How Much Will The Spadina Extension Cost (II)?

In a previous article, I reviewed the history of the Toronto York Spadina Subway Extension (TYSSE). This project has been widely reported to be both late and over budget, but details only began to emerge on March 20, 2015 when TTC CEO Andy Byford fired two senior members of the engineering staff.

On March 21, 2015, Byford presented a briefing to the media as a preview of a report to be discussed by the TTC Board on March 26, 2015. This report includes both current information on the project and an October 2012 update that was issued when the TYSSE deadline was shifted to fall 2016.

The key points of the briefing were:

  • The earliest possible opening date for the TYSSE to Vaughan is the end of 2017.
  • Relations between TTC project management and the various contractors working on the TYSSE are badly strained, and this cannot be remedied by those now in charge.
  • Byford recommends that the TTC “retain a third party project-management firm as an incentivized project manager” (the terms of the proposed arrangement are confidential pending execution of the agreement).
  • Alternate schemes for continuing the TYSSE project with TTC staff in part or all of this role will extend the period needed to resolve outstanding issues and reach project completion, and will increase total project costs.
  • Additional funding to keep the project active to the end of 2017 of $150-million is required with Toronto paying $90m and York Region paying $60m. Toronto’s share could come from a TTC operating surplus in 2015 (mistakenly cited as “2014” in the report), property sales and/or deferral of projects. There is no word on how York Region might fund its share of the extra costs.
  • The project is subject to many claims by contractors against the TTC, and some counterclaims on the TTC’s part. The eventual value of settling these is unknown, and this is a potential additional cost beyond the $150m. Whether this can be accommodated by the existing project budget remains to be seen.

Opening Date

Projected opening dates for the TYSSE under various scenarios range from the fourth quarter of 2017 to the second quarter of 2019. Crucial to this range of dates is the speed with which the relationship between the TTC’s project manager and the contractors can be restored to a co-operative basis. The more the existing TTC management team remains in place, the longer this will take. External reviews of the project have concluded that only a complete “reset” of the project can have this effect quickly. This leads to the recommendation of a new, external project management firm to complete the project.

One option that has been discussed both at the TTC and in comments on this site is the idea of opening a first stage of the line only to York University Station. This presents obvious political problems in York Region along the lines “we paid for it, we want what we paid for”, but more importantly there are major operational issues.

York U Station is not designed as a terminal. If it were to be used on a temporary basis, this would require single track operation of service north of Finch West Station, an operation for which the signal system is not designed. (The initial signal contract for the TYSSE is based on conventional, unidirectional block signals, with ATC to be added after the line opens.) Adding a crossover at York U would be extremely expensive because the station approach is a pair of deep bored tunnels, not a simple box structure to which a crossover could be added.

Changing the project to allow a York U opening would delay other parts of the project and contribute to the claims for delays by contractors working on other sub-projects.

A further and important problem at York U is that this station is the least complete of the entire project at 35%.

201503Table5

[Source: Page 10 of TYSSE – Schedule and Budget Change]

Because of the extra work needed to provide for temporary terminal operations at York U, the estimated time saving compared with finishing the line to Vaughan is only a few months, and the project cost would go up by $12m.

Options for a New Project Management Scheme

Four scenarios were examined for a new project management framework:

  • A third party project management firm would be retained on a sole-source basis to take over the project. The estimated cost is one more year (2017) of the existing project team ($70m) plus a large contingent from the management firm ($80).
  • A project management firm would be retained after a Request for Proposals (RFP). This would add six months to the project at an additional cost of about $30m over the sole-source option.
  • A third party firm would act as a facilitator between TTC staff and contractors to resolve outstanding issues, but because the main work of claims management would still be handled by TTC, this would push completion out to the end of 2018. Costs would go up by $140m for two extra years (2017-18) of the TTC project team plus $15m to cover the cost of the facilitator and related consultants.
  • The status quo would prevail with project management and claims being performed largely by TTC staff. This would push completion out to the middle of 2019 at a cost of $175m for the project team (2.5 years) plus $15m for additional staff with claims settlement experience.

Sole sourcing will not sit well with some members of the TTC Board and Council, but the cost in added delay to the project an RFP would require is a strong incentive for this approach.

What is clear in the evaluation of these options is a strong sense that leaving the project in the TTC’s hands will delay, possibly severely, the restoration of amicable relationships with the contractors. This does not speak well of whatever practices had been in place before.

