W. K. Lis
Superstar
When the first New York City subway opened in 1904, it was the city that built and owned the tunnels, but the private IRT leased the tunnels and operated the trains.
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bloor_christie
New Member
For those still against privatization - click on EACH link below and you will see how many European and Asian systems are operated AND are owned by these private firms.
It's time to evolve here people - this isn't the 60 and 70s anymore - our governments cannot afford to build and properly run transit systems.
Everyone complains about the 407, but ridership increases every single year - despite tolls that keep going up! People in the GTA want to pay for premium service instead of taking the free alternative. The 407 has widened the road by adding more lanes to keep their customers happy - and it's cost the taxpayer $0.00!
There is a strong market in the GTA that wants new private systems. People will pay a premium for reliable and efficient alternatives to the TTC, MT, YRT, etc... Stop living in the past! It's time to allow privatization in Toronto ASAP.
It's time to evolve here people - this isn't the 60 and 70s anymore - our governments cannot afford to build and properly run transit systems.
Everyone complains about the 407, but ridership increases every single year - despite tolls that keep going up! People in the GTA want to pay for premium service instead of taking the free alternative. The 407 has widened the road by adding more lanes to keep their customers happy - and it's cost the taxpayer $0.00!
There is a strong market in the GTA that wants new private systems. People will pay a premium for reliable and efficient alternatives to the TTC, MT, YRT, etc... Stop living in the past! It's time to allow privatization in Toronto ASAP.
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Rainforest
Senior Member
I would consider allowing private operators to run their own bus routes in Toronto, in addition to TTC buses. If they find a pool of passengers who are willing to pay premium fare and make the service viable (but without public subsidy) - why not. That might take a bit of revenue away from TTC, but then, it could slightly reduce the crowding.
At the same time, I see no point in privatizing the existing bus network, or the subway system. The Hwy 407 owners must keep their customers happy, or else the customers will use parallel toll-free roads. Whoever owns the Yonge subway, is not really forced to keep customers happy, since the customers have no viable alternatives. So, I don't see how privatization would improve performance.
At the same time, I see no point in privatizing the existing bus network, or the subway system. The Hwy 407 owners must keep their customers happy, or else the customers will use parallel toll-free roads. Whoever owns the Yonge subway, is not really forced to keep customers happy, since the customers have no viable alternatives. So, I don't see how privatization would improve performance.
kEiThZ
Superstar
Bloor_christie,
Many of those systems you listed are privately operated. They are not privately owned. There's a big difference between the two. Most of us can support the former. It's the latter that we have issue with.
And it's not so much that I have some qualm about private ownership, insomuch as there does not seem to be private sector operators that want to undertake transit projects without some kind of government subsidy or effort.
Look at the 407. A private company only took it over after the government built it. There was no private corporation clamouring to build the expressway itself. There was no company going out and acquiring property, pushing the EAs, etc. Private industry merely seems to want to take over after all the hard work is done.
Blue 22 is another good example. The Blue 22 consortium was not willing to put forward their own capital to refurbish the rail corridor. They wanted the government to pay for that. They only want to buy the coaches and run the service.
While there's room for private sector involvement in bus operations (VIVA shows that), the above examples show that there's very little interest in the private sector to get involved in capital intensive operations like building rail lines, subways or highways.
I have no issue with private sector involvement. But I don't want the taxpayer giving them sweetheart deals. If they can run transit better than the TTC, let them put up their proposal and you'll find the public will support them. But if they want to build a rail line, let them pay for it. Why should my tax dollars go towards a capital project where the benefits accrue entirely to a private corporation?
It's one thing to charter a private company to run a service. It's a different matter altogether to invest billions of taxpayer dollars to develop the capital base of a private corporation.
Many of those systems you listed are privately operated. They are not privately owned. There's a big difference between the two. Most of us can support the former. It's the latter that we have issue with.
And it's not so much that I have some qualm about private ownership, insomuch as there does not seem to be private sector operators that want to undertake transit projects without some kind of government subsidy or effort.
Look at the 407. A private company only took it over after the government built it. There was no private corporation clamouring to build the expressway itself. There was no company going out and acquiring property, pushing the EAs, etc. Private industry merely seems to want to take over after all the hard work is done.
Blue 22 is another good example. The Blue 22 consortium was not willing to put forward their own capital to refurbish the rail corridor. They wanted the government to pay for that. They only want to buy the coaches and run the service.
While there's room for private sector involvement in bus operations (VIVA shows that), the above examples show that there's very little interest in the private sector to get involved in capital intensive operations like building rail lines, subways or highways.
