[crs1026]

I don't think this has been posted here before:

https://buyandsell.gc.ca/cds/public/2022/03/09/2af08443ae81fcea5940d166dc898c3e/ABES.PROD.PW__NB.B003.E81058.ATTA001.PDF

From the fed's buy and sell website.

Table of contents:

View attachment 390772

Parts of this had come out earlier, but this is the first time that some of us had the opportunity to read it end to end.

The big takeaways for me are
-— it pretty much signals the end of VIA Rail Canada as the integrated national operating entity we have known to date. The ”partner” will take over most of the key corporate functions including marketing and ticketing, and the maintenance and operating operations. There’s not a lot left for VIA to do as a separate operator, and there’s no business case for maintaining two parallel organizations. This change may signal the beginning of the end for longer distance services. How the “partner” would share operating facilities with a long distance train operator would be interesting.
- it’s a boil-the-ocean approach where a no-frills system could be put in place a lot more expeditiously without all the existential deliberations. Clearly government doesn’t want to be accused of overlooking anything. Some good ideas might come out of this - eg transit oriented development is mentioned - but it’s open season for scope creep and revenue mining by consultants, and at the expense of taking much longer to get the basic things done.
- no shovels in the ground before 2026…. and only if procurement stays on schedule… does that ever happen?

Quite ironic that VIA set out to propose a modest system that government would be able to swallow with minimum sticker shock, and now we are going down a much more elaborate route.

- Paul

 

[SaugeenJunction]

New fleet testing in Quebec City:

https://twitter.com/x/status/1511882764957757447

 

[kEiThZ]

-— it pretty much signals the end of VIA Rail Canada as the integrated national operating entity we have known to date. The ”partner” will take over most of the key corporate functions including marketing and ticketing, and the maintenance and operating operations. There’s not a lot left for VIA to do as a separate operator, and there’s no business case for maintaining two parallel organizations.

I was under the impression, these arrangements are for the corridor?

Some good ideas might come out of this - eg transit oriented development is mentioned - but it’s open season for scope creep and revenue mining by consultants, and at the expense of taking much longer to get the basic things done.

Yeah. I'm left wondering what the point of the CIB is. Seems all they do is add consultant bills instead of moving to deliver.

 

[crs1026]

I was under the impression, these arrangements are for the corridor?

True, and that’s the thing. The “partner” will assume the ticketing infrastructure, reservation computer and the associated financial systems. And the marketing function. And operations, and maintenance. They will want their own legal and government relations functions. It seems the contract is with Canada, not with VIA Rail, after all.
That’s pretty much the entire VIA organization chart.
The non-corridor operation (Canadian, Ocean, and remote services) can’t support much of a separate head office - too many overheads for their share of VIa’s revenue, and inevitably duplication of functions and associated head count. Perhaps they will buy services from the “partner” under some sort of fee-for-service arrangement. Or from someone else.
In effect, the corporate functions for the LD and corridor sides of the business are being segregated and contracted out.
I am assuming that Canada will retain title to all the real property…. with the “open to ideas” mentality shown in the RFI, it’s possible that some joint ventures could emerge to develop station sites especially in the major cities. That’s a really good idea, provided that Ottawa doesn’t give away the ship and let all the profits go to the developer. But (as both Toronto and Ontario land management demonstrate) the control of such development proposals will shift to any number of ministries and public agencies who have a mandate to manage public land. It’s not a core business function for VIA or HFR, so that may be just fine….but the rail pax entity ends up being a tenant where today they are the landlord. And the business becomes more complicated with more players. The good thing about VIa is, it’s a single integrated shop for all this.
(Amtrak has similar dynamics with its need to split Corridors especially NEC from its long distance business, but only went this far once with its internal organization… and that didn’t last).
I’m not saying it’s a bad thing, but the degree of change proposed needs to be brought out into plain view and recognized. The Minister‘s comments express his confidence in VIA, but the RFI makes that sound more like an obituary than a mandate. People say the nicest thing at retirement functions.

- Paul

 

[Allandale25]

https://twitter.com/x/status/1512044722726051844

 

[Bordercollie]

https://twitter.com/x/status/1512044722726051844

So clearly the driver had the ability to stop but chose not to. He slowed down because he saw that the gates are down.

Sure you could make it safer but in the end the driver decided their own fate.

 

[Darwinkgo]

That’s a really good idea, provided that Ottawa doesn’t give away the ship and let all the profits go to the developer.

That is all in the measuring ... Are you measuring at the time of development, or versus a P3 that didn't include real estate elements and what the cost would be to government of that P3.

Because it could appear that all profit is going to the P3 partner, but the government gave them less subsidy, and the partner is providing much higher service levels which enables much more valuable real estate development. How would you account for that?

You can see how easily it becomes complicated as a dynamic system, and a matter of spin for opponents and proponents.

That’s pretty much the entire VIA organization chart.

Somewhat. VIA shrinks to a infrastructure and service procurer, versus an infrastructure and service deliverer. Nothing wrong with that, as long as the P3 involves transferring the organization whole to VIA at the end of the term, and then the proponent can bid again to lease and operate (against other bidders), or the government/VIA can resume direct management. Arrangements like that are nothing new in the P3 world.

 

[Allandale25]

There are eight (8) VIA Rail references in the federal 2022 budget:

Pg 81 -

Pg 86 -

Pg 231 -

 

[Allandale25]

https://www.cbc.ca/news/canada/ottawa/federal-pledge-budget-toronto-ottawa-montreal-windsor-quebec-high-frequency-rail-1.6412201

 

[Northern Light]

https://www.cbc.ca/news/canada/ottawa/federal-pledge-budget-toronto-ottawa-montreal-windsor-quebec-high-frequency-rail-1.6412201

They key bits from the above:

 

[cplchanb]

They key bits from the above:

View attachment 391039

So $400M to start the design of HFR.... anyone in the industry know if that is a reasonable cost estimate?

 

[crs1026]

That $74M - $323M is followed by $0 in the following year.

Recall that the last budget set the amount at $396M over 6 years.

One wonders what changed.

- Paul

 

[Allandale25]

^ And for those who like visuals, below is a side-by-side comparison. @crs1026 any speculation on why the money in 2022 is mostly being spent in 2023-2024 instead of being more spread out? Does that fiscal year relate to the procurement schedule (picture below)?

 

[kEiThZ]

That $74M - $323M is followed by $0 in the following year.

Recall that the last budget set the amount at $396M over 6 years.

One wonders what changed.

Lines up with contract award that fiscal year. So at that point, not "Next steps" any more.

Again I ask. What the hell have they been doing all these years that they need another 2 years and another $400M in planning and design?

 

[crs1026]

My theory is, it's land/track acquisition.

Can't be design work, or de-risking site preparation a la Metrolinx, because a) work can't be jumpstarted at that magnitude and b) the plan calls for a 3-year "co-development phase" from 2023 to 2026. Can't design and build something you haven't written the specs for yet.

Could be some sort of down payment to the successful bidder, perhaps, or royalties to somebody important to the deal (FN?) but the deal isn't final until much later.

Another possibility is that 2024 is when the CIB either starts funding things, or declines. So Treasury funds aren't required after that date, and this preserves what was set aside last year.

- Paul