EYorker
New Member
On corridors that are owned by their respective owners, the host railroad calls all the shots on construction in that corridor.What does CN stand to gain from working on passenger rail projects? Why would they dedicate their own time, man power to working on this project? Is MX paying them? Is this a gesture of good will? Asking out of curiosity.
The Auditor General of Ontario issued a rather scathing report a number of years ago of Metrolinx and their host railroad construction billing practices.That's exactly how it works. Metrolinx tells CN to do something, they come to an agreement, and then CN sends them the bill. The interesting question (if anything) is whether CN just charges them the flat cost of labour and resources (so 0 profit - covering the costs), or if there is some sort of upcharge, and if so how much?
Full report: https://www.auditor.on.ca/en/content/annualreports/arreports/en16/v1_309en16.pdf
Excerpt:
For contracts with CN and CP, Metrolinx does not do work to know that it is getting what it pays for: it does not verify charged costs; it does not ensure that charged costs are reasonable; when it requests that the parts on a project be new, and pays the cost of new parts (as opposed to less expensive recycled ones), it does not require that parts be checked to ensure that they are new. It has also been paying excessively high mark-up rates charged by CN for building new rails for Metrolinx (CN’s mark-up rates are specified on its invoices,while CP’s are not as clear).