Updated June 8, 2012 at 11:00am: My comments about the Commission’s action appear in an article on the Torontoist website.
Updated June 1, 2012 at 9:15am: The motions passed at the TTC meeting of May 30 have been added at the end of this article. The Commission took a much more conciliatory view of their relationship with Metrolinx than the staff report. I will be writing about this situation in a separate article.
The original May 29 article follows below.
The Supplementary Agenda for the May 30, 2012 TTC meeting includes a report “LRT Projects in Toronto — Project Delivery”.
This report deals with the proposed transfer of responsibility for the Transit City LRT projects on Eglinton, Sheppard, Finch and the SRT replacement from the TTC to Metrolinx and Infrastructure Ontario.
As TTC reports go, this one is rather oddly worded in that it:
- asks the Commission to “note” a number of factors,
- requests that provincial agencies respond to various issues,
- sets an October 31, 2012 deadline for the transfer of project control, and
- proposes that the TTC’s own staff now dedicated to the LRT projects be redeployed internally.
In effect, the TTC is taking their ball and going home rather than play with the guys from down the block. This suggests a strained relationship between agencies notwithstanding the soothing words we hear so often, and a sense that a fed up TTC is telling Queen’s Park to get lost.
From a purely political and administrative point of view, Queen’s Park holds all the cards because they are paying almost the entire cost (with a small Ottawa contribution to Sheppard) for these projects. It’s their money, and they get to say how it will be spent. Whether it will be spent wisely, and how the projects might fare with the TTC on the sidelines, these are questions that won’t be answered for years until we see the results.
It is ironic that future transit revenue streams such as a regional sales tax or some form of auto-based levy should, in fairness, be administered by a regional political entity, not by Queen’s Park, but the foot-dragging on an “Investment Strategy” leaves us with Queen’s Park paying the bills and dictating how the projects will be run. After seizing control, ceding it back to regional politicians will not be an easy step.
Metrolinx has been using TTC’s engineering staff to support the LRT (and, briefly, subway) project planning and early design together with consultants under TTC’s direction. TTC had expected to have some degree of overall project responsibility, but this now is likely to shift to Metrolinx and/or Infrastructure Ontario. Although the legislative authority for Metrolinx and IO to run the show has been in place for years, Metrolinx chose to use the TTC as its agent, at least until now. By joint agreement, the agencies formed:
… a separate organization within the TTC dedicated to the LRT program with an integrated team of TTC, Metrolinx and Infrastructure Ontario staff and consultants led by the Program Manager acceptable to both Metrolinx and the TTC.
In 2010 the draft Metrolinx-TTC-City of Toronto Master Agreement defined the roles and responsibilities of each of the parties and formalized the project governance based on TTC program management of the delivery of the LRT projects. TTC and Metrolinx agreed that this approach to project delivery would satisfy the Metrolinx role as owner while continuing the momentum and progress on project delivery achieved by TTC. (Page 3)
Various schemes were to be used for different types of work, and the acronyms can be confusing.
- DBB (Design Bid Build) In this process the design work is done by consultants working for the TTC and the work with complete specifications is tendered. A construction company builds the work under supervision by the TTC or its agents. The process is described in more detail on page 6.
- DB (Design Build) In this process the design work is done only to about 30% by TTC consultants. The remainder of the design and the construction are tendered. For some major subsystems such as signals, the design is done entirely by the winning bidder.
- DBFM (Design Build Finance Maintain) This process, also known as AFP (Alternate Financing and Procurement), hands an entire block of work to a contracted firm or consortium who provide the design, build the infrastructure, finance the project during (and possibly after) construction, and maintain some or all of the infrastructure for a defined period after completion.
Shuffling the letters of the acronyms does not simply move responsibilities around as a “DB” process implies less direct TTC control than a “DBB”. The party handling the design is not the same in each case. For DBFM it is not yet clear what level of specifications will be completed before the design work moves from the buyer (IO) to a bidding consortium, or how that consortium would interact with various municipal agencies or the public.
Recently, Metrolinx decided to take more control of the projects by assuming responsibility for implementation. IO will be the agent for project delivery presuming that a “value for money” analysis indicates that this is appropriate and the Treasury Board at Queen’s Park approves. At no point has the mechanism by which this “value for money” measure will be calculated been explained to anyone. Given that IO is the fair-haired child of the Provincial government, it would be amazing for any evaluation to say that IO’s role was not financially beneficial. We can assume, therefore, that this is a done deal.