The Need for a “Reset” in Contractor Relationships

In his briefing, Andy Byford was asked whether he bears some responsibility for this situation.  Byford noted that he became CEO in March 2012 and initially concentrated on some of the “quick wins” such as station and vehicle cleanups. However, by 2013 he was concerned with the state of the TYSSE project and commissioned a review by Parsons Brinkerhoff. They concluded that at the current rate of progress, the line would not open until 2019. This report was presented to Byford, and then to the project’s Executive Task Force (with representatives from the sponsoring governments) in July 2014.

In the fall of 2014, Byford commissioned a peer review by the American Public Transit Association (APTA) who concluded that a “project reset” was required, and that incentives were needed to speed up the project and achieve an end-of-2017 opening date.

The findings outlined a variety of concerns including anomalies in the correlation of the contractor’s and project schedules, delays in resolution of contract changes and needs to increase scheduling staff. Its analysis was presented to the ETF on November 20, 2014 and concluded that a project opening date of the end of 2017 could be achieved if a project “reset” was implemented. The “reset” involved contractor partnering, resolution of outstanding contract changes / claims, ‘incentivizing’ contractor schedule acceleration and increased project scheduling / controls. [Page 12]

Over the winter 2014-15, Byford retained Bechtel Construction to review the situation. They agreed with APTA that the project needed “renewed project management”. It is unclear whether this sentiment falls entirely on the TTC or if one or more contractors are difficult to deal with.

[Bechtel’s] report was presented to the TTC and ETF in early February 2015. That report concurred with APTA’s findings of a “reset”, and further added that a change in project management would be required, to deliver an end of 2017 completion date. The report outlined implementation of a new project schedule and contractor incentives, resolve of adversarial contractor relationships, and improvement of processes for cost / contract / claims resolution.

Both APTA and Bechtel agree that the TTC should:

1. Incentivize contractors and obtain agreements for an end of 2017 opening date.
2. Develop a process / timeline to resolve outstanding claims.
3. Establish a collaborative environment to develop a common goal and improve project relationships.

[Page 12]

The APTA and Bechtel reports will not be made public because they contain information about staff and the status of contracts, both of which are protected under confidentiality provisions of the City of Toronto Act. The TTC has advised that they are working on executive summaries that can be released.

Part of the “reset” will be a change in the handling of claims between the TTC and its contractors. Byford would not detail these by number, value or location, but noted that non-payment by TTC on these claims is a major issue for the contractors. They do not welcome requests to speed up their work when they already carry the cost of work for which they have not been paid. Byford reported that in one case the total claims exceed the base value of the contract.

Byford noted that although the final settlements may not give contractors all they wanted, some parts of most claims are certainly valid and partial payment could help to restore the relationships. A related problem that Byford mentioned was that skilled claims adjusters for construction work are in short supply, and the TTC has been unable to fill these positions within the project team.

Working through all of the existing claims is projected to require much of 2015. This will be done with the assistance of an external consultant with expertise in this area.

The Project Budget

The total project budget includes contributions from four governments as shown in Table 2 below. Note that there is accumulated interest only on the Ontario portion because it was paid into a trust fund. Money from other partners arrives on a “pay as you go” basis.

Tables 3 and 4 show the budget based on a 2016 completion. Note that “External Project Management Costs” are separate from the planned new Project Management contract. The “Contract Change Allowance” of $95m may have enough headroom that this account can contribute toward the claims settlements, but this depends on the actual numbers that are as yet unknown.

No contingency remains in the project budget. Although it was originally established at 26%, it was used up years ago. One major issue in project accounting that is not addressed in the current review is a reconciliation of just where the contingency went. As I reported in the first article, at least two major items – vehicles and automatic train control – were not in the original project budget, but they are included now. Where did the “elbow room” for this spending come from?

201503Tables234

[Source: Page 6 of TYSSE – Schedule and Budget Change]

Although the required change in the overall budget has been touted as $150m, there are potential additional costs that have not been included:

  • Claims resolution
  • “Incentives” for project completion

Project Oversight and Governance

According to the report, various bodies have been kept up to date on the status of the project.

The TTC Board has been briefed by staff on numerous occasions about the status of the TYSSE and concerns around contractor(s) performance. In addition, the CEO Report is updated monthly that reflect project status for the board and public. The Executive Task Force have met monthly. The “Move Ontario Trust” has also met monthly to consider project funding requests and other issues. A Federal “Management Committee” established under the Federal contribution agreement for the project has met 4 times a year to receive project updates. [Page 10]

There may have been briefings, but it is unclear just what information was conveyed to the oversight bodies.