I have no issue with private sector involvement. But I don't want the taxpayer giving them sweetheart deals. If they can run transit better than the TTC, let them put up their proposal and you'll find the public will support them. But if they want to build a rail line, let them pay for it. Why should my tax dollars go towards a capital project where the benefits accrue entirely to a private corporation?
It's one thing to charter a private company to run a service. It's a different matter altogether to invest billions of taxpayer dollars to develop the capital base of a private corporation.
urbanfan89
Active Member
We are not in the 80s either, and private enterprise does not know best and will not act in the public interest when a natural monopoly is involved. When it comes to capital intensive infrastructure projects, the private sector tends to wait until the government spends billions to build the infrastructure, and then simply hand over it to the private sector for a pittance because some politicians are dogmatic about it. Then if the operations do not turn a profit, the private company demands a subsidy because *now* it's a public service. Result: taxpayers pay more and receive poorer service. Just ask any British rail user who now pays soaring rail fares, pays soaring tax subsidies, yet receives stagnating service. Just last month the British Government bailed out a major rail line because the private operator simply walked away from the contract. If the executives of a listed company acted in this manner with company assets, they would be facing prosecution and civil suits from shareholders.
We have discovered, at the cost of trillions of dollars worldwide, that letting people shuffle numbers on computer servers without anyone watching is a recipe for disaster. Letting the private sector do whatever it wants to taxpayer-provided infrastructure is even more so. Many people have discovered that privatizing public services are not what it's cracked up to be. Those who continue to push for privatizing everything in a time like this are the real ones living in the past.
We have discovered, at the cost of trillions of dollars worldwide, that letting people shuffle numbers on computer servers without anyone watching is a recipe for disaster. Letting the private sector do whatever it wants to taxpayer-provided infrastructure is even more so. Many people have discovered that privatizing public services are not what it's cracked up to be. Those who continue to push for privatizing everything in a time like this are the real ones living in the past.
jn_12
Senior Member
^ I'm not an advocate of privatization whatsoever, but rail ridership in Britain skyrocketed after they privatized the rail lines.\
(my apologies about the size of the graph... not sure how to make it smaller. Perhaps a mod can resize it for me. Thanks.)
I know there's probably more to it than to say that privatization was the catalyst, but the huge amount of growth that coincided with it is pretty amazing. Is there anything to learn from them? I've used various British rail services a few times (London to Edinburgh, Edinburgh to Liverpool, Liverpool to London) and all of the service was fantastic. Compared to what we pay for our train tickets, I'd say their service/prices can be really good depending on where you're going.
(my apologies about the size of the graph... not sure how to make it smaller. Perhaps a mod can resize it for me. Thanks.)
I know there's probably more to it than to say that privatization was the catalyst, but the huge amount of growth that coincided with it is pretty amazing. Is there anything to learn from them? I've used various British rail services a few times (London to Edinburgh, Edinburgh to Liverpool, Liverpool to London) and all of the service was fantastic. Compared to what we pay for our train tickets, I'd say their service/prices can be really good depending on where you're going.
scarberiankhatru
Senior Member
How much of Britain's recent rail passenger growth might be due to people moving beyond exurbia and then commuting in to London (or wherever)?
waterloowarrior
Senior Member
Private financing and/or ownership of infrastructure hasn't turned out too well in some cases... look at what happened in the UK and some of the disasters in Australia (look up the Airport Link toll road and Sydney's Cross City Tunnel), although in some cases its because of their financing structure. Plus for pure privatization you'd need to give them the power to expropriate, otherwise building a new streetcar line on city streets or building a new highway would be next to impossible without government involvement (I think the rail companies have some expropriation powers right now). I believe the government can also borrow money cheaper than the private sector for large projects. I think in most developed countries the ownership of the infrastructure (i.e. roads and train lines) is with the public sector or a public sector company, even the UK sort of renationalized its rail infrastructure... things like the 407 are leased and regulated, not purely private, although for train lines its different in North America
On the other hand there are also successful examples of PPPs, I think the Canada Line is fairly successful so far and has reduced costs for the government and shifted the construction cost-overrun risk to the private sector, and there are lots of toll bridge PPPs out there. In general it's a good idea to maintain appropriate public control/regulation of infrastructure, avoid unrealistic expectations of the private sector, plan for worst-case scenarios and to not sign any dumb contracts like 99 year leases. In general transportation in all forms will probably always be "subsidized" for many reasons (equity, economic/trade, facilitating interaction etc), however there are definitely ways to reduce the burden on taxpayers/municipalities and improve efficiency by involving the private sector.
