[roger1818]

From all his interviews. He's been explicit they HSR is not good for the middle class and that he wants to build a service that everybody can use. Nowhere did he say, "I want to build a service only competitive with single occupant driving."

Middle class is a meaningless buzzword that is used because everyone likes to believe they are in the middle class. Of course he isn't going to say he is specifically targeting single occupant drivers, but it doesn't take a rocket scientist to realize that the fewer people in the car, the less economical it is per person, but public transportation (bus, train, or airplane) has the same per person cost regardless of how many people are travelling together (except for large groups where you might be able to get a group rate or charter "vehicle").

Very much debatable that the bulk of long haul travel is alone. 200 km Ottawa-Montreal or Montreal-Quebec? Sure. 400 km Toronto-Ottawa or 500 km Toronto-Ottawa-Montreal? Less likely.

It really depends on the situation, but people do drive long distances alone. I also said the train could be an attractive option for couples even if it isn't cheaper than driving.

The other factor is, the faster the train is, the more expensive tickets are likely to become. In part to cover their costs, but also in part because people would be willing to pay more for a faster trip.

 

[kEiThZ]

Middle class is a meaningless buzzword that is used because everyone likes to believe they are in the middle class.

Are you dismissing what VIA's own CEO said as part of his pitch for HFR?

Come on....

It really depends on the situation, but people do drive long distances alone.

They do. But it really isn't as common as people think. And exceptionally rare for high yielding business travelers.

I also said the train could be an attractive option for couples even if it isn't cheaper than driving.

Never said it couldn't be. Said it would be very much price dependent.

The other factor is, the faster the train is, the more expensive tickets are likely to become. In part to cover their costs, but also in part because people would be willing to pay more for a faster trip.

The flip side is also true. The slower the train, the more price sensitive the user base becomes. And the more unit costs for VIA go up as productivity drops. That's why I said it's a maximization problem on finding the best tradeoff between capital investment and the speed which generates max revenue. But everything we've heard (rumours wise) suggests they are pursuing the minimum viable solution. This is what concerns me and a few other people.

Will people take a 5 hr train to Montreal? Sure. VIA packs 5 hr trains to Montreal and Ottawa today. But politics is also about perception. And if a lot of people don't perceive value in the improvements HFR brings, funding improvements will become politically challenging.

 

[roger1818]

Are you dismissing what VIA's own CEO said as part of his pitch for HFR?

I'm saying he knows how to play the game.

 

[Darwinkgo]

Part of the problem here is the CIB. I used to be super enthusiastic about them and a huge defender. But now I'm less clear on their role. Are they there to make this project commercially viable or to bring it to fruition? What happens if the BCR is positive but it's not financially profitable on a commercial basis? Are they guided by a minimum BCR (as governments traditionally are) or maximizing BCR with additional capital investment if necessary?

The example was given of Calgary where they sprang for an extra station. But that's tens of millions more. Not hundreds of millions or even billions more.

The lack of transparency is bothersome. Especially given that this idea has been getting circulated for the better part of a decade now. And I don't think any of us can say confidently that the CIB will provide any info but the final decision in 6 months.

No, that addition to the project involves 15+ km of new ROW, many km of elevated track -- it is more like they added an UP Express (perhaps more like what Blue22 was envisioned as, a bit more barebones!) to the scope, not a 'single station'. Rail capacity in the west is very constrained by the high volume of freight, so passenger projects mean building track, not optimizing use of existing facilities with a bit of debottlenecking. I'd put in in near doubling the project budget, from around $700 million to $1.2 - $1.4.

As for transparency, I hope that successes build trust over time. I hope they release a wholesome report - I don't think we need to see all the work in the mean time (that certainly is a failure in Toronto's planning process, letting politicians meddle at all phases of project development slowing things down and modifying scope and goals.

 

[kEiThZ]

No, that addition to the project involves 15+ km of new ROW, many km of elevated track -- it is more like they added an UP Express (perhaps more like what Blue22 was envisioned as, a bit more barebones!) to the scope, not a 'single station'. Rail capacity in the west is very constrained by the high volume of freight, so passenger projects mean building track, not optimizing use of existing facilities with a bit of debottlenecking. I'd put in in near doubling the project budget, from around $700 million to $1.2 - $1.4.

I find it hard to believe they doubled the project budget. But great if true. Doesn't change the issues that HFR would face. I have my doubts, Cabinet would approve an $8B plan from CIB if they recommended that. But an encouraging sign if the did that. All their other projects have been them cutting cheques.

