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Commuters ride a TTC subway west from Kennedy Station in Scarborough on Sept. 25, 2013.Kevin Van Paassen/The Globe and Mail

The projected cost of redesigning Scarborough transit around a new subway extension continues to rise, even as the number of new riders the project will attract has plummeted, according to a number of reports released Tuesday.

The latest information on the controversial project puts its cost at $3.35-billion, provided city council follows the staff recommendation for a more expensive underground bus station option that would add $187-million. The whole project was priced at only $2-billion a year ago, when the plan to go from a three-stop to a one-stop subway emerged.

The growing subway cost reflects ongoing analysis and is likely to continue to change. A staff report said the final price is likely to be within 70 per cent and 150 per cent of the current estimate. Council will be asked in March to push the project forward, with a round of more detailed reports from staff expected late in 2018.

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Based on the most recent cost and ridership projections, the city will be spending approximately $1.45-million for each new rider the subway extension attracts.

"It's madness," said midtown Councillor Josh Matlow, who has long supported an LRT instead for Scarborough and argued Tuesday that Toronto has its priorities skewed. "It's clearly a reckless use of the limited tax dollars that the city has."

Asked whether Toronto Mayor John Tory felt it was worth spending so many to attract each new rider, his office sent a statement noting that the project had been supported by all three levels of government, and adding that the proposed station would be one of the busiest on the east-west subway line.

City staff are recommending the more expensive bus terminal, according to the reports released Tuesday, because they say it would help pedestrian access and free up more land for development.

Mr. Tory, who has backed this project since the 2014 mayoral campaign, rejected the suggestion that costs are ballooning. He argued the bus station is necessary, no matter what form of transit is built in Scarborough, and pointed out that the same reports also noted the possibility of cost savings. People understand how projects can change along the way, he said.

"When you're renovating your house, you stop along the way at different times and have meetings with the contractor," the mayor told reporters at an event in Scarborough, "and sort of say as the papers are drawn up, the design is put together, the budget is put together, are we going to change things, are we going to leave it the same, are we going to change the method of construction, are we going to add a new garage on, [should] we build that garage underground as opposed to above ground? This is what goes on every day."

At the same time, the usefulness of the subway proposal is going down. The latest figures show that, each day, the subway extension will attract only 2,300 people who had not previously been riding transit. This figure for new riders is roughly half the number estimated as recently as last summer.

Staff say that the drop is related to Mr. Tory's other transit plan – the adaptation of GO Transit known as Smart Track – which was also changed last year, having a ripple effect on Scarborough subway ridership.

Scarborough Councillor Glenn De Baeremaeker argued that the subway extension remains good value and that the costs, while high, are simply the price of doing business. He pledged to push to keep the final cost as low as possible, including by building a bare-bones station at Scarborough Town Centre.

"As much as I would like to build a Taj Mahal in Scarborough, I'm not going to," he said. "There's no blank cheque, but right now … we've got the money."

The rising cost does mean, though, that all but about $200-million from the original subway funding package is now spoken for. As a result, the Eglinton East LRT – which was supposed to be paid for entirely through the savings earned by switching from a three-stop to a one-stop subway extension in Scarborough – is barely 10 per cent funded.

Mr. De Baeremaeker said that he would "move heaven and earth" to make sure the Eglinton East LRT project gets built as well. He is optimistic that the federal government will come through with funding, a hope that Mr. Tory voiced as well.