Moving slowly ahead on the southeast LRT, but how to pay for it?

Low-floor cars will be used on the proposed downtown LRT line.

EDMONTON - The push to build the southeast LRT line received a nudge forward Tuesday as a council committee wrestled with the $1.8-billion question surrounding the project: How to foot the bill for the 13-kilometre route?

To officially launch that quest for money, council’s transportation and infrastructure committee asked staff to create a “capital profile” for the line. If approved, that document detailing the project would make the southeastern line an official part of the city’s capital plan, said chief financial officer Lorna Rosen. It would also describe potential methods of paying for the route.

“What it does is it sends a strong signal and says council is very supportive of this project,” Rosen said. “It says council is willing to commit and is looking for a similar commitment from other levels of government.”

The southeast leg of the LRT connecting the city centre to Mill Woods Town Centre is part of the city’s ambitious long-range transit plan that includes routes to the west side and north end. An extension to NAIT is to be completed by 2014.

Council already endorsed the route for the southeastern leg and agreed to pay for preliminary engineering and some land purchases.

To proceed further, however, the provincial and federal governments need to pick up about $1 billion of the costs, councillors said Tuesday. That would leave the city to find $800 million through methods such as borrowing, tax increases or other funding already provided by the province and federal government.

One option under consideration is a public-private partnership, commonly referred to as a P3.

In a P3, a government hires a private company to build and maintain a project, then pays for that project over the term of the contract, usually several decades. The Alberta government used a P3 to build Anthony Henday Drive. It also is building several schools with that same model.

The city has never built anything using a P3. But councillors said it is something they would consider, particularly given a $1.2-billion federal fund available called PPP Canada, which was set up to support P3 projects. Applications for that funding are due by June, which is one reason why the committee backed creating the official project description.

“I think it’s worth exploring for some aspects of the LRT,” said committee chairman, Coun. Don Iveson. “I wouldn’t be comfortable handing over the whole system to a third party, but involving a partner in aspects of the maintenance, long-term leasing of the vehicles and refurbishment, there may be some real advantages.”

City staff are expected to bring a capital profile for the LRT to the committee at the end of April.