The consortium building the city's $2.1-billion light rail system doesn't believe it's responsible for a sinkhole that swallowed a portion of Rideau Street in June 2016, precipitating a six-month delay of the project and costing the city an estimated $10 million.

At the first of its monthly LRT project updates Tuesday, the city's finance and economic development committee heard Rideau Transit Group (RTG) doesn't think it should pay the costs associated with the sinkhole.

Obviously, we have an opinion that it's a result of RTG and they have to take that responsibility... - Mayor Jim Watson

RTG has submitted something called a "relief event notice" for the sinkhole, along with a corresponding "delay event notice." They indicate the consortium believes the delay was not its fault, and shouldn't have to pay associated costs.

However according to a report commissioned by the city and released last year, while the precise cause of the sinkhole wasn't clear, the dramatic event wasn't the city's fault either.

RTG is apparently disputing that finding. It has not yet filed a formal complaint under the contract's dispute resolution process, and disagreements over costs are expected to be dealt with only after the project is completed.

Mayor remains confident

Mayor Jim Watson said he's still confident the city will recoup all the costs associated with the delay to the Confederation Line.

"I think that's to be expected — they'll take one position, we'll take another position," he told reporters after Tuesday's meeting.

"Obviously, we have an opinion that it's a result of RTG and they have to take that responsibility because that slowed them down and they're not meeting the date they gave us."

The city's senior staff reiterated Tuesday that it's possible cost disputes could end up in court, but because the city and RTG have a 30-year relationship — the consortium will service the LRT system for the next three decades, and provide 38 trains, as well as other work, for the Stage 2 — staff believe there is goodwill on both sides to come to a fair settlement.

Delay to cost city more than $10M

The LRT was supposed to be handed over to the city on May 24, but last month the city announced a new delivery date of Nov. 2.

The city has said the delay is costing it $2 million a month in expenses for things like running detours and keeping buses — and drivers — on the road longer than expected.

On Tuesday, the committee heard that those extra costs include OC Transpo losing out on $1.6 million in additional fare revenue it was counting on once the LRT was running.