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I just received the following email from the HFR Project Team which includes a link to their new website:
Like how much more expressions do they need??? They have the plans and the studies have been done over and over again. Time to launch the actual procurement process instead of this pre pre pre procurement.
 
Like how much more expressions do they need??? They have the plans and the studies have been done over and over again. Time to launch the actual procurement process instead of this pre pre pre procurement.
This is the normal procurement project for this type of thing. They're really complicated contracts, and the processes take a long time.
 
You’re thinking a bit too narrowly. This project is about as extensive of a P3 as you can get.

P3s pick from a menu of items:
Design
Build
Finance
Operate
Maintain
Own
Transfer



Three main reasons for doing P3s. Optimizing projects in a way that is rare for governments to be able to do. Transferring risk (cost overruns, new technology, delays). Cost discovery (lock in and know up front cost over 30, 50 years).

The objective is since the winner makes money from building, operating and maintaining, that they can better optimize among all three to find the ‘best price’. It also ensures enough maintenance is done (government is bad at this).

A government may design to ensure low enough upfront cost at a higher operating and maintenance costs—not because they want to but because the project has a hard budget cap.

A government typically wouldn’t take a technological risk even if there is a good chance at huge maintenance and or operational savings. There is also assigning a price to various risks (geotechnical, design) so they’re known up front. Can also transfer things like demand risk (ensure project isn’t compromised in ways which reduce demand—or ensure project isn’t a white elephant).

Cost discovery is another one. A risk world wide has been lines being built and the original economic models being way optimistic. So you set a minimum service level, and ask for subsidy needed to pay for it. Then you know up front. the great thing is the builder can make decisions a government would rarely do. Like add way more service speculatively. Deep discounting to build a market. Spend more money to make a service faster because it will generate more demand. Making choices that lead to large early losses to support future profits.
You make some good arguments, but is this incapacity/incompetence common for governments in general, or just common for the US/UK/Canadian governments and SOEs since the Reagan/Thatcher/Mulroney era?

With bidding consortia, its highly likely that the best outcome won't be available, because rather than selecting the best option in each area, the owner must choose from the available combinations. For example with GO Expansion if Alstom has the best equipment offering but SNCF the best operating plan that isn't one of the choices. It's also not clear how paying DB or SNCF to hire managers, planners and crews from the same talent pool that was already available to Metrolinx creates new value.

Not skimping in capital and construction quality is a very good reason to do design-build-maintain for linear infrastructure, as envisaged for the new alignments in HFR 1.0. However, throwing rolling stock into the mix certainly hasn't helped the Ottawa LRT, and it seems as though far too many of the external revenue factors and drivers would be just as much beyond the control of anyone managing this on VIA's behalf as they are beyond VIA's control now, resulting in some risks that are very hard to accurately price - and when you have those the public either pays a large risk premium up front or pays later when the low-bidding consortium defaults and the public purse picks up the pieces.

These are also things that SNCF and DB do not seem to face quite so many major challenges with in their domestic markets, and the Siemens/OeBB RailJet/Brightline success stories upon which the new VIA and Amtrak corridor fleets are based don't involve the contracting out of operations. Meanwhile Amtrak, VIA and pre-privatization BR are continually hamstrung in operating and planning by short-term political decision making. That in turn contributes to not being able to recruit, develop and maintain talent, because good people get fed up with that nonsense and move on.... and that seems to be where HFR 1.0 has now ended up. How much of the team the YDS built is still at VIA after four years of Ottawa prevarication?

The current governance structure of VIA is not fit for purpose. What are European railway SOEs doing differently at the governance level that empowers them to be successful? It takes more than just a better level of funding.

Terry Johnson
 
The liberals made a deal with the NDP to stay in power until 2025 so hopefully we can make some progress between now and then.

Unfortunately that deal makes it less likely to see acceleration of any ambition. They'll leave this whole thing on the back burner till the Liberals can run on it again in 2025. At that it'll be a political football with the CPC crying that we can't afford it and the NDP complaining about "privatization".

The timeline says it all.
 
ou make some good arguments, but is this incapacity/incompetence common for governments in general, or just common for the US/UK/Canadian governments and SOEs since the Reagan/Thatcher/Mulroney era?
In general. Socialist, centrist, right wing, they all do it. Maintenance is hard to justify to voters. Some of the biggest P3 users were/are left wing French and Italian governments.
With bidding consortia, its highly likely that the best outcome won't be available, because rather than selecting the best option in each area, the owner must choose from the available combinations. For example with GO Expansion if Alstom has the best equipment offering but SNCF the best operating plan that isn't one of the choices.
Each optimize. Then the top two or three go into 'competitive dialog', basically working through each to optimize further.

