Creative Accounting With Subway Operating Costs

The Toronto Star’s Royson James writes today about automation of the TTC’s subway service and the elimination of train crews. His article includes a figure taken from a paper published by the Neptis Foundation which claims:

Converting the TTC subway to UTO [unmanned train operation] could save about $200 million per year, or $2 billion NPV [net present value].

Installation of PSDs [platform screen doors] might cost another $300 million to $500 million.

[Page 51.]

I wrote briefly about the Neptis paper last year, and keep meaning to return to it if only to debunk some of its more outrageous claims. However, the emergence of fantastical statements about the potential benefits of total automation force me to address this separately.

First off, the cost of PSDs is considerably higher than stated in the report. When this was still part of the TTC’s “above the line” budget, the cost stood at roughly $1-billion (about $15m per station).

The Neptis report says that automation could save “about $200 million per year”. This is wildly inaccurate as can be proven in various ways.

The total TTC operating budget for 2014 is $1.6-billion. Of this, at most 80% of the costs are for labour, and only half of that will be for operators who make up roughly 50% of the workforce. This means we are starting with a total cost of everyone who drives a bus, streetcar or subway train of $640-million. Saving almost one third of this by eliminating crews on the subway simply is not credible.

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