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At one point a proposed structure with CP was at the end of the 50 year term the rail asset gets turned over to CP with the passenger rail as a preferred tenant, and in the meantime CP gets to use unused capacity on the capacity expanded line for the marginal cost (nearly nothing). Which you could value in the 9 figures of course.

The Stoney Nakoda don't need to transfer a single square foot of land. Both sides (and the Crown) of course need to engage to assess whether the project will impede treaty rights, and it would be much better to reach a sort of good neighbour agreement.
 
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It is ok to believe the project will fail. But that isn't a reason to as a public to stop the project now, when the risk is on the private proponent.
You keep saying that the risk is not on the public. You also seem to have the inside track on this project. Please help me understand this (from the press release):

CIB Funds 50% of Capital Costs: Interest rate of 1% per year for 50 years (significantly lower cost than even the Province of Alberta can borrow at)
• P3 comprised of private and federal capital covers upfront capital costs in exchange for low-cost mortgage
• Instead of Province paying $1.5 billion upfront, P3 provides mortgage of $60 million/year for 50 years
P3 Model Risk Transfer from Province to Private Sector: P3 Taking Capital Cost and Revenue Risk
• Performance Payment Net cost to Province capped at $30 million/year ($60 million/year mortgage - $30 million/year surplus)
• P3 financing is secured only against P3 assets (the project), with no recourse to the Province

As near as I can tell, none of the numbers actually add up in the way presented ($60M * 50 years @ 1% = $2.4B, not $1.5B; the interest rate to pay off $1.5B over 50 years at $60M/year is 3.1%, which is a higher interest rate than the province's most recent 30 year bond), which is troubling when the rounding errors here can be hundreds of millions. I honestly wish that this seemed less sleazy, that it was at least presenting a project in a straightforward way rather than puffery at every step. For instance, providing a standard set of financial projections, in addition to a bulleted press release. If it's a project worth $10 million of public money today and $1,500 million between now and 2075, they should be proud to show their workings.

Anyways, here's my understanding. The CIB, which is public money, is funding half of the project. The province, which is public money, agrees to pay $60 million per year until roughly the year 2075; if this rail scheme makes a profit, then this is reduced up to 50%. If there are capital cost overruns, there is no indication who is funding it. If there are operational overruns, there is no indication of who will fund it; in both cases, the possible funding sources are a P3 company that doesn't exist aside from this project and various levels of government; since the former has no money, all overruns must come from the latter. The province does technically have the choice not to pay, in which case the rail scheme will be seized and the province's international reputation will go in the toilet. The first step before all of this is for the province (and feds) to give $10 million (each) to design work on a project that may or may not be constructed.

How is all of this not risk borne by the public?
 
The province may agree to pay $30 million a year. Additional revenue are at risk to the proponent’s own performance. Capital cost overruns are a proponents issue. Operational costs are a proponent issue. Risk transfer is away from the government—the province’s obligation is to pay an availability fee if the proponent is providing a certain service. If the service is not being provided, no obligation.

The concessionairy loan from the CIB likely gives them first call on assets (unless the CIB feels that will negate the concessionairy loan’s incentives).

In the end let’s say the project goes belly up 6 months before operation. CIB and lenders get a rail asset which they will look for an operator for to recover their investment.

Let’s say the project fail two years into operation: either the lenders assume ownership and operate to recover their investment as best they can, or agree to restructure the debt so they can recover their investment the best they can.

Canada doesn’t have many projects like this. Maybe not any which were proponent proposed originally. But Canada has projects that are similar. Where the government has no money upfront (not counting the government bank here), and the proponent is paid after the fact. The most obvious example is the Confederation Bridge linking PEI and New Brunswick. The company which built and financed it receives a yearly availability payment from the government, and they receive the toll revenue. In exchange the company covered all of the capital cost, covers all the maintenance and operational cost, and the financing costs (they also received some loan guarantees iirc).
 
At one point a proposed structure with CP was at the end of the 50 year term the rail asset gets turned over to CP with the passenger rail as a preferred tenant, and in the meantime CP gets to use unused capacity on the capacity expanded line for the marginal cost (nearly nothing). Which you could value in the 9 figures of course.

That structure assumes every km is double tracked. Is that practical? There are four crossings of the Bow, one across the Kananaskis, the tight sections in Edworthy and Ghost Lake, etc etc

The Stoney Nakoda don't need to transfer a single square foot of land. Both sides (and the Crown) of course need to engage to assess whether the project will impede treaty rights, and it would be much better to reach a sort of good neighbour agreement.

That may be true in a strictly legal sense but the “good neighbour” agreement is going to need to come with $$$,$$$,$$$.
 
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Alberta sends Banff train proposal back to private backers, citing financial risk​


Alberta has punted an ambitious plan to build a passenger rail link between Calgary and Banff back to the private proponents of the project – saying that as it stands, the financial risks for the province are too high.

