[TOareaFan]

Because if you're 10 min late you only have to wait 15 min for the next go train.

I "get" the theory but not your math

 

[denfromoakvillemilton]

I "get" the theory but not your math

I'm not the best at these things.

 

[Edward]

Took a ride on the King car from Yonge to Dufferin yesterday. What an ordeal. They needed a subway here yesterday and not 10 years from now when a million more condo units show up.

 

[M II A II R II K]

Those streetcars were bunching at least since the 80's.

 

[TOareaFan]

A big reason for the long construction time on Eglinton is to spread borrowing over a longer time period giving a project a lower net present value cost to the province. With more upfront spending this could be accelerated.

I am an old guy.....and maybe the math has changed......but how does lengthening the period of time when all the cash flows are outward and pushing out the time before any cash flows are inward lower net present value? I would have thought it would have had, exactly, the opposite effect.

 

[rbt]

I am an old guy.....and maybe the math has changed......but how does lengthening the period of time when all the cash flows are outward and pushing out the time before any cash flows are inward lower net present value? I would have thought it would have had, exactly, the opposite effect.

It doesn't. It does take pressure off the provinces immediate debt concerns.

 

[k10ery]

Actually, delay would reduce the present value cost, if construction price inflation is less than the interest rate on government debt.

Back when the decision was made, construction price inflation was running at 4.2%, and OFA was issuing long bonds with a 4.4% coupon. So it was pretty much a wash.

 

[TOareaFan]

Actually, delay would reduce the present value cost, if construction price inflation is less than the interest rate on government debt.

Back when the decision was made, construction price inflation was running at 4.2%, and OFA was issuing long bonds with a 4.4% coupon. So it was pretty much a wash.

Thanks to all for intriguing me enough to try and dust off my npv skills out of dormancy.

So, if you take a $7B (today $s) and spread the cost over 7 years (inflating those costs at 4.2% each year) then assume you get positive cashflow for 20 years that pays back the total negative flows.....discounting those at the province's borrowing rate of 4.4% (not sure it still is that)....the NPV is a negative....$1.44B.

Changing one assumption (the 7 year construction period becomes 4)......well two because that also means it takes 23 years to recover the expenditure.......the NPV is now $1.15B.

I would not get too hung up on the base assumptions (as they are consistent in both) but it does appear that extending the project construction timeline and delaying the revenue generation time does increase cost on an NPV basis.

I think it is just because early cashflows have more weighting in the calc and extra years of negative cash flows are gonna matter more.

 

[M II A II R II K]

 

[gweed123]

Looks like my commute home in downtown Ottawa! Only with streetcars instead of buses, and minus the whole 'still actually moving' thing...

 

[TheTigerMaster]

Can anyone explain why this happens so frequently?

 

[M II A II R II K]

Because the transit service available there sucks.

 

[TheTigerMaster]

Because the transit service available there sucks.

That doesn't look like a typical case of transit "sucking". Was there a mechanical breakdown?

 

[innsertnamehere]

I saw this yesterday... I looked both ways down King street and there were streetcars as far as the eye could see. The King ROW can't come quick enough.

Even better, the DRL is needed yesterday.

 

[Kitsune]

yesterday was explainable though with the lakeshore accident. The fact is - once lakeshore WB gets shutdown at York, the next available detour is King St right now.