 

[Darwinkgo]

I find it hard to believe they doubled the project budget. But great if true. Doesn't change the issues that HFR would face. I have my doubts, Cabinet would approve an $8B plan from CIB if they recommended that. But an encouraging sign if the did that. All their other projects have been them cutting cheques.

Remember that the goal is not to constrain the overall project budget, but to constrain the needed public subsidy. If investments are projected to yield fares higher than their lifecycle cost, then it is a good thing. The $8 billion in your example wouldn't be $8 billion from the government. It would be 'the government needs to contribute $1 billion in subsidy, and $1 billion in equity investment that has a lower claim than private investors (just throwing numbers out there), to secure $6 billion in private investment.

The alternatives might be that a lower project cost which generates fewer fares would necessitate $2 billion in subsidy, $1 billion in equity, to draw in $2 billion in private finance.

As I've said before, it is very weird to think about projects this way since we've mostly been trained to think in a way that is entirely different.

 

[kEiThZ]

The $8 billion in your example wouldn't be $8 billion from the government. It would be 'the government needs to contribute $1 billion in subsidy, and $1 billion in equity investment that has a lower claim than private investors (just throwing numbers out there), to secure $6 billion in private investment.

That's what I used to believe would happen. Except that the CIB have not been able to draw in private investors on any of their projects to date. Hence, the excorciating editorial in Maclean's that I posted in the other thread. At this point in time, we haven't had a single private sector investor come forward to invest in HFR that we know of. Heck, naming Sabia chair almost looks like a ploy to get CDPQ to fund HFR so they can say the got an "outside" investor.

As I've said before, it is very weird to think about projects this way since we've mostly been trained to think in a way that is entirely different.

That seems a lofty goal compared to the reality. Even in Alberta all I see is an MoU to help completing studies and do due diligence. Nothing yet on financing (though we can expect it). And nothing at all on private sector investment. It's kinda hard to see how the rhetoric matches reality right now. I hope they actually get to that point. But right now, it's more talk than deliverables.

 

[Darwinkgo]

There are two gaps that I can see as to why they haven't been successful to date, but it could turn almost overnight. You can't bring investors in before you have prospectus - that is the gap 1. The second one is regulatory risk. The returns have to be quite good if investors are going to pony up before regulatory approval. So it might look like this: the government advances the project to regulatory approval, then sells an 80% or more stake in the project, and the buyer manages the rest. If the project can't attract investors at that stage, they either will be abandoned or the government needs to look at how much subsidy is worth adding to the pot to move the project forward.

I have lots of time for Paul Wells, and he is right, the CIB had lofty goals and it has been hard to show accomplishment because things take way too much time. I want to see it succeed because if it does it unlocks a lot more projects that are interesting but have very high up front costs that are hard to sell to voters as pure government projects.

 

[kEiThZ]

My point here is that if all they are doing is cutting in low interest loans and haven't failed to attract private sector capital, the kind of optimization we are hoping for isn't happening. I sincerely hope I'm proven wrong in 6 months.

 

[SFO-YYZ]

That's what I used to believe would happen. Except that the CIB have been able to draw in private investors on any of their projects to date. Hence, the excorciating editorial in Maclean's that I posted in the other thread. At this point in time, we haven't had a single private sector investor come forward to invest in HFR that we know of. Heck, naming Sabia chair almost looks like a ploy to get CDPQ to fund HFR so they can say the got an "outside" investor.

Do we actually know the current investor profiles of CIB and the capital structures of these investments? I'm not so sure we can come to this conclusion just based on the fact that there's been no information released to the public to date. I used to work in private equity and in vast majority of deals, we don't want our stakes in public/private deals openly disclosed, not until the deal is 100% finalized with ink on paper. I would assume the CIB takes a similar approach with their investor relations.

I realize you've been one of the more vocal voices on this thread voicing concern since the beginning, which is fine. But lack of publicly available information doesn't necessarily mean good news or bad news, as I'm sure a lot of project planning activities and investor conversations are happening in the background. Which is kind of the point of an institution like CIB in the first place - in that they are able to conduct their mandates at an arms length from the government and not under constant obligations to disclose information (in contrast to a purely public agency like TTC or STM which forces them to respond to every political whim).

Lastly, I will add that I'm in agreement that this process could have been expedited whenever possible, and it's also my (and many others') sincere hope to see more concrete plans and project costing for the HFR in the next 6-12 months time frame.

 

[kEiThZ]

Do we actually know the current investor profiles of CIB and the capital structures of these investments?

You can go through the deals they've closed. Crown Corps can't be secretive. So far, as far as I've seen none of it has involved private sector finance. Their great launch project was providing funding to a project that was already approved and had a large institutional investor (REM with CDPQ). With projects like that, we can definitively say the value of the CIB has been minimal. None of these are projects that wouldn't have happened without the Bank. Or even sped up without it.