As recently as the December 2014 CEO’s Report, the Commission (which was then newly-minted for the John Tory administration) was told:

To date, the TYSSE project is on budget with a total budget of $2,634 Million. The in-service date is targeted for the fall of 2016 however the project is facing a serious schedule challenge. [Page 29]

In the strictest sense, the budgetary claim was true, but only by ignoring the considerable overhangs of pending claims costs and the almost certain need to restructure and extend the project. According to Byford at the media briefing, these problems were not reported at the request of the ETF because the review was still underway.

This is a rather odd situation considering the implications for, among other things, the City of Toronto’s budget that was then in preparation. Conveniently, the real situation with the TYSSE was not unveiled until after Toronto had passed a budget. It is hard to understand the TTC’s CEO withholding information from his own board at the request of an external body. Who, after all, is really in charge of this project?

This is not the first multi-million dollar “oops” in the City’s budget planning. When the City Manager first tabled the budget on January 20, 2015, to the surprise of many watching his presentation, he claimed that Queen’s Park would let Toronto off the hook for downloading of social service costs. [See pages 10-11 of the Budget Committee version of the presentation.] When Queen’s Park challenged this, Toronto found itself with an $86m hole in the 2015 budget and a continuing problem for future years. On the capital planning side, the city’s borrowing plans (including money for the Scarborough Subway) will push the debt level right up to the target maximum of 15% of tax revenue leaving no borrowing headroom for new or expanded projects. Unless additional money can be found from expected surpluses, from one time revenue such as property sales, or from deferral of other capital work, the cupboard is bare.

The City’s $90m share of the extra TYSSE costs will rely on these sources, and more bills will come in from the claim settlements.

Fundamental questions must be asked about the role of the Commission, and of who knew what, when, about the state of the project. Red flags were going up in 2013, and the project review first reported in mid 2014. Where were members of the TTC Board including the “private citizens” who are supposed to bring their experience from the business world to bear on the TTC? How much information was withheld thanks to the “good news” culture of Karen Stintz, TTC Chair from December 2010 to February 2014, and a member of the board until December 2014?

This is not just a question about one subway extension, but about TTC projects and budgets in general. Leslie Barns and the associated work to build a track connection south from Queen Street has been a fiasco of cost overruns and design cock-ups thanks to inadequate investigation of site conditions and a pig-headed unwillingness by the TTC to entertain alternate locations or routes to the new carhouse. The resignalling project on the Yonge-University subway is running late, proving more complex than expected, but also encountering both design and multiple-contractor issues. TTC fleet planning leaves much to be desired, and there is an ongoing reliability issue not just with the aging streetcar fleet, but with the relatively new bus fleet. The TTC’s so-called “key performance indicators” for service quality are a joke to anyone who actually rides the system, and the formulae behind them are constructed to ratify what management has done for years, not to show what is really happening from a rider’s perspective.

According to Andy Byford, he has briefed and warned his board about TYSSE problems since mid 2013. How thoroughly? How much information did he have available until the 2014 project review? Why is the CEO’s report full of superficial information about current year budget performance while long-term project status and budgetary exposures are almost entirely absent? Byford must take some responsibility for his overly simplistic and rosy reports, and TTC board members must answer for the lack of public awareness and debate.

At the media briefing, Byford was asked whether the TTC should just get out of capital project management. He replied that a review of this matter has already been launched by TTC Chair Josh Colle. Not mentioned is the fact that after the Sheppard Subway project, TTC downsized its inhouse engineering section, and even with this, make-work projects sprang up such as the fire ventillation review. Whether the skills needed to head up a big project like the TYSSE were retained, we don’t know.

The antagonistic relationship between TTC as a buyer and its suppliers is no secret, and this surfaces occasionally at public meetings when contractors attempt an end-run around management. This is not just an engineering problem, but also touches procurement practices. The problem, of course, is that when such issues come up, the board is loath to second-guess management, and with good reason – board meetings would become an endless parade of contractors pleading their case to politicians who don’t have the expertise to assess the situation, and whose love for “making things better” can get in the way of good business practice.

