TORONTO - Quebec's public pension fund said on Friday that its plan to build the world's third-largest light rail system in Montreal would cost more than expected and it had yet to secure the required funding from the federal government.

The Caisse de depot et placement du Quebec, Canada's second- biggest public pension fund, is planning to build a 67 km (42 miles) rail network that will link downtown Montreal with several suburbs and the city's airport. It plans to provide more than half the funding, with the rest coming from provincial and federal governments.

"There's a very important appetite to participate in the financing of this project. That being said, there's still work to be done with the governments of Quebec and Canada to finalize the details," said Caisse Chief Executive Michael Sabia.

The Caisse said on Friday that the cost of building the railroad had risen by $400 million to $5.9 billion to cover three additional stations.

The Caisse said it would increase its investment by $100 million to $3.1 billion, while Montreal's mayor said the city will invest $100 million. Talks with the federal and provincial governments over the remaining funding are ongoing.

Quebec's transport minister confirmed on Friday that the province planned to provide a yet-to-be-decided level of investment in the project and said talks with the federal government over the remaining investment were "going well."