[TerryJohnson]

Given the wide range of reactions to the latest HFR announcement, Transport Action Canada is seeking input:

Seeking your views on High Frequency Rail

We would like to hear opinions from our members and supporters to ensure our reaction to the updated High Frequency Rail announcement reflects the consensus of your views.

www.transportaction.ca

 

[Bordercollie]

While GO contracted out their operations staffing (after having assumed a workforce from CN and CP) the GO workforce remains unionised. Given Canadian labour laws and politics, I cannot imagine a P3 arrangement leading to a non-union shop running VIA. However, P3 might well "upset the apple cart" by allowing an organizing drive by a different union. That might or might not be a good thing, depending on how the new union organization performs compared to the status quo..... and that's really only material from the viewpoint of the workers themselves.
However, the proponents to this particular P3 might or might not come from a union-friendly background, so labour relations might take a turn for the better or worse, and that might become a matter of public concern..
In all of this the public is mostly a spectator. The transition might be invisible (as it mostly has been at GO) or it might create turmoil that serves the public far worse than maintaining status quo. Personally, I don't think the potential for change is something to be afraid of.
The bigger issues relate to the transparency of the P3 relationship and the line of sight to things that ought to be a matter of public accountability. There is little in the Ontario experience with P3, be it with ML, 407, or otherwise, that recommends it. The P3 mostly insulates government officials and politicians from being accountable for decisions, and allows them to deflect inquiries and challenges. The Metrolinx experiences with P3 ie Crosstown and Oncorr do not demonstrate responsiveness to the public or direct, pragmatic decisionmaking. At GO, there are very obvious disconnects between the maintenance forces (who are managed by different contractors than the running trades contractor), on-train operations, existing construction projects (different contractors again), and dispatching. One hears too many left-hand, right-hand stories to be impressed with ML's current situation.
Considering that neither VIA nor Transport Canada have the expertise or project management infrastructure for this kind of a project, some form of contracted arrangement to create HFR is inevitable. It may be that contracting the entire design-build-operate-maintain domain might achieve a better overall cost structure, but I have nothing but praise for VIA as a direct employer and operator/maintainer of today's passenger operation, and I would have to see some real benefits before arguing that VIA should not continue to employ its own workforce to operate and maintain the system. I would argue that the design construction and commissioning should be a contract, but a turnkey back to VIA is desirable. PS: VIA does contract out the maintenance of its existing lines, and those contract relationships appear to be effective. If it ain't broke......

- Paul

So they could have a private company build it and then lease it back from them? In a way of track fees or some other agreement?

I guess it's better than having CN own it since you are the exclusive user of that infrastructure.

 

[Darwinkgo]

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.

 

[Bordercollie]

Is the ROW owned by the Crown? Is there a cost to transfer that ownership?

 

[robmausser]

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.

Another reason is that if people wanted the government to do all this, a huge crown corp would have to be setup from scratch to do it. VIA is not setup to do 90% of this. If you think the timelines are slow now, just wait until we have to add the time needed to set all of this up.

Outsourcing this work to P3's means the project can be expedited as much as possible, these are organizations already setup and ready to go for this work, with past expertise and experience.

 

[lenaitch]

Is the ROW owned by the Crown? Is there a cost to transfer that ownership?

I don't think much or any of the proposed route has been assembled yet (outside of the existing operating CP subdivision). The way I understand expropriation legislation, I'm not sure land can be expropriated on behalf of a non-public entity. As far as I know - and stand to be corrected - the Hwy 407 land and infrastructure is in the name of the Crown, and leased to the consortium to operate.

 

[Bordercollie]

I don't think much or any of the proposed route has been assembled yet (outside of the existing operating CP subdivision). The way I understand expropriation legislation, I'm not sure land can be expropriated on behalf of a non-public entity. As far as I know - and stand to be corrected - the Hwy 407 land and infrastructure is in the name of the Crown, and leased to the consortium to operate.

Isn't most of the ROW in tact? The only thing they would need to adjust is curves. When CP abandoned the route did the ROW return to the ownership of crown?

 

[crs1026]

Isn't most of the ROW in tact? The only thing they would need to adjust is curves. When CP abandoned the route did the ROW return to the ownership of crown?