Another large project is facing the TTC: the Scarborough Subway Extension. On a dollar value basis, the SSE is bigger than the TYSSE, and the political environment is difficult. The SSE got its start with the premise that it would cost “only” $500m more than the LRT proposal it replaced, a number that has now grown to $1b. Already scope creep (if a behemoth of that size can be said to “creep”) is setting in. Then there is the small matter of SmartTrack with an estimated cost almost three times the SSE.

We hear a lot, especially from Queen’s Park, about the magic of “AFP” (Alternate Finance & Procurement), a fancy term for 3Ps (Public Private Partnerships), and about how we can prevent public sector budget overruns by “transferring risk” to the private sector. The jury is still out on that claim, especially for large transit construction jobs. The underlying problem is with project definition and true risk transfer – if the context for deciding what we will build is political, and if the marching orders are to “get it done”, many controls simply vanish. AFP can only work if there is a detailed contract with specifications of content, quality and long-term reliability.

Simply saying “I want a subway, please put blue tiles in my station, and call me when you’re done” is not acceptable. It is well known from other AFP projects that the contract discipline needed adds about a year to a large project because much more must be specified up front. Moreover, a steely nerve is required from the public partner to hold contractors to performance and penalty clauses, not to waive penalties – the heart of the rationale for AFP – when a contractor pleads poor. Risk transfer must be a reality, not a catchphrase for political speeches.

An important difference with AFP projects is that, at least from the public sector’s viewpoint, contract responsibility lies in one place, the private partner. If there are problems with poor project management and botched co-ordination among subcontractors, that’s the private partner’s problem, and the incentive of a fixed price contract should focus their mind. The worst case scenario, of course, is that the private partner could simply walk away from their commitment as happened with Transport for London at a substantial public cost.

Going forward, Andy Byford intends to spend much more of his time on major project management with Deputy CEO Chris Upfold taking on more of the day-to-day system operations. Byford wants to modernize the TTC, to change attitudes and to fundamentally overhaul the organization with his five year plan to the end of 2017. He expects to be held accountable for completion of the TYSSE on its revised schedule.

He can make a good start with regular, detailed, public reports that truly inform the TTC board, City Council and the public. “Detail” does not mean volumes too thick even for the most dedicated transit watcher, but a quality of information that permits good understanding and flags problems rather than hiding them.

Part of “TTC culture” that Byford cannot reform himself is political. Politicians rarely walk the plank for their grandiose, self-serving schemes and unworkable funding tactics, but organizations turn cartwheels attempting to serve political demands. The TTC must walk a fine line between professionalism and simply becoming a stage manager for photo ops. Professionalism must trump politics. Easier said than done.

44 thoughts on “How Much Will The Spadina Extension Cost (II)?

  1. Where did the arbitrary idea of an opening to York University come from? Why not a first-phase opening to Finch West Station instead?

    I do believe that Finch West has a crossover section, and it is in all likeliness going to be the most heavily used station in this extension. Open it to there first.

    Steve: York U was one of the original ideas for the line’s terminus, but the university didn’t want a flood of feeder bus routes coming into the campus, and the next option was Steeles West. This was before York Region got into the game at all with the Vaughan Centre scheme. Yes, Finch West has a crossover, but I’m not sure it’s worth the effort to get only that far given the politics involved.

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  2. Steve, is there any word on how this could affect FWLRT? With the opening of TYSSE pushed to late 2017 to mid 2019, if there are any more delays, there is a realistic possibility of there being a conflict with FWLRT, which is scheduled to open in 2020.

    Steve: I don’t think we will see the opening pushed back so far it would be in the next term of both the municipal and provincial administrations. As for Finch West, the only holdup is the rate at which Queen’s Park wants to spend money, and the perceived objection of City Council. If Mayor Tory beats back the motion coming to Executive on March 25, and urges Metrolinx to get on with the LRT line, there is no reason it couldn’t be well underway by 2017. Tory has already reaffirmed support for both the Finch and Sheppard LRT lines a few days ago.

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  3. “Well, here’s another nice mess you’ve gotten me into.” Oliver Hardy of Laurel and Hardy fame. Seems to fit here.

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  4. I often wonder why I never hear anything suggesting a phased opening to Finch West? Clearly York University station is the bottleneck on the whole line, and, as you say, it would likely only gain a few months to prioritize it.

    Why not get the low-hanging fruit of opening to Finch West using the attached crossover structure. There are plenty of people currently riding the Finch West bus to Yonge who I am sure would appreciate this phasing.

    It doesn’t have the political oomph of opening all the way to York U, but it has the political gain of opening *something* a year or so earlier than the rest.