Deregulation of local transit operations as proposed by bloor_christie might not be a good idea, based on what happened in the UK (outside of London) local bus system... (as an aside, in that deregulated system the government will fund/tender the non-commercially viable "socially necessary" routes, about 20% of routes/service). I'd like to see some deregulation of intercity bus services or at least a rethinking of the current system (which I think is based on franchises?). Not sure about suburban/commuter rail, but the current model seems to work fairly well and has been making significant improvements, although there is a need for a dependable source of capital funding (tolls, GTA sales tax?).
One possible idea for the GTA would be to move to a Scandinavian model. Metrolinx would take over the planning of all services, create a unified fare system/brand, and would be in charge of tendering routes (not every route would necessarily be tendered, e.g. perhaps they'd want to keep the Yonge subway for themselves/TTC). Maintenance/fleet management could potentially be part of the contract, or could be done separately.
The contracts could be based on the lowest cost for providing transit services (based on guidelines/service requirements in the contract). Metrolinx would keep all fare revenues, although it could potentially use some of the revenue as incentives in the contract to maintain quality service (there would also be penalties for not meeting service standards). Alternatively you can set a price you want to pay and go with the bid that provides the best service for that price (or do a combination of price-quality)
Some routes would be profitable for Metrolinx (i.e. fare revenue generated would be higher than the cost of paying the operator to run the route), others wouldn't. Overall Metrolinx would likely not be profitable, but its costs would be reduced through competition (e.g. In Stockholm this led to a 20% cost reduction while service increased.. it also decreased the subsidy needed for transit, saving the region hundreds of millions).
I don't know that the net cost models that have the private sector collecting the fares and paying for most costs (can have a base subsidy from the government) are always a good idea... there are many instances where the private sector company ends up trying to abandon the route or get a bail-out because revenues are less than expected. Theoretically these models are supposed to shift the risk to the private sector, however in many cases like urbanfan89 noted the government ends up paying in the end.
The TTC would compete with private bus companies for route contracts across the GTA, or it could potentially be sold off.
On the other hand there are also successful examples of PPPs, I think the Canada Line is fairly successful so far and has reduced costs for the government and shifted the construction cost-overrun risk to the private sector, and there are lots of toll bridge PPPs out there. In general it's a good idea to maintain appropriate public control/regulation of infrastructure, avoid unrealistic expectations of the private sector, plan for worst-case scenarios and to not sign any dumb contracts like 99 year leases. In general transportation in all forms will probably always be "subsidized" for many reasons (equity, economic/trade, facilitating interaction etc), however there are definitely ways to reduce the burden on taxpayers/municipalities and improve efficiency by involving the private sector.
Deregulation of local transit operations as proposed by bloor_christie might not be a good idea, based on what happened in the UK (outside of London) local bus system... (as an aside, in that deregulated system the government will fund/tender the non-commercially viable "socially necessary" routes, about 20% of routes/service). I'd like to see some deregulation of intercity bus services or at least a rethinking of the current system (which I think is based on franchises?). Not sure about suburban/commuter rail, but the current model seems to work fairly well and has been making significant improvements, although there is a need for a dependable source of capital funding (tolls, GTA sales tax?).
One possible idea for the GTA would be to move to a Scandinavian model. Metrolinx would take over the planning of all services, create a unified fare system/brand, and would be in charge of tendering routes (not every route would necessarily be tendered, e.g. perhaps they'd want to keep the Yonge subway for themselves/TTC). Maintenance/fleet management could potentially be part of the contract, or could be done separately.
The contracts could be based on the lowest cost for providing transit services (based on guidelines/service requirements in the contract). Metrolinx would keep all fare revenues, although it could potentially use some of the revenue as incentives in the contract to maintain quality service (there would also be penalties for not meeting service standards). Alternatively you can set a price you want to pay and go with the bid that provides the best service for that price (or do a combination of price-quality)
Some routes would be profitable for Metrolinx (i.e. fare revenue generated would be higher than the cost of paying the operator to run the route), others wouldn't. Overall Metrolinx would likely not be profitable, but its costs would be reduced through competition (e.g. In Stockholm this led to a 20% cost reduction while service increased.. it also decreased the subsidy needed for transit, saving the region hundreds of millions).
I don't know that the net cost models that have the private sector collecting the fares and paying for most costs (can have a base subsidy from the government) are always a good idea... there are many instances where the private sector company ends up trying to abandon the route or get a bail-out because revenues are less than expected. Theoretically these models are supposed to shift the risk to the private sector, however in many cases like urbanfan89 noted the government ends up paying in the end.
The TTC would compete with private bus companies for route contracts across the GTA, or it could potentially be sold off.
