McGuinty
government presses its challenge of proposed 407 toll increase
ANNOUNCES INTENTION TO INVOKE DISPUTE RESOLUTION UNDER AGREEMENT
TORONTO, Jan. 9 /CNW/ - The McGuinty government is standing firm against
the proposed toll increase on Highway 407. The province has notified 407 ETR
that it intends to invoke the dispute resolution provisions of the Concession
and Ground Lease Agreement (CGLA) to resolve the dispute with 407 ETR as to
whether an increase in tolls requires provincial approval through the Change
Request process in the concession agreement.
"We are absolutely determined to do everything possible to protect
Ontarians by requiring 407 ETR, for the first time, to honour all of its
obligations under the contract - as we've said, we will avail ourselves of
every legal avenue under the agreement to do just that," said Transportation
Minister Harinder Takhar. "Our position is clear: in proposing a toll increase
without obtaining government approval, 407 ETR is not complying with its
contractual obligations. And we are moving to dispute resolution to settle
this issue."
In addition, the province has advised the company that, in its opinion,
if 407 ETR proceeds to increase tolls without complying with the Change
Request provisions of the agreement, it would be in default of the agreement.
The dispute resolution process will include:
- Negotiations between representatives of the province and 407 ETR.
- If a settlement cannot be reached, then negotiations would be
conducted by the Minister or his designee and the President of the
Company.
- If a settlement still cannot be reached, a mutually agreed mediator
would be appointed to facilitate negotiations.
- Failing these steps, the province could proceed to formal arbitration
with the company, conducted by an appointed arbitrator. Decisions
reached by the arbitrator would be binding except on points of law and
other defined circumstances.
The province has also notified 407 ETR that in April 2004, it will
exercise its rights to re-negotiate the Tolling, Congestion Relief and
Expansion Agreement (TCREA) to more fully achieve the agreement's purposes.
Because of the impending TCREA re-negotiation, it is the province's position
that it is inappropriate for 407 ETR to initiate any changes to tolls or
administration fees at this time.
In December 2003, the province advised 407 ETR that it was not authorized
to change tolls without an approved Change Request, outlined in the Concession
and Ground Lease Agreement. The company disagreed, arguing that it did not
require prior approval to change tolls.
