nfitz
Superstar
Well that was the promise made when Prime Minister Chretien provided funding.
But where has Metrolinx recently made that promise?
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But where has Metrolinx recently made that promise?
smallspy
Senior Member
Notice that I said that it applies to new services - those are the only ones that I have seen such references made to. Things like the 407 services, and buses to Peterborough and Kitchener. For instance, despite the supposed demand for weekend 407 service since service started in 2000, it wasn't until September 2011 that GO felt that it met the metric.
I would assume that there is some sort of similar metric for existing rail lines, but I have never seen any such thing referenced.
Dan
Toronto, Ont.
innsertnamehere
Superstar
thing with rail lines is that they require significant capital to set up, while a bus line only requires a couple of roadside signs.
TOareaFan
Superstar
I was simply challenging the notion that all new services have to meet the cost recovery test.....certainly half hour GO trains on Lakeshore don't/won't (in fact they may take the overall recovery on the line backwards) and I doubt that extending the GT line to KW does either.....that does not mean they are not good ideas/services but the notion that cost recovery is the overriding determinant of any new service just can't be right....so I was wondering why so many here feel that it should be applied to the UPE.
innsertnamehere
Superstar
^+1 GO has shown in recent years that it is willing to introduce some money loosing ventures, and will only do even more in the future with more all day 2 way routes opening up. I see no reason why the ARL won't cost around $15, and certainly not $30. I am guessing around $30 as that is what other ARLs around the world like to charge, and it allows for 2 people to take the train and still have it be cheaper than a taxi.
k10ery
Senior Member
Rob Prichard reiterated that idea in 2012. The fact that they set up a new operating division for it, that they keep prattling on about "delivering an elevated customer experience", and that they are building Taj Mahal stations tells you there is no wavering from this cockamamie idea we should spend a half billion and devote 2 tracks to serving tourists and a handful of business travellers at premium prices.
Since they are still pretending this is a viable business model, they are also pretending it will be run a cost recovery basis. If it fails (as it almost surely will), how are we going to find out about it? Metrolinx is lousy about reporting ridership numbers or detailed financials. So if they want to bury the bad news they probably can.
And that's what operators of white elephants usually do!
christiesplits
Senior Member
Perhaps my estimate of $30+ was a result of my overall cynicism. I just think Metrolinx botched this entire project from the get go. They have dedicated funding and bureaucratic resources to a project that seems completely desperate and short-sighted, with even Glen Murray acknowledging that the project is a band-aid solution for the Pan Ams.
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TOareaFan
Superstar
What would represent failure? How are you so sure that benchmark would be met here?
Rather than throw around words like sure failure and white elephant perhaps we could/should look at what that means?
There are going to be, what, 72 outward trains to the airport per day and 72 inward.....each with a capacity of 180 passengers.
If each and every one of those trains were full (unlikely) that would mean the maximum carrying capacity of the service is 12,960 passengers to downtown per day and 12,960 to the airport today. Anyone have any idea of how many people leave downtown for PIA each day? Any idea what the number of people arriving at PIA per day headed for downtown is? If we knew that we could figure out what percent of the traffic this could (at max) handle.
Then (and I turn to the people on here with knowledge about train ops) what does it cost to run these trains.....cause then we could compare those operating costs to fares generated. For example if, on average, those trains ran half full at, say, $25 per passenger....they would generate $324k of fare revenue per day.....does that cover the cost of running those trains?
What is a white elephant? Someone earlier said it was a service using two tracks that "nobody rides".....what is the definition of "nobody rides"....if you go back to that $324k generated from 50% capacity usage ...is that "nobody riding"?
I get that some think this is a bad idea and others think it is a good idea but can't we put a bit of meat on the bones of this discussion rather than just throwing catch phrases around?
k10ery
Senior Member
Not cynical enough. Here are some simple calculations, based on the original KPMG study that included a ridership survey, and is the closest thing we have to a business plan.
Assume that total capital costs are $500 million, operating costs of DMUs are $900 per trip, and there are 90 trips per day.
If the fare is set at $20, there will be 2 million riders per year, and they will lose $10 per pax, for an annual deficit of $20 million
If the fare is set at $30, there will be 1.8 million riders per year, and they will lose $4 per pax, for an annual deficit of $7 million
If the fare is set at $40, there will be 1.5 million riders per year, and they will break even
Metrolinx is talking about 1.2-1.8 million pax in the first year. So they are probably planning on a fare of $30-$45
1.8 million is 5000 pax per day, or 50 per train. Plenty of room to seat your white elephants!
Edit: based on the same calculations, they can cover 100% of OPERATING costs at a fare of $9. That is what they should do, period.
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drum118
Superstar
Was told by the Ministry of MTO a few years ago, 17,000 go to the city core, but no number to the centre of the core. She didn't support the plan as she saw there was a greater need to get people to/from the airport cheaper as well faster and not having to take the car than this plan.
Operating cost per train is about $400/hr. Take that number to come up with the full day operating cost and divided by your number of 12,960 to see what the cost is per rider is. Got to factor in travel time to take the trains to/from the yards.
Looks about $6 per rider. 50% rate would be $12, 25% rate is $18. Therefore the cost to use this line is (will be) $15 per person each way. If it is higher, then cost are based on low ridership. It will be low in the beginning like most new line, but the one year mark is the telling point. Even 6 months numbers will be saying something.
k10ery
Senior Member
Hey, I didn't see your post before I wrote mine.
The key point is that the plan is to cover the capital costs, not just the operating costs. That's why it has to be an expensive, premium service that few people will use.
If you're right that it's 144 trains per day (not 90 as I assumed) then the math gets even worse on their business plan. Way worse.
A service priced to cover operating costs would be cheap enough to attract ordinary folks, and it would probably work well. But it is absolutely clear that Metrolinx does not have that in mind.
TOareaFan
Superstar
I thought there were going to be 144 trips per day (18 hours a day.....15 minute service ....two directions = 144).
If that is true then $900 per train costs $47,304,000.......if there were 1.8 million passengers at $25 that would mean $45,000,000 in fare revenue.......so an operating deficit of $2,304,000....or a cost recovery of 95%....is that a white elephant?
vegeta_skyline
Senior Member
Problem is that KPMG study is dated as some specific operating conditions could not have been known at that point. For one it probably did not considered metrolinx owning the line so that they would no longer have to pay a wheelage fee to CN for track usage. Also for the longest time it was assumed that they would be using the same 3 person crew model currently used on GO trains today. However they are now planning to run the line with a 2 man crew(no way that was considered in KPMG's analysis as this arrange has yet to be finalized as of now), which would obviously result in significant cost savings.
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k10ery
Senior Member
I didn't use KPMG's cost estimates. The other thing that's different is the capital costs are way higher than KPMG assumed. I used KPMG's demand survey to get the base demand and what happens to it if they raise the price enough to cover costs. (Hint: it goes down.)
Actually, we should include a track rent in the operating costs, even though Mlinx owns the line. The rent is the value we would get if those tracks to better use, i.e. for an S-bahn-style western DRL.
TOareafan: Again, again, it is a white elephant (an underutilized, inefficient project) if they set the price so high that ridership is low. But that is exactly what they'll have to do, if they want to recover the capital investment from riders.
Project good, pricing model bad.
k10ery
Senior Member
If $400/hr op cost is right, and its 144 trains per day, then the break even fare is about $29 (a good bit lower than I estimated), and the projected ridership is 1.7 million/year. Trains will run 80% empty on average.