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GregWTravels
Active Member
I live in the UK now (near Kings Cross in London). I think a lot of the growth in passenger numbers came from the fact that there was any investment in rail service. From the 1950s through to the end of the 1980s, there was very little investment in rail service, and much of the rail infrastructure in the UK was torn up and abandoned. The investment that came with privatisation was fulfilling latent demand for service. Passenger numbers continued to grow, and thus revenues and profits continued to grow from the train operating companies.
Now that the recession has hit, passenger numbers, revenues and profits are falling.
The key question is - if private companies are providing service, should they be able to cut routes that are not profitable? Even if those routes provide value to the nation by reducing congestion, pollution and CO2 emissions? If not, can we as a nation force train operating companies to run routes that are unprofitable because we want the benefits of reduced pollution and congestion?
The big issue that the UK has to look at now is the case of National Express. They were fine to bid for a franchise and take their profits when times were good, but since the recession has hit they refuse to run service when revenues dip and their profits disappear. Now the UK tax payer (i.e. me) is on the hook for running an unprofitable service up to Scotland. I wouldn't be so upset if the UK government had been able to offset that with profits from running trains when revenues and profits were growing, but no. We are left to take all the loses and let private companies take all the profits.
This is my major problem with giving over public infrastructure and service to private companies to run.
kettal
Banned
Was National Express fined for breach of contract?
GregWTravels
Active Member
The handover just happened last month, and was "orderly" according to reports. National Express have lost other routes they were operating though, when they decided to walk away from the first franchise, and they have been barred from bidding on future contracts. As to any financial compensation, I am not sure what was agreed.
The East Coast line will remain under state contract until the next tender period at the end of the next year. A lot of the operators have been complaining that the franchise periods - 5 years - are too short. The train operators think the government should award longer franchises so that the guaranteed revenue stream is longer, and thus companies would be more willing to stick it through and commit money to upgrades. The unions think the whole lot should be re-nationalized.
The East Coast line will remain under state contract until the next tender period at the end of the next year. A lot of the operators have been complaining that the franchise periods - 5 years - are too short. The train operators think the government should award longer franchises so that the guaranteed revenue stream is longer, and thus companies would be more willing to stick it through and commit money to upgrades. The unions think the whole lot should be re-nationalized.
Fresh Start
Banned
A fairer comparison for a parallel subway (in this case parallel to Bloor-Danforth) that'd be a moneymaker-route for private investors would be the Eglinton Crosstown Line. Say a corporation steps in and sponsors under a P3 arrangement to help build, upkeep and operate the line as a full and true metro. Assuredly that'd be a better outcome for the public than the TTC's half-hearted solution.
Introducing competition and market forces into the procurement of public infrastructure can make decision making more accountable, contribute to greater technological innovation, and reduce the potential for construction-cost escalations that consistently plague transportation projects. There is no limit for innovation in PPPs and when the private sector is given the flexibility to be creative, it can come up with remarkable things. However, without a political champion and a dedicated team within the public agency, PPPs typically will not work. The TTC itself is the consolidation of several former small-time Toronto-area operators. Imagine what if once again the TTC had to compete for riders against the West York Coach Lines of old? It'd only motivate them to step up their game and make their service more appealing to customers.
GraphicMatt
Looking forward to a FRESH START for Toronto
Some of the fairytale rhetoric about the efficiencies of the private sector in this thread is ridiculous. Private corporations are out to make a profit at the expense of almost everything else, which is why we'll end up with a privately-operated $22/fare limited-stop train from Union to the airport that uses decades-old technology.
bloor_christie
New Member
GraphicMatt - Embrace this! This competition is what we need in the GTA. Now you can either pay:
a) $3.00 dollars and take the TTC - 1 hour and 15 minutes to get to Union
b) $55.00 and take a cab - which tons of people currently do
b) $22.00 and get to Union in 22 minutes by rail - much cheaper than a cab!
That's what's makes competition great! Because cabs and this new train are profit oriented, they will cater to customers.
If the cab or train option is too expensive, less people take it, and profits go down.
After this train starts operation, I bet you cab rates will go down and will have to stop gouging airport patrons - which will benefit everyone! This private train is definitely a step in the right direction in the GTA.
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GraphicMatt
Looking forward to a FRESH START for Toronto
The private sector could certainly build expensive, limited-stop commuter-oriented transit effectively, which would make those who can afford it very happy (maybe), but it sure would be a straight screw-you to those who can barely afford TTC fares as is. Nevermind those who rely on transit for more than getting to work every day.
You know, I'm sensing a lot of parallels to the healthcare debate here.
You know, I'm sensing a lot of parallels to the healthcare debate here.