Light rail contract should pay off for taxpayers

Posted Feb 16, 2012 By EMC News

Ottawa taxpayers are about to invest $2.1 billion in light rail.

For all that cash, it would be nice to see benefits beyond rails and stations.

City council cannot build in contract provisions that see the light-rail builders required to buy supplies locally and use local service providers because of the provincial Discriminatory Business Practice Act.

Requiring local purchasing could benefit the local economy, and in a cycle of spending, would provide spin-off benefits to the taxpayers footing the bill.

The potential opportunities are staggering. While Ottawa may not be home to the steel mills needed to forge the actual rails, local companies could provide legal and financial services, supply electrical systems and install them, and pour the concrete for tunnels and overpasses. Each of those local companies would in turn need to contract with local services and suppliers.

And this is no fly-by-night project. The light-rail system will take years to build, meaning the jobs and investment would be around for a considerable period of time.

While the province bars any contract provision that discriminates based on the "geographic location" of a business, the city is trying to get local companies linked up with the light-rail consortia.

The city took a first step in the right direction by organizing a trade show on Feb. 9 so local businesses could meet with the companies most likely to carry out construction.

Coun. Steve Desroches said the city was acting as "matchmaker" between the sellers and buyers.

With more than $2 billion on the line, a more formal process is needed if we don't want most of the spending to head out of town on a rail.

If there are no contractual requirements to "buy local," you can be sure the winning bidders will try and maximize their profits by buying the least expensive goods possible. That may mean companies from elsewhere in Canada, or internationally, will receive cheques while local businesses are left behind at the station, so to speak.

If we can't write a requirement into the contract, the city can make its preferences clearly known to the winning bidders.

No one is advocating "buy local" at any cost, but if an Ottawa-based supplier can come close - say within 10 per cent of the outsider's price - then the rail contractors should play favourites and purchase the local goods or services.

The city needs to sign, seal and deliver a contract that pays off for the winning bidders and pays off for taxpayers too.