Some two-and-a-half years after CDPQ announced – alongside its PPP partners the government of Québec and City of Montreal – plans to build a C$10 billion ($7.7 billion; €7.3 billion) extension to its Réseau Express Métropolitain light rail system into the eastern part of the city, the public pension plan has been booted from the project.
The municipal government of Montreal, alongside the ministry of transportation, the transport society of Montreal and the regional metropolitan transport authority, will in turn take over the construction of the 32-kilometre REM de l’Est project, which would integrate 23 stations.
It is unclear whether the project will forever remain under public control. A C$100 million payout has been made to CDPQ to reimburse it for the expenses it incurred while commissioning studies for the project, CDPQ told Infrastructure Investor.
While CDPQ was praised by the premier of Québec François Legault for the “colossal work” it had done so far, Legault added in a statement: “However, there remains a lack of social acceptability for certain sections, despite the many initiatives put forward in recent months.”
Dead in its tracks?
Problems first arose with CDPQ’s involvement in the project when citizens expressed concerns over the firm’s initial design for the project, which would supposedly block views of Chinatown from the north and views of the waterfront along Notre-Dame Street. The public also expressed concern that elevated tracks would cover the densely populated residential neighbourhoods in Ville-Marie and Mercier–Hochelaga-Maisonneuve.
Harout Chitilian, vice-president of corporate affairs, development and strategy at CDPQ Infra, told Infrastructure Investor: “The report of the multidisciplinary committee of experts on the architecture and urban integration of the REM de l’Est, submitted last March following some 150 hours of meetings with the project team, showed that more than 80 percent of the committee’s recommendations were integrated into the project planning.”
He continued: “Several important changes to the original project were made in response to concerns expressed by the public and stakeholders, including a station and a tunnel route in the downtown area; a tunnel route in the northeast section; the adoption of an alternative route to Sherbrooke Street East on Souligny Avenue; and a series of measures adopted to protect and enhance Morgan Park.”
Despite reworking its proposal, CDPQ was not able to win the public’s favour, nor that of Valérie Plante, mayor of Montreal.
“The leadership that the City of Montreal and the Government of Québec are taking today makes it possible to present a solution to the issues of social acceptability that threatened the project,” she said in a statement. “We are taking the means to carry out the REM de l’Est in an exemplary manner, as citizens and experts demand of us.”
This ignited a war of words, with Charles Emond, president of CDPQ, telling a committee hearing in the National Assembly of Québec: “[Mayor Plante] was delighted with the proposal. Ten days later, she calls the government to say she wants a new project. The government told me it didn’t think the Caisse would be a part of it. [They] told me: ‘That’s the end of the REM de l’Est,’” according to comments reported by the Montreal Gazette.
Chitilian added that CDPQ was always beholden to decisions by the Montreal authorities. “The decisions regarding the successive project milestones of REM de l’Est developed by CDPQ Infra were always the prerogative of the Québec government – and subject to support from the City of Montreal.”
CDPQ continues to build out the original C$6.9 billion REM project consisting of 67 kilometres of rail lines crossing Montreal. Construction of REM experienced delays as a result of border restrictions and closures affecting the supply of certain materials and the mobility of skilled labour. Work is now expected to be completed in 2024, with construction having initially begun in 2018.
The loss of Rem de l’Est will be somewhat of a setback as CDPQ looks to double its infrastructure portfolio from 2020 levels by 2025. Despite this, the pension has this year alone made major investments in US offshore wind and green hydrogen.