Meanwhile, the TTC commissioned a Peer Review of its LRT project plans. Metrolinx and IO participated in this process. The review panel has extensive experience notably in New York City and Los Angeles (details are in the report on page 5). This review took place in May, well after Metrolinx and IO had begun detailed discussion with the TTC about an AFP approach to most of the projects. Only the Eglinton tunnels would stay as a DBB project because of the advanced status of work on this component.
Metrolinx points to Vancouver’s Canada Line as an example of a successful AFP project, although the TTC points out (as others have already) that the line as implemented was not what was originally proposed. The problems in Vancouver stem from a lack of transparency between the proponent agency, the consortium who built the project, and the public. Whether this situation would be remedied in a Metrolinx/IO project is as much a question of good will and good contract language as it is a function of AFP per se.
The TTC notes that all of the Metrolinx AFP projects would be tendered in less than a year starting in mid 2014, and that reaching 30% design on all of them at once will be challenging. This statement is unclear about who does the 30% design. In other words, if a consortium is going to be responsible for “the whole project”, just how much of a project definition will exist before they bid on the work, and what level of staffing (or consultants) will be needed just to get to the stage where there is a defined work to be tendered. There is an obvious possibility for a loss of expertise in the transition.
The biggest challenge lies with underground stations on the Eglinton line about which the TTC says:
The Metrolinx schedule for Eglinton Crosstown LRT is considered by the TTC and the APTA Peer Review Panel to be extremely challenging and that by necessity it increases the risk of disproportionate disruption to communities.
Underground station construction is the most time intensive part of the project and, as it requires cut and cover construction, has the greatest disruption to the community. The station construction and the extensive utility relocations require about three-four years of construction per in-line station and longer for interchange stations. Once completed one-two years are required for commissioning and testing the project before it can go into service. The Metrolinx schedule does not start final design of the stations until after the AFP contract is awarded in mid 2014. Completing all the station design and construction in four years for opening in 2020 is unrealistic in the opinion of the TTC and the APTA panel.
The Metrolinx schedule carries the risk of disproportionate community disruption. If all of the stations are designed and constructed in the same timeframe, there will inevitably be major disruption for the length of the underground section on Eglinton. In addition, there will be the cumulative impact across the city with Sheppard East LRT and Finch West LRT
construction in the same time period.
AFP requires that the progress made to date on the time critical station designs, be suspended now at about 30% design and re-started once the contract is awarded in mid 2014 — a loss of about two years of progress that could be used to stagger station construction and mitigate disruption if the designs and construction were to proceed.
The construction times cited for stations are quite amazing. It is unclear what type of disruption a community faces during the period, and this is particularly intriguing given that the Transit City EA includes illustrations of how the surface disruption would be minimized by working beneath a decked street. This was never going to be a piece of cake, but suddenly the complexity appears to have grown. The TTC expects Eglinton to be a 10-year project finishing in the 2022-23 time frame.
The major changes the TTC proposes in the Metrolinx schedule are:
- Extend the Eglinton line’s opening date to 2022-23. This would relax the design and construction schedule, and would avoid having all of Eglinton torn up (or at least the station sites) at once.
- Begin the Sheppard LRT construction immediately instead of late 2014.
The TTC criticizes IO for the long lead times on some project starts triggered by the need to more fully specify the design for AFP tendering. If the TTC is in a position to begin construction of Sheppard now, they should be allowed to do so, not tied up in red tape while IO purports to find a way to build the project “better” two years in the future.
Changing these dates should not significantly affect Provincial goals for most of the project delivery. Indeed, IO and Metrolinx need to be much more transparent about the effect of various options rather than just saying “AFP or nothing” for many parts of the project. Unilateralism is not confined to the TTC.
The vehicles and carhouse for Sheppard are separate contracts from the line itself. Is there some overriding reason, other than procurement ideology, for not beginning work on a line that is already well-advanced on its design?
A far more useful discussion, avoided by everyone to date, would look at staging the Eglinton line’s opening. At a minimum, this could be done in two parts (west and east of Yonge), and possibly even three (Jane to Eglinton West, then to Yonge, then to Kennedy). Lines are built and opened in stages all over the world, and nothing (except possibly obstinacy) prevents this from happening here.
