Winnipeg sends transit cash back to province

Manitoba is getting $2.2 million back froma City of Winnipeg account created to pay for the city's first rapid-transit corridor.

The cash comes from$493 millionset aside to complete theSouthwest Transitwayand widen thePembina Highway underpass at Jubilee Avenue.

Allthree levels ofgovernment contributed to the project, which was listed as $467 million before debt charges were included.Manitoba has paid four instalments of its share of the cost.

City councilfinance chair Scott Gillinghamsaidthe $2.2-million paybackisrelated to a request from the province to amend the funding agreement for the transit project.

"City administration, including legal services, reviewed the conditions and determined they were not acceptable and so returned the $2.2 million," the St. James councillor wrote in an email to CBC News.

Gillingham would not be more specific about what amendments the province was seeking on the funding agreement.

Through aspokesperson, Municipal RelationsMinister Jeff Wharton said the province is still in discussions with the city about amendments to theagreement, pointing to substantial savings madeafter thecontract forconstruction of the transit corridorwas signed.

"The total project cost has dropped by $180 million. The City continues to maintain a $69 million contingency allowance, which is not part of the contract, so it is offside the payment conditions," Wharton said.

The province said the federal government also amended its agreement with the city for the project after the costs dropped.

The city and provincehave been locked in a dispute over funding for variousconstruction projects, with Mayor Brian Bowman and his officialssaying there's a $40-million gap between cash promised and what's been received from the Progressive Conservative government under Premier Brian Pallister.

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The rapid transit project is 80 per cent complete, the latest city progress report says. It's slated to be finished in 2020.

Gillinghamtold CBC Newshe will askcity staff at an upcoming finance committee meeting for more details about what changes the province requested.

The progress report on the project says Winnipeg "no longer anticipates cost sharing with the Province of Manitoba related to operations and maintenance" of the transit line.