Calgary’s proposed Green Line light rapid-transit project is back on track, for the most part.

The city and province announced that they have agreed to allow construction to resume on the portion that extends from 4th Street S.E. near downtown to Shepard in southeast Calgary. In the meantime, engineering firm AECOM will devise a new section for the downtown with tracks to be at ground level or elevated.

The downtown section will link to other lines in the C-Train system across the city.

The Alberta government said it is recommitting its $1.5-billion share of the project that had a cost of $6.2 billion when Calgary’s city council voted in September to wind it down amid a dispute with province. The provincial government pulled its share of the funding due to concerns about the high cost and opposition to proposed tunnelling downtown to allow trains to run underground in that area.

Meanwhile, several announced and contemplated commercial real estate projects have been caught in the political crossfire. The projects include a new station and other proposed commercial real estate projects tied to the former Eau Claire Market site downtown.

The province has accused the city of turning the Green Line into a financial “boondoggle.” City council was told that the wind-down will cost $850 million on top of $1.3 billion already spent on setup costs that include land acquisition, bringing total expenses to $2.1 billion.

Bill Black, president and CEO of the Calgary Construction Association, welcomed the plan to revive the project.

“The Green Line LRT is essential not only for connecting hundreds of thousands of Calgarians but also for driving job creation and economic growth in our city,” said Black in a statement.

He had criticized politicians for delaying the project and contended that builders could choose to work on other developments that offer more financial security if the LRT line’s construction did not resume before December.

The province had instructed AECOM to complete it works by December and devise a new entire route. But it remains to be seen whether the firm will revise other sections outside of downtown.

According to Calgary Mayor Jyoti Gondek, the city is still going to wind down the original version of the Green Line .

“That project is over,” she told reporters. “That project was terminated on Sept. 3 when we heard from the province of Alberta that they didn’t wish to carry on with that alignment. This is a new project,” said Gondek.

Premier Danielle Smith and Transportation Minister Devin Dreeshen have accused Nenshi of botching the Green Line’s planning while he was Calgary’s mayor. Nenshi has responded by contending that Dreeshen turned the project into a political football and put jobs at risk.

Nenshi had fired back at the province, contending that it was erasing jobs and harming the economy. After the announcement on the project’s resumption, he said Smith and Dreeshen are trying to “solve a catastrophe of their own making.”

“They lit over $2 billion on fire, and now are desperately backing down, trying to save the Green Line that they killed,” Nenshi said in a statement.

He contended that the province’s mistakes will come at a significant cost.

“You can’t affirm contracts, then cancel them, then reinstate them without significant financial penalty,” he said. “The direct costs of this misadventure will likely total over $1 billion in penalties, and increase the cost of every provincial construction project for years to come due to new risk premiums.”

While the city has called on the province to take over the Green Line project, Smith has balked at that idea.

Rendering: Harvard Developments