When Premier McGuinty announced MoveOntario2020, the premise was that we would build lines quickly to show people what transit could do. The goal now seems to be that they be built as slowly as possible. This is counterproductive especially at a time when debates about new funding sources are on everyone’s mind.
If the consortia who build the projects are expected to finance them with payment coming after the fact either as a lump sum or as a lease-purchase, and if the projects are tendered in very large blocks, this could limit the firms who have the capacity to bid on this work. The TTC seems unclear on the size of the projects citing figures of $1-billion for the surface LRT lines and multi-billions for Eglinton.
However, any of the surface lines include a fleet and carhouse component that is part of their overall billion-dollar estimates. The infrastructure contract for the line would be considerably lower in value. On Eglinton, it is already known that Metrolinx plans to tender stations in small groups and that probably limits each contract to roughly half a billion.
The TTC makes a great issue of the potential effect of construction on neighbourhoods and businesses, and the potential for additional cost as unforeseen circumstances are encountered. This begs the question of how the contract would be written in the first place and whether a consortium would include an allowance for contingencies taking the chance that it has guessed favourably. The problem is as much one of project definition and contract management as it is a public or private sector delivery mechanism.
The real challenge will be for the public sector — IO and Metrolinx — to be willing to hold a consortium to their contract and enforce penalties where necessary. In a worst case scenario, the consortium loses its shirt and IO has the project back in its lap, an embarrassing situation for an advocate of private sector participation. That’s the real issue here — how many problems will be swept under the rug (maybe several rugs) to avoid contract issues coming to public light. This is not a new phenomenon.
The TTC proposes that various approaches be taken to components of the LRT plan (see Page 13). This list is not as different from the Metrolinx proposal as it seems, and the TTC would have done well to include a column with those values. For their part, Metrolinx and IO need to define just what they mean by “AFP” and how much of the design work is still done in the public sector before work is tendered. The two world views may be closer than we think, but the slew of acronyms and their inconsistent definitions confuse the situation.
Page 14 contains an important statement:
Metrolinx would prefer TTC to stay involved in order to build on TTC expertise and utilize the organization that TTC has in place to continue progress on the projects until the project contracts are awarded. Metrolinx would like TTC to continue to be responsible for utility relocation, property acquisition, community relations and communications for the projects.
TTC has dedicated significant resources and effort to planning and implementation of the LRT projects to-date and clearly has an interest in leading the projects through to implementation and operation. However, up to now, TTC has had clear responsibility for the project planning and construction on behalf of Metrolinx. The change to Infrastructure
Ontario AFP will transfer the responsibility for project delivery to the contractor.
As the future operator, TTC will stay involved to provide the performance standards and design review and construction oversight to ensure that the completed project can be handed over to TTC.
Metrolinx would also like TTC to stay involved to provide advice and technical expertise and to continue with community relations through the development of the RFPs. However, if TTC does not have responsibility for or control over the construction of the projects, it cannot realistically conduct effective community relations.
Metrolinx wants TTC involvement, but only up to a point, mainly for some of the messier public-facing sides of the projects. Rather than being the project builders, TTC could wind up as a glorified facilitator, a consultant running public meetings for another agency. That’s not what the TTC had in mind.
In light of the political support IO and Metrolinx enjoy, the TTC proposes to step back to roles directly related to the interfaces with existing TTC systems (e.g. the interchange stations) and for standards relating to the eventual operation of the lines. Everything else would be handed to Metrolinx.
Staff now working on the LRT projects would be absorbed within the TTC displacing consultants now working on other projects.
If this happens, we would come to a sad point in the Transit City saga with its almost complete takeover by Metrolinx. That agency is not well-known for its love of LRT and the survival of the plan overall (or any future LRT projects) is uncertain.
The TTC, Metrolinx and Infrastructure Ontario really need to figure out how to work together. If this is simply a power play by IO to shove TTC aside, then there is little hope for agreement. We don’t have Metrolinx’ side of this debate, and given their secrecy, we are unlikely to ever know what it might be.