The current plan underestimates the capital costs of the project – currently pegged at about $1.5-billion – and what will be required from the province in terms of an annual financial contribution, according to Alberta Transportation Minister Prasad Panda. It overestimates the potential ridership, he said, adding a construction schedule that envisions the service running in the mid-2020s is unrealistic.

“At this moment, as it’s presented, it’s passing on all the risk to Alberta taxpayers,” Mr. Panda said in an interview Wednesday.

In the past, the idea of the Calgary-Banff rail project has generated excitement from provincial officials, including Invest Alberta, the entity created to promote tourism, tech, energy, agriculture and other sectors.

The Transportation Minister said he likes the idea of the project, which could reduce the number of people driving to ever-more-crowded Banff National Park. It could help diversify the province’s economy by boosting the tourism sector. And proponents say it would lower greenhouse-gas transportation emissions by reducing the vehicles going to the park, and could be North America’s first hydrogen-powered passenger train system.

“Those things are good. But it shouldn’t be pie-in-the-sky,” Mr. Panda said.

The project’s private booster, Alberta-based Liricon Capital Ltd., along with co-developer Plenary Americas – owned by the giant Caisse de dépôt et placement du Québec – have argued it is “uniquely low-risk to taxpayers.” They have said construction costs will be lower and timelines shorter than many big projects because of the existing railway corridor. In the past three years, the idea of the rail project has been a rare point of agreement for the provincial and federal governments.

But the financial implications for the province have come under recent scrutiny from Alberta’s transportation department and cabinet, including Premier Jason Kenney – who will leave provincial politics in October.

“We want a realistic proposal, a feasible proposal,” Mr. Panda said, adding his office has sent a letter to the proponents this week outlining its position.

“If they can assume those risks, and if they can raise private capital, without penalizing Alberta taxpayers, we’ll reconsider it.”

Mr. Panda added there’s still an outstanding question of what the federal contribution to the project will be. So far, it’s only the Canada Infrastructure Bank that has said it’s prepared to provide a loan for half the $1.5-billion capital cost.

The proposed rail service would mean building a dedicated passenger rail line as a twin to the existing Canadian Pacific Railway Ltd. track to avoid impeding the near-constant shipping of freight. The line would begin at the Calgary airport and make stops downtown, and in Cochrane, the Morley reserve of the Stoney Nakoda Nations and Canmore.

Liricon and Plenary submitted a proposal on the Calgary-Banff rail project to the Alberta government and the Canada Infrastructure Bank in November. Under that plan, part of the capital costs and interest would be paid back – once the service is actually up and running – by the province. It would pay $30-million annually for 50 years. Alberta would eventually own the project, but a yet-to-be-named private entity would build and operate the service.

As envisioned by Liricon and Plenary, half of the $1.5-billion in capital required for the project will be provided by the Infrastructure Bank, with remaining 50 per cent being provided through a combination of debt from private lenders, and from Liricon and Plenary themselves.

Last month, Liricon managing partner Jan Waterous put out a news release that said a new ridership study that shows the $30-million in annual payments from the province might not be necessary if the park encourages mass transit-use with strategies such as raising the park entry fee for private passenger vehicles, or expanding bus and shuttle service between park attractions.

Ms. Waterous – who with husband Adam owns the Mount Norquay ski resort located in the park as well as the long-term lease on the Banff train station – said the study they commissioned found the train could carry up to 11 million passengers a year by 2035, five times more than originally projected in Liricon’s first proposal. The train system could be integrated with regional transit systems, and be a part of tourist packages with the country’s major airlines, she added.

In a message on Wednesday, Ms. Waterous said the letter from the province this week is part of the back-and-forth on the project.

“Not surprisingly, the Alberta government wants to reduce the cost to the taxpayer, and our ridership study shows that this is possible,” she said, adding she doesn’t believe the province has responded to all of the proponents’ updated plans.

“This is just part of the process of a complex project where ongoing dialogue with the government is paramount.”

However, Mr. Panda said the proponents want Alberta government to backstop early project development costs, and assume financial risks for the project that will be outside of the province’s control. He said the province’s annual costs, based on his department’s analysis, would be “much more” than $30-million – as would the upfront capital cost estimate of $1.5-billion.

Consultations and regulatory approvals are likely to take much longer than forecast. And Mr. Panda also highlighted that the proponents have yet to reach formal agreement with CPR. For instance, space is constrained in downtown Calgary, and new land will be needed to accommodate a second set of tracks.
 
However, Mr. Panda said the proponents want Alberta government to backstop early project development costs, and assume financial risks for the project that will be outside of the province’s control. He said the province’s annual costs, based on his department’s analysis, would be “much more” than $30-million – as would the upfront capital cost estimate of $1.5-billion.

