MAYOR Sam Katz said yesterday the hidden cost of snazzy new buses for the city's long-planned rapid transit system has left him skeptical about the project.

Work on the $50-million system connecting the downtown to the University of Manitoba was supposed to begin next spring, but Katz has thrown that plan into doubt, saying he fears the combination of bus-only diamond lanes and dedicated bus corridors may not be the best way to spend city money.

Katz said the $50-million price tag doesn't cover the cost of new buses. That would be an additional $20 million for about 20 new buses, according to city transit staff.

Councillors championing rapid transit say $20 million is small potatoes when the benefits of a speedy bus system are considered.

Rejecting the plan could jeopardize millions in federal funding and leave the city with a backward, unpopular transit system and even busier car traffic, they say.

Katz's position on rapid transit has been difficult to pin down. He has said he supports a rapid transit system. He has said he supports a rapid transit system, but then raised concerns about the specifics of the city's proposal for dedicated bus corridors.

Katz, who as briefed recently by city staff on the rapid transit plan, said he will make his final decision "in the near future."

For the first time, though, he detailed his concerns in an interview with the Free Press.

"It was one of those agony-ecstasy briefings," said Katz. "I wish I could go back many years ago to when (former mayor) Steve Juba was here and wanted to do the monorail and he'd been able to accomplish that."

Katz said he is now more comfortable with the idea of high-speed buses as opposed to a monorail or light-rail system, in part because other cities such as North York and Edmonton are also exploring state-of-the-art bus corridors.

The city has largely rejected the notion of a rail system because rail works best and is most cost-effective in high density areas like downtown Toronto. Any rail system in Winnipeg would require feeder buses to carry people from the suburbs to the train stations, and that wouldn't necessarily boost ridership.

"People hate transferring, especially in our climate," said Bill Menzies, transit's planning manager.

Katz also said he worries the city will spend millions building the first phase of the dedicated bus system — from the Main Street bridge, through the old Fort Rouge rail yards and down to the Pembina Highway/Jubilee Avenue interchange — when it won't really relieve congestion unless the dedicated busway is extended alongside Pembina to the U of M.

Now, the $50 million covers the cost of diamond lanes down Pembina from the Jubilee interchange to the U of M, a good stop-gap measure, until, under Phase 2, the city can build a separate corridor down an old railway property that runs next to Pembina. That would cost and extra $40 million.

"I'm not ecstatic about it because Phase 1 doesn't really accomplish much without Phase 2," said Katz. "There's no point digging a foundation for the house if you can't pay for the rest of the house."

Menzies said the first phase of the dedicated corridor, from Main Street to Jubilee, would bypass some of the worst commuter congestion through Osborne Village and Confusion Corner.

The transit corridor could ultimately link the University of Manitoba with the University of Winnipeg, with stops all down Pembina Highway and throughout the downtown. the long-term plan is to have several more lines connect suburbs such as Transcona and North Kildonan to the downtown.

Thanks in part to a multimillion-dollar federal/provincial infrastructure deal announced in March, the first leg to the U of M was supposed to be built by September 2007.

The buses, which will be built by Winnipeg-based New Flyer Industries, will run at 80 km/h along dedicated high-speed corridors or along diamond lanes on existing roadways. They will also use new on-board communications technology to "talk" to traffic lights and alert passengers to upcoming stops, bus schedules and transfer information.

Once built, proponents say the first leg will boost ridership, cut travel times almost in half, ease traffic congestion and spawn housing and commercial development along the now unused rail yards in Fort Garry.

Couns. Jenny Gerbasi, Donald Benham and John Angus, all advocates of rapid transit, said Katz's concerns about bus costs and phased-in building should not scuttle the proposal.

Benham said one of the selling points of bus rapid transit is that it's designed to use regular buses that can pop into the high-speed corridors," said Benham. "Is that ideal? No, its like putting old wine in new bottles... We should find the $20 (for new buses)" that would help attract riders.

Replacement buses cost about $700,000 each. The hybrid gas-electric New Flyer buses would be worth $1 million, largely because of their hydrogen fuel cell technology.

Gerbasi said all first-tier cities in Canada have some form of rapid transit and all were built in phases as cities cobbled together enough money. She disputed the suggestion that rapid transit may not make good economic sense.

"The cost-benefit analysis is extremely good, better than many projects such as the Kenaston underpass," said Gerbasi.

Menzies said their cost-benefit analsys predicts that for every dollar the city spends on the completed southwest corridor, $2.10 will flow into the local economy in the form of shorter commuter times for drivers and transit users, lower emissions, few er car accidents and increased revenues from bus fares.

Angus noted there will be spinoff effects as well such as new housing starts around the now-abandoned Fort Garry rail yards, New Flyer jobs and construction work.

He also said the city is exploring the possibility the federal government might chip in for the cost of the new buses.

Angus, until recently the chairman of the public works committee, said he didn't think the rapid transit proposal was in danger of extinction, especially when huge projects such as the human rights museum and the new Manitoba Hydro tower are only going to boost downtown commuter congestion.

"It would be foolish when we've got two-thirds of the money committed from other levels of government," said Angus.