TOK Transit’s 2015 lawsuit against RMWB results in ‘amicable settlement’

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The Regional Municipality of Wood Buffalo has settled a lawsuit filed in 2015 by TOK Transit, the former transit operator in the Fort McMurray Wood Buffalo area.

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The Ontario-based company sued after the RMWB canceled its 15-year contract in February 2015, less than two years after the contract began. The municipality justified the cancellation by a 90-day escape clause in the contract.

TOK began operating transit services in July 2013 after responding to a tendering process that began in the fall of 2012. The company was tasked to replace Diversified, which operated transit in common in the RMWB until June 2013 in addition to bus services to oil sands operations.

With council support, the municipality decided to run transit in-house after an October 2014 audit of all third-party contracts concluded that TOK had failed to meet performance targets. These included a high number of public complaints about journey times and quality of service, concerns about staffing levels and delays in setting up real-time bus tracking and a temporary bus shelter .

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Mayor Melissa Blake and councilors Tyran Ault, Guy Boutilier and Sheldon Germain called the audit findings alarming after they were presented.

At the meeting, Ajay Mehra, COO of TOK Transit at the time, attributed the problems to “growing pains”. He said many of the audit’s criticisms had been addressed and blamed the time delays on traffic conditions which had eased when the report was presented.

TOK argued in its lawsuit that the audit findings were “incorrect, incomplete and misleading”. The company said their relationship with the RMWB deteriorated after the 2013 municipal elections, and that “the attitude of the municipality… has changed and has been replaced by a lack of cooperation.

TOK also said delays in the bus installation and bus tracking program were caused by municipal change orders and delays in the approval of a municipal budget.

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The lawsuit was filed in the Court of King’s Bench in April 2015. It demanded an injunction against the RMWB, $50 million in general damage$67.3 million in damage resulting from breach contract and $22.9 million in debt.

A joint statement sent by Mehra, who is now CEO, on September 6 confirmed that a settlement had been reached in November 2021. Details of the agreement were not released, but a joint statement described the settlement as an amicable solution. ”

“RMWB’s decision was based exclusively on internal considerations and was not the result of any performance issues or shortcomings on the part of TOK,” the statement said. “TOK remains eligible to participate in any future tendering opportunities or participation in requests for proposals that may be issued by the MRWB for the provision of public transport services.”

Representatives of Tok Transit and the municipality declined to comment beyond the statement.

-with files from Andrew Bates and Tyler King

[email protected]

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