Ottawa faces new lawsuit over light rail cancellation

Another company that was to help build and maintain Ottawa's cancelled north-south rail project is suing the city.

St. Lawrence Cement Inc.isseeking $40.5 million in damages for breach of contract, economic negligence, interference of economic interests and breach of duty of good faith, says the company's statement of claim.

Alternatively, it is asking the city for $31.7 million in compensation.

The company was to provide cement for the construction of the light rail line. Dufferin Construction Company, a division of St. Lawrence Cement, was a member of the Siemens-PCL/Dufferin consortium contracted to design, build and maintain the rail line for 15 years under a $778-million contract with the city.

The city already faces a $177-million lawsuit fromSiemens Canada and PCL Constructors, two other former light rail contractors. That means the total amount demanded from the city over the cancellation is more than$200million.

On Wednesday, Mayor Larry O'Brien confirmed that the city had received a letter from St. Lawrence Cement, but said it had not yet received the actual lawsuit.

"I guess well just have to see how that unfolds," O'Brien said.

The letter will have no effect on the city's plans to go forward with a different light rail plan, he said.

"There was a general belief in the last [cancelled] system that it wasnt quite right, that we werent getting our value and the services and the level of service we expected," he said.

Meanwhile, councillors such as Clive Doucet, a supporter of the cancelled project, said they're not surprised by the latest lawsuit.

"I said right at the beginning that this is going to cost us more not to build this project than it would have to build it," he said.

Developers in the city's south endwho counted on the light rail project going forward are also losing out, he said, along with those who signed memorandums of agreementto build the stations.

"It's a sad day for the city," he said.

The Siemens-PCL/Dufferin group'scontract was approved by city council under former mayor Bob Chiarelli in July 2006.

A new city council was elected in November, led byO'Brien, who opposed the project.In December, they voted to cancel the contract.

The 29.7-kilometre, 23-station rail line was to run north from Barrhaven to Lebreton Flats, then east through downtown to the University of Ottawa.

Siemens and PCL launched their lawsuit in June after the city turned down a proposed out-of-court settlement.