Consultations and regulatory approvals are likely to take much longer than forecast. And Mr. Panda also highlighted that the proponents have yet to reach formal agreement with CPR. For instance, space is constrained in downtown Calgary, and new land will be needed to accommodate a second set of tracks.

I completely agree with the points the Minister raised - going to cost much more, consultations are going to be much harder, and there's no definitive agreement with CPR on what to do about the tight sections of the corridor. I hope the proponents can come back with a more credible financial and technical proposal, because I do think this is worth building even at a much higher price. However, it is high time to put an end to the "monorail vibes" (as @CBBarnett put it).
 
Good comments from the minister in general - hopefully all parties can work together collaboratively to make this work.

Alberta sends Banff train proposal back to private backers, citing financial risk​


...

Consultations and regulatory approvals are likely to take much longer than forecast. And Mr. Panda also highlighted that the proponents have yet to reach formal agreement with CPR. For instance, space is constrained in downtown Calgary, and new land will be needed to accommodate a second set of tracks.
There shouldn't be much land acquisition required outside of potentially at station areas. There are already 2-4 tracks existing downtown and CP's ROW outside of the downtown is actually much wider than in the downtown core where they've sold off a lot of land.

There will be engineering and construction sequencing challenges in areas where the tracks are tight to the river however.
 
The minister hasn’t explained how a risk transfer away from the province puts all the risk on the province, but I’d charitably say that maybe he just misspoke and was referring to a contribution to design and regulatory process payment that came up recently ($10 million I think?)?

That if the project didn’t go ahead the province would be out the $10 million?
 
This turn of events goes to my point - I don't really see how a private proposal on it's own can make this work. A more skilled group of promoters would help, but they won't get all the way on their own.

The minister had a good summary of the obvious issues, but some of these challenges don't seem to be practical for a private proposal to figure out. If the province wants to assume no risk and take no leadership on intercity transportation issues I don't get how we ever get a train. It's not like we don't love risk in this province - but perhaps only risk that come in the form of decades of hyper-reliance on unpredictable resource revenues that decimate any ability to strategically budget, and zero-analysis $1.5B pipeline bets in another jurisdiction that get canceled weeks later to no one's surprise.

It's not just the financing or the cost, it's the inter-jurisdictional nature of what's proposed. It's the same reason we don't see a lot of new highways being built without public planning, coordinating and financing support.
 
This turn of events goes to my point - I don't really see how a private proposal on it's own can make this work. A more skilled group of promoters would help, but they won't get all the way on their own.

The minister had a good summary of the obvious issues, but some of these challenges don't seem to be practical for a private proposal to figure out. If the province wants to assume no risk and take no leadership on intercity transportation issues I don't get how we ever get a train. It's not like we don't love risk in this province - but perhaps only risk that come in the form of decades of hyper-reliance on unpredictable resource revenues that decimate any ability to strategically budget, and zero-analysis $1.5B pipeline bets in another jurisdiction that get canceled weeks later to no one's surprise.

It's not just the financing or the cost, it's the inter-jurisdictional nature of what's proposed. It's the same reason we don't see a lot of new highways being built without public planning, coordinating and financing support.

The Brightline train from Orlando to Miami seems like a somewhat similar situation but with a much more skilled group of promoters. I'd love to know what the keys were to making that privately-led project happen, I am not very familiar with it.
 
The Brightline train from Orlando to Miami seems like a somewhat similar situation but with a much more skilled group of promoters. I'd love to know what the keys were to making that privately-led project happen, I am not very familiar with it.
Many many many years of work. And they bought the original rail stretch (or were bought by the owner of the railway). They also have access to a financing class that is called ‘muni-bonds’ or public activity bonds. Basically bonds that are certified by a government for public works purposes which are treated differently tax wise for the bond holder, which reduces interest rates by a lot. Since they’re secured by a real asset (rail) that is worth close what it costs to build, interest rates are even lower due to low risk.

Brightline has raised close to $4 billion in this way.

Also helps greatly that their routes have allowed them to phase things to reduce investor risk.
 
Brightline also owns a bunch of land at the station sites, and central Miami is as great a place for 3 million square feet of intensive development as a national park isn't.
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Experiencing Sweden's train and metro system has opened my eyes to what is possible with public transportation. A common argument against it in Canada is land size to population, but sweden is about the size of BC and Alberta with a similar population, and they have trains connecting almost all reasonably sized population centres. You can get to almost any city or town by tain or bus. I was visiting a town of 2000 people and they even had a passenger train station. The fact that a Calgary to Banff line seems like such a pie in the sky dream here makes me a bit sad.
 
I agree with everything you say here, except that Sweden is a kingdom that for all intents and purposes functions as a unitary republic. A lot easier to get “nation-building” projects built when you’re not beholden to an entire federation.

Also, at between 10.4 and 10.5 million people, Sweden is well over twice the population of Alberta, in a geographic area 210,000 km2 smaller. Very significant differences unfortunately.
 

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