I realize you've been one of the more vocal voices on this thread voicing concern since the beginning, which is fine.

Go back far enough, you'll find I was one of the most enthusiastic proponents for HFR and the CIB. It's the Bank's middling successes delivering and years without progess on HFR that have be concerned.

This is starting to feel exactly like the Ontario HSR proposal. The Wynne Liberals sat on that for years. Everyone thought an announcement was imminent. When nothing came and there was public grumbling in Kitchener and London, they hastily announced the EA. They then lost the election and we got nothing. The Trudeau Liberals have done the same thing with HFR for years. Sat on the idea. Then launched the JPO, four years into power and now we'll have a decision on the verge of a Spring budget that has a risk of them possibly losing power. I hope people can see why I'm both concerned and pissed that necessary infrastructure doesn't get built in the country and is value engineered to crap.

 

[SaugeenJunction]

I was doing some digging and found this interesting page from Systra Canada which provides an overview of HFR work that they conducted.

Here is an overview:

The specific services provided by SYSTRA Canada were as follows:

• Review of previous studies;
• Evaluation of the ridership;
• Assessment of technical-economic options;
• Financial Modeling;
• Risk assessment;
• Preparation of a Business Plan;
• Preliminary Environmental Impact Assessment to determine environmental and social considerations during construction;
• Definition of Design Criteria;
• Field Investigations and determination of upgrade requirements including:
  • Surveying services;
  • Geotechnical investigations;
  • Bridge & Culvert inspections;
  • Track inspections;
  • Level Crossing inspections;
  • Assessment of electric and diesel locomotive options;
• Evaluation of optional electrification costs;
• Preliminary CTC (Centralized Traffic Control) arrangement;
• Evaluation of the impacts associated with Utilities;
• Relocation of existing Multi-User trail;
• Preliminary arrangement of Passenger Stations;
• Alignment optimization;
• Preparation of an operations plan;
• Preparation of a Track Schematic;
• Simulation of cycles times for the optimized route;
• Evaluation of the use of Sidings vs Passing Tracks;
• Re-optimization of the alignment to ease tight curves;
• Evaluation of legal considerations and estimation of land acquisition;
• Determination of cut and fill volumes required during the project;
• Preparation of a drawing package including: plans, condensed profile, typical details, preliminary bridge design, earthworks, cross sections, etc.;
• Preparation of Performance Specifications for the Design-Build process;
• Evaluation of material type and minimum material requirements needed for the rail foundation as well as quantities for each rail component;
• Preparation of a preliminary Bill of Quantities;
• Development of Phasing, Construction planning and strategy;
• Evaluation of Capital Expenses;
• 20% level engineering Study of the Quebec-Montreal Corridor.

 

[kEiThZ]

That was in 2016 though. That was just enough justification to fund the JPO. I'm really curious how much of the JPO's work is "Pre-procurement". Are we going to see 2 yrs of EAs after they announce in the Spring? Or are they going to get shovels in the ground in 2022. As it stands, we're looking at service launch probably in 2026. Hopefully it doesn't move even further to the right....

 

[crs1026]

^That’s actually quite a long list of deliverables. Assuming the EA doesn’t point to new issues, one would expect those deliverables to represent a meaningful % of design completion. Or were they just conceptual wish lists? One would expect a fair number of those outputs to have a PEng stamp on them, and bring things close to shovel readiness, or at least procurement readiness.

- Paul

 

[Mcurtis]

To introduce a variable to the conversation.

- Has anyone heard anything about the new trainsets that they purchased from Siemens? Are they still on the same timeline for deployment or has COVID caused development and deployment delays?

- From a hypothetical perspective. Do you guys feel that there would be a market for a regular route from London to Kingston? Essentially, the same business model that GO transit ran 5-8 years ago where they do a couple of runs to Toronto in the morning/afternoons with business traffic. Continue on to Kingston and turn around to Toronto to open up both communities along the route to more viable housing markets for Toronto businesses and provide extra commuter opportunities with fewer trainsets?

i.e London: Toronto: Kingston:
04:30 06:50 09:20
05:30 07:50 10:20
06:30 08:50 11:20

Kingston: Toronto: London:
04:40 07:10 09:30
05:40 08:10 10:30
06:40 09:10 11:30

Similar start times starting in Kingston heading to London in the mornings with 3 trains each direction at the end of the day as well.

London: Toronto: London:
13:30 15:50 18:10
14:30 16:50 19:10
15:30 17:50 20:10

Running a couple trains from Toronto to London only since Kingston has a number of trains already servicing it in the afternoons.