Much of the ROW between Glen Tay and Havelock is now owned by the local municipalities with custodial relationships/agreements with various trails organizations. Bell or other telco's may own or have easements along parts of it.

I expect VIA will want to assemble “rights” but that could take many forms.

And if the plan now includes “enhancements” - such as the proposed bypass around Sharbot Lake - we could see a bigger land acquisition effort, no different than say building a stretch of new 400-series highway.

- Paul

 

[innsertnamehere]

I don't think much or any of the proposed route has been assembled yet (outside of the existing operating CP subdivision). The way I understand expropriation legislation, I'm not sure land can be expropriated on behalf of a non-public entity. As far as I know - and stand to be corrected - the Hwy 407 land and infrastructure is in the name of the Crown, and leased to the consortium to operate.

Private railway companies can expropriate with government approval IIRC - though that's a unique clause dating back from the 19th century that essentially never gets used anymore. Back then expropriation had to be allowed for railways to get their services running as they couldn't reasonably assemble corridors otherwise.

 

[Darwinkgo]

I don't think much or any of the proposed route has been assembled yet (outside of the existing operating CP subdivision). The way I understand expropriation legislation, I'm not sure land can be expropriated on behalf of a non-public entity. As far as I know - and stand to be corrected - the Hwy 407 land and infrastructure is in the name of the Crown, and leased to the consortium to operate.

Land and rights can be expropriated on behalf of corporations. In this case, it would be expropriating for a publicly owned piece of infrastructure, so even if there was an issue, there isn't in this case.

Expropriating for private purposes is much more fraught in the USA.

 

[CapitalSeven]

If there were an easy way to adjust all of those curves, the original builders would have done it. That area is full of swamps, ponds, rocks, and hills, and straightening most of it out would be prohibitively expensive.

 

[EnviroTO]

It is safe to say any newly activated rail in this project would be on property that would be purchased (mostly via expropriation) by the federal government. The P3 would build infrastructure on top of that land with all that infrastructure transferring to the government at the end of the contract period. I would imagine that they would have minimum state of repair measurements so that approaching the end of the P3 period things aren't being left unimproved.

The details of the P3 would need to outline how to handle running rights (I would think VIA would pick up those costs rather than having a bill go from GO/CN/CP to P3 to VIA), how to deal with breach or end of contact (transfer of ownership). With transfer of ownership there is some transfer of liability so I can see not wanting to own anything until the route has been operated for many years.

 

[Darwinkgo]

P3s like this use words to simplify things for the 'everyperson'.

"Own" when coupled with transfer is akin to an exclusive long term lease.

Only in rare cases would a P3 not guarantee maintenance and repair. Typical you'll have rolling stock amortized fully, and hard infrastructure in a year 10, 15, or year 20 condition for your transfer year.

At the end of the P3 term, then as the owner there are two options: offer a new concession; or self operate. The original P3 contract will include how that transition happens.

It is best practice to include provisions for breaking the contract early, if you end up bankrupting the private partner or the public partner's requirements change (like deciding to build a competitor). That being said, going bankrupt is an orderly process so there can be an agreement just to use bankruptcy to ensure continuity of service.

 

[lenaitch]

Land and rights can be expropriated on behalf of corporations. In this case, it would be expropriating for a publicly owned piece of infrastructure, so even if there was an issue, there isn't in this case.

Expropriating for private purposes is much more fraught in the USA.

I think that is key; or at least for a public benefit. A developer can't expropriate a farmer off his land to build a subdivision.

If there were an easy way to adjust all of those curves, the original builders would have done it. That area is full of swamps, ponds, rocks, and hills, and straightening most of it out would be prohibitively expensive.

While it is somewhat challenging terrain, the ROW was originally built using the technology of the day and aiming to accommodate the speeds of the day, both with an eye to return on investment.

 

[robmausser]

If there were an easy way to adjust all of those curves, the original builders would have done it. That area is full of swamps, ponds, rocks, and hills, and straightening most of it out would be prohibitively expensive.

Come off it now. You're comparing 19th Century builders who simply wanted a cheap and easy route for freight and slow passenger trains, and 21st Century builders who want to create an express track. Perhaps prohibitively expensive in the 19th Century but people here with expertise have already shown how straightening a lot of the tracks curviest sections will not be that huge of a deal.

Certainly no more expensive than buying out the CN mainline.