* Caisse yet to secure agreements over government funding
* Total cost of project rises to C$5.9 billion
* Cost is C$400 million higher than previously thought
(Adds comment from Caisse CEO)
By Matt Scuffham
TORONTO, Nov 25 Quebec's public pension fund
said on Friday that its plan to build the world's third-largest
light rail system in Montreal would cost C$400 million ($296
million) more than expected and it had yet to secure the
required funding from the federal government.
The Caisse de depot et placement du Quebec, Canada's second-
biggest public pension fund, said on Friday that the cost of
building the railroad had risen to C$5.9 billion ($4.37 billion)
to cover three additional stations.
It is planning to build a 67 km (42 miles) rail network that
will link downtown Montreal with several suburbs and the city's
The Caisse said it would increase its investment by C$100
million to C$3.1 billion, while Montreal's mayor said the city
will invest C$100 million. Talks with the federal and provincial
governments over the remaining funding are continuing.
Quebec's transport minister confirmed on Friday the province
planned to provide a yet-to-be-decided level of investment in
the project and said talks with the federal government over the
remaining investment were "going well."
The fund plans to provide more than half the money with the
rest coming from provincial and federal governments.
"There's a very important appetite to participate in the
financing of this project. That being said, there's still work
to be done with the governments of Quebec and Canada to finalize
the details," said Caisse Chief Executive Michael Sabia.
Canada is planning to boost spending on infrastructure
projects by an extra C$81 billion in the next 12 years in a bid
to revitalize its economy and the Caisse project could be one of
the first to include investment from a new infrastructure bank
being set up by the country's Liberal government.
However, the project is different from many partnerships
between public and private investors because the Caisse is
taking on all of the construction and operational risk and will
own and operate the rail system once it is built.
The Caisse aims to get the first trains up and running by
2020 and, to do that, Sabia said the Caisse must secure
government funding in the next 4 1/2 months in order to start
the work next spring.
"We will need a final decision around the first or second
quarter so, calm down, it's not a crisis we're talking about
here," Sabia told reporters.
($1 = 1.35 Canadian dollars)
(Reporting by Matt Scuffham; Editing by Dan Grebler and Bill