And you point out a key benefit: the government who is offering a P3 has to lay out all the performance characteristics that are minimum service standards, and identify ones where higher performance earns a higher point score. Instead of conventional contracting where you trust on the government to have done an internal optimization upfront.
However, throwing rolling stock into the mix certainly hasn't helped the Ottawa LRT
Ottawa unfortunately doesn't operate the LRT, so there are misaligned incentives. If going around curves at speed is causing damage, an integrated P3 would reoptimize and decide to either take the performance payment penalty (going slower), make capital upgrades at their own expense to fulfill original specs, or find another solution. Instead, you have operators whose union wants the P3 to fail likely not being the most flexible of workforce.
it seems as though far too many of the external revenue factors and drivers would be just as much beyond the control of anyone managing this on VIA's behalf as they are beyond VIA's control now, resulting in some risks that are very hard to accurately price
They are known risks, and they can price those risks. Then the government can decide eyes open whether to go ahead or not. And that is the point, profit motive is there to try to price as accurately as possible. Whereas a government might balk at paying consultants to figure out these risks, each consortium gets to. In effect, the government gets multiple teams to price the risk, for free or close to free.
Meanwhile Amtrak, VIA and pre-privatization BR are continually hamstrung in operating and planning by short-term political decision making. That in turn contributes to not being able to recruit, develop and maintain talent, because good people get fed up with that nonsense and move on
You know what would be good for developing a talent base: a 30 year contract.
What are European railway SOEs doing differently at the governance level that empowers them to be successful? It takes more than just a better level of funding.
Canada runs 6.48 million tonnes of cargo on average over each km of rail. France? 1.18 million. Germany 1.74 million, UK 0.6 million.
 
In general. Socialist, centrist, right wing, they all do it. Maintenance is hard to justify to voters. Some of the biggest P3 users were/are left wing French and Italian governments.

Each optimize. Then the top two or three go into 'competitive dialog', basically working through each to optimize further.

And you point out a key benefit: the government who is offering a P3 has to lay out all the performance characteristics that are minimum service standards, and identify ones where higher performance earns a higher point score. Instead of conventional contracting where you trust on the government to have done an internal optimization upfront.

Ottawa unfortunately doesn't operate the LRT, so there are misaligned incentives. If going around curves at speed is causing damage, an integrated P3 would reoptimize and decide to either take the performance payment penalty (going slower), make capital upgrades at their own expense to fulfill original specs, or find another solution. Instead, you have operators whose union wants the P3 to fail likely not being the most flexible of workforce.

They are known risks, and they can price those risks. Then the government can decide eyes open whether to go ahead or not. And that is the point, profit motive is there to try to price as accurately as possible. Whereas a government might balk at paying consultants to figure out these risks, each consortium gets to. In effect, the government gets multiple teams to price the risk, for free or close to free.

You know what would be good for developing a talent base: a 30 year contract.

Canada runs 6.48 million tonnes of cargo on average over each km of rail. France? 1.18 million. Germany 1.74 million, UK 0.6 million.
It's pretty clear from Alon Levy's work that there's more than just Freight vs Passenger conflict here.
 
Canada runs 6.48 million tonnes of cargo on average over each km of rail. France? 1.18 million. Germany 1.74 million, UK 0.6 million.
I'm always conflicted by this. I hate that our passenger rail is hampered by freight, but at the same time I'm glad we ship so much by rail. We need to do even more of it, and electrify the freight networks.
 
It's pretty clear from Alon Levy's work that there's more than just Freight vs Passenger conflict here.
Alon doesn't think P3s are a good way to deliver transit. Full stop. Not familiar with much from him other than his tendency to draw fantasy maps and provide high level cost analysis.
 
Alon doesn't think P3s are a good way to deliver transit. Full stop. Not familiar with much from him other than his tendency to draw fantasy maps and provide high level cost analysis.
My interpretation of his main findings thus far are basically:
1. State capacity matters. Government doesn't actually need to do the construction itself, but they need to have the internal expertise to be involved in design, and closely supervise construction, otherwise they get taken for a ride.
2. Operational expertise =\= Construction expertise. Some agencies are good at one but not the other.
3. Relentlessly pursue standardisation of infrastructure: use off the shelf designs for everything possible and avoid reinventing the wheel.
4. Operational improvements are cheaper than infrastructure improvements.

All puns intended.
 
I don't think this has been posted here before:


From the fed's buy and sell website.

Table of contents:

1649283213502.png
 
4. Operational improvements are cheaper than infrastructure improvements.

This is a good point.

Take the VIVA capital expenditures and buy Ontario Savings Bonds with them for $52M/year in interest.

IIRC, TTC charges York Region about $150/hour for bus capital + operations on extended routes. That's 60 buses for 18 hour/day operations which in mixed traffic speeds (15km/h) is still a bus every 2 to 3 minutes from 6am to midnight.

It would be interesting to see what the GTA model spit out as better for ridership. 10 to 20 minute frequencies at 30km/h or 2 minute frequencies @ 15/km/h.


That said, VIA doesn't really have that option. If they tried to dramatically improve frequencies the freight companies would say no. VIA needs authority over the track they run on; York Region already had full authority over the roadways.
 
1. State capacity matters. Government doesn't actually need to do the construction itself, but they need to have the internal expertise to be involved in design, and closely supervise construction, otherwise they get taken for a ride.
All are good points but I think the first one is the most important key to understanding why so many North American transit projects go off the rails. This can be seen in the now classic example of the suboptimal design decisions forced onto the Ottawa LRT and even in the ongoing saga of the Washington metro system's recent difficulties with operating a frequent service without derailments. Buying off the shelf parts and systems won't keep a project on track if the buyer doesn't know what they need.

All puns intended. :)
 

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