billion in 2020.

“Today’s decision is more than a decade in the making and sets Calgary up for success for years to come, especially at a time when we are the fastest growing city in the nation. The Green Line is a critical piece of transportation infrastructure that demonstrates all three orders of government are focused on collaboration and cooperation to get megaprojects moving” said Mayor Jyoti Gondek.

Current City of Calgary capital investments and municipal property taxes in 2025 will not be impacted by the increased investment in Green Line.

Aligning with current market dynamics, a change from the Design-Build-Finance (DBF) contracting strategy to a multi-contracting strategy was also approved. This change is expected to save approximately $600 million and allow Green Line to execute contracts on individually negotiated scopes of work.

Phase 1 of Green Line LRT is the largest infrastructure investment in Calgary’s history. The more than $1.4 billion spent to date included $350 million in land acquisition, $400 million in enabling works such as the utility upgrades nearing completion in the Beltline and downtown and the new fleet of low-floor light rail vehicles, scheduled to begin arriving in late 2027.

Green Line will work with the Province of Alberta and Government of Canada on approval of the revised funding agreements, in advance of signing the project agreements and beginning main construction later this year.