1 Executive Summary
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SkyTrain technology was chosen for the Evergreen Line because it is estimated to have two and a half
times more ridership than a Light Rail Transit (LRT) system; it will provide a direct connection without
transfer onto the Millennium Line; and is almost twice as fast as LRT.
The total Project budget is $1.431 billion, which includes the base project scope ($1.403 billion)
and provision for Lincoln Station ($28 million). Funding for the Project includes contributions
of $417 million from the Government of Canada, $400 million from TransLink and $586 million from
the Province of British Columbia. In addition, the City of Coquitlam assembled a unique funding
arrangement with a private partner and the federal crown corporation PPP Canada to enable the
Lincoln Station to be constructed for opening day. The Province is responsible for the design
and construction of the Project and, following completion, TransLink will operate the new line as
part of the SkyTrain network.
The Project will be completed in several parts. The Province has assembled the property required for
the route and conducted various advance works to prepare the site for major construction. The
Province and TransLink have together entered into a fixed-price contract with Bombardier for the
supply of 28 new SkyTrain vehicles, and TransLink will supply fare collection equipment and faregates
for the stations. The majority of the infrastructure – including guideway, tunnel, stations and systems –
will be delivered by a single private partner.
The procurement decision to use a Design Build Finance (DBF) partnership delivery model for the
Evergreen Line infrastructure was based on a thorough analysis of procurement options. A Design
Build Finance Operate Maintain (DBFO) model (similar to the model used for the Canada Line)
was examined but deemed not appropriate for the Project because of the need for full operational
integration with the existing SkyTrain system. A Design Build Finance Maintain (DBFM) model was
rejected on the grounds that there would be greater economies of scale if the Evergreen Line was
maintained as part of the larger SkyTrain system.
A DBF model was chosen because it better met the procurement objectives, providing better risk
transfer related to scope and schedule, as well as opportunities for innovation particularly through
construction methodology.
In December 2012, the Province entered into a performance-based, fixed price project agreement
with the private partner (EGRT Construction) to design, build and finance the guideway, tunnel
and stations; install the automatic train control and other systems; and test and commission
the Evergreen Line. The term of the contract is approximately 3.5 years, and the fixed price of the
contract is $889 million.
During construction, EGRT Construction will receive partial progress payments to reflect a proportion of
the work actually completed. EGRT Construction will fund the remaining portion and will be repaid
when the Evergreen Line is declared substantially complete and meets a range of performance
requirements. The project agreement includes a range of performance measures – for example
traffic management and environmental protection requirements – which can result in a deduction to
payments to EGRT Construction if those measures are not met.
The Project is expected to achieve significant value for taxpayer dollars. In financial terms, the value
for money is estimated at $134 million (net present cost) when compared to the Design Build (DB)
comparator.
The significant factors in achieving this value for money include:
• The use of a single-bore tunnel, as opposed to the twin-bore tunnels envisaged in the reference
concept. This approach is expected to result in a shorter time to bore the tunnel, significantly
reducing schedule risk and potentially allowing the work to finish ahead of the required schedule;
• EGRT Construction has accepted the risk of geotechnical conditions in the tunnel within its
fixed price – the DB comparator assumed that the Province would share this risk and retain
significant contingency to cover it; and
• EGRT Construction has included efficient private financing including a mechanism that matches
private finance to the month-by-month credit requirements of the Project.
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7.2 Key Terms of the Project Agreement
Under the terms of the project agreement, EGRT Construction has an obligation to design, construct,
test commission and partially finance the Project in accordance with the specifications set out in the
agreement, and will receive payment for fulfilling these obligations. Key features of the project
agreement include:
• The design and construction of the Evergreen Line for a fixed price of $889 million excluding
HST/GST and with the exception of costs associated with risks that are retained by the
Province. The price includes the cost of PST following the re-introduction of PST in April 2013;
• EGRT Construction accepted the risk of differing site conditions in the tunnel, which is a key
project risk, within the fixed price;
• The Province will make partial payments of $582 million during construction based upon actual
progress. These payments will be insufficient to meet the full cost of constructing the line. EGRT
Construction will raise sufficient debt to fund the remaining construction costs. This will be paid
by the Province once the Project has been built and met specified performance requirements,
with $307 million being paid at substantial completion.
• At substantial completion, $40 million of this payment (or a letter of credit in this amount) will
be retained for up to a year after construction is complete, pending proof that the Line will meet
specified availability requirements under service conditions. In addition a further $8.9 million will
be retained as security for the general warranty period;
• As well as a general two-year work defect warranty, the project agreement includes
additional specific component warranties (for example longer term warranties for station roofs)
and a ten-year warranty for specific systems elements.
• A payment mechanism that includes financial penalties to EGRT Construction if it fails to
meet performance requirements in the project agreement, such as requirements to effectively
manage traffic during construction or meet environmental requirements;
• EGRT Construction must substantially complete the Project by July 29, 2016 or be subject to a
financial penalty for every day of delay. Once the project has reached substantial
completion, it will be transferred to TransLink. TransLink is required to put the new line into
revenue service within one month of the transfer. TransLink will then operate and maintain the
Evergreen Line as part of the overall SkyTrain system.
Vancouver Evergreen Line
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Originally Posted by forouhar
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