Of particular concern is the role Metrolinx would have in future rapid transit lines within Toronto. They are already on record as saying that Waterfront LRT lines are a local responsibility. Where and how long does a transit route have to be to qualify as “regional” and therefore under Metrolinx control? If new revenue sources flow to GTA municipalities, who will be the project owner for new lines?
Maybe Queen’s Park will create a regional board with Mayors and Chairs from the affected municipalities and, this time, let them actually work on the region’s transit problems.
Updated June 1, 2012:
In response to the staff report and presentation, the Commission took a more conciliatory view of Metrolinx and Infrastructure Ontario. Two motions were passed at the meeting (note that these are from the preliminary minutes which will not be official until confirmed at the next Commission meeting).
Moved by: Commissioner Josh Colle
Replace staff recommendations with the following:
It is recommended that the Commission:
1. Confirm its commitment to work with the Province of Ontario, Metrolinx, & Infrastructure Ontario to deliver Toronto’s Light Rail Transit (LRT) program and;
2. Note that TTC has been program managing the delivery of the LRT program in Toronto since 2008 and now that responsibility will transfer to Metrolinx. The TTC intends to continue to assist in the development of the design, build, operate, and/or maintain functions and;
3. Note that the Province of Ontario has indicated that it intends to change project delivery from TTC program management to a model using Alternative Finance and Delivery (AFP) Design Build Finance and Maintain. To further note that while the TTC recognizes it as a viable model to deliver transit infrastructure, the TTC has some concerns about the use of such a model (as outlined in this paper);
4. Request Metrolinx/Infrastructure Ontario to respond to the issues and concerns around project finance, cost, schedule and delivery model raised in this paper and;
5. Inform Metrolinx that the Province of Ontario decision to implement LRT by AFP and Infrastructure Ontario will require the transfer of program management functions, project design, construction and community relations from the TTC Transit Expansion Program to Metrolinx to be completed by October 31, 2012;
6. Direct the Chief Executive Officer (CEO) to commence the reallocation of TTC staff, in consultation and cooperation with Metrolinx, and to the extent possible, from the LRT program to TTC’s on-going state of good repair construction and rehabilitation program and to the Spadina Subway Extension; and
7. Forward this report to the Toronto City Manager, Metrolinx, and the Minister of Transportation & Infrastructure.
8. That the TTC direct staff to expedite the signing of a Master Agreement with Metrolinx and Infrastructure Ontario that outlines provisions such as a governance model, dispute resolution mechanism, and amendment clauses, by the September 2012 Commission Meeting.
The text in boldface is different from the original staff recommendations in the report. Clause 1 is completely new and establishes the Commission’s support for delivery of the LRT network together with provincial agencies.
The amended clause 2 (originally 1) replaces a long recitation of the past work the TTC has done with an acknowledgement that responsibility will move to Metrolinx, but that the TTC will continue to participate in the process.
Clause 3 (originally 2) amends the original text to state that the Commission accepts that AFP is a viable way to deliver projects, it has concern about specifics relating to the LRT plans. The original text did not include an acceptance that AFP could be an appropriate process.
Clause 6 (originally 5) is amended to make the reassignment of staff subject to consultation with Metrolinx so that TTC management cannot pull resources from the LRT projects and trigger transitional problems of staffing and expertise.
Clause 8 (new) directs staff to negotiate with provincial agencies and to bring a Master Agreement to the Commission’s meeting scheduled for September 27, 2012. This holds management’s feet to the fire to produce an agreement or explain why this is not possible on a timely basis.
In short, the Commission has decided that there is no point in waging a campaign against the supposed shortcomings in experience or expertise by Metrolinx and Infrastructure Ontario. Getting the projects built is seen as more important for the City of Toronto than the outcome of any turf war between agencies, and co-operation is the order of the day. How Metrolinx and IO will respond to the concerns raised by the TTC remains to be seen.
A separate motion by Commissioner Peter Milczyn proposed:
The Commission advise Metrolinx and the Province of Ontario that further discussions are required to review whether the TTC should be the operator of all of the new LRT Lines.
The provincial policy on this to date has been that TTC should be the operator, but many details of this arrangement need to be worked out notably the financial arrangements regarding fare revenue and subsidies. Milczyn’s intent is to draw Queen’s Park into a discussion of increasing operating subsidies directly by operating part of the Toronto network.
I will write about the implications of the Commission’s stance on these matters and Metrolinx’ response to them in a separate post.