    Steve: See my previous comment. Yes, I think this is a good idea, but politically it’s likely dead in the water.

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  5. Self serving politicians & money hungry Consultants & Contractors are not going anywhere. And just a hunch the TTC will be the ones to take the majority of the blame. I wouldn’t want to be a TTC Project Manager that’s for sure.

    Bottom line there’s no accountability at the top in society in general. Not only that countless policies would have to be overhauled in all areas of Government projects to avoid these cost overruns & delays. Whether its budgeting, criteria for retaining consultants/contractors, performance measures etc.

    Even if we hire a consultants to review & review & review will we really be addressing the main issue? I doubt it?

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  6. Steve, since terminal operations are not possible with substantial works and York U station is a laggard in completion, then:

    1. How did it end up being suggested as a temporary terminus and who is responsible for originating it, given the political backlash which followed?
    2. Given that Steeles West is further along, and is to my understanding a designated turnback, would it not be workable to simply bypass York U Station, walling off the platforms and opening it later? It would still remove a substantial number of passengers from bus requirements, and would bring the initial operation to the border of York Region at least.

    Steve: First off, York U is a “logical” terminus given that it is a major destination in its own right. You don’t really expect politicians to be familiar with a track map, do you?

    Second, even if the station were far enough along to at least have trains run through, it represents one of the regularly spaced places for passengers to escape from the tunnel in event of an emergency. If the station is still under construction, this would not be possible, and the line would not meet fire code.

    Even if that were not an issue, a way would have to be found to hand over a partially complete structure for use by the TTC and to deal with operational safety and insurance issues of trains running through a construction site.

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  7. Mark Jackson Brown said:

    “I often wonder why I never hear anything suggesting a phased opening to Finch West? Clearly York University station is the bottleneck on the whole line, and, as you say, it would likely only gain a few months to prioritize it.

    Why not get the low-hanging fruit of opening to Finch West using the attached crossover structure. There are plenty of people currently riding the Finch West bus to Yonge who I am sure would appreciate this phasing.

    It doesn’t have the political oomph of opening all the way to York U, but it has the political gain of opening *something* a year or so earlier than the rest.”

    Steve said:

    “See my previous comment. Yes, I think this is a good idea, but politically it’s likely dead in the water.”

    I would think that a opening the station at Finch would at least provide greatly improved bus access to the University. However, what really bothers me is the degree to which the timetable has slipped at least in terms of what was the public position very recently.

    How can CTV be reporting “set to be complete fall 2016” couple of months ago, and now there is a risk of losing years, with a possible opening in 2019.

    Steve: I am intrigued by how often the 2019 date is cited, rather the way that $1.5b is claimed to be the base cost of the project. Yes, clearly, the TTC was putting out bad info as recently as the end of January even though they already knew differently. The suppression of that information is the key story, and the parallels to other misrepresentations affecting the City’s budget.

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  8. Dowlingm said: Given that Steeles West is further along, and is to my understanding a designated turnback…

    A TTC report for Steeles West Station says: While development of the conceptual design for [Steeles West] station was advancing, a decision was made to relocate the turnback facility to the north end of Finch West Station. This was done to reduce construction cost and to address opposition from major stakeholders to the temporary and permanent disruption of existing infrastructure and planned development around Steeles West Station. This reduced the size of Steeles West Station down to two tracks and one island platform, requiring the design consultant to develop a new concept for the station layout.

    Thus, it seems there won’t be any turnbacks at Steeles West even after the line fully opens.

    Steve: I believe that this may be a reference to a proposed three-track section north of the station. There are photos of both Finch and Steeles crossovers in the media briefing we received Friday at the TTC. This part of the package is not online on the agenda page. There is a photo of the crossover installation in progress on the project’s website.

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  9. Steve writes:

    “incentives were needed to speed up the project”

    I’m gonna side with the TTC on this one.

    I get that the report is telling it like it is but for ****’s sake! This is plain childish. Cost overruns are one thing but incentives to do a job that you were paid for? Are these projects just too boring for you, contractors? Do you lack the motivation? Are you thinking of going back to school and majoring in underwater basket weaving? This is your JOB. Suck it up and get a move on. Be professional.

    Steve: I didn’t write that incentives are needed, the TTC did.

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  10. The crossover tracks are at Finch West.

    Am I wrong?

    Steve: No. There are crossovers at Finch and at Steeles, but not at York U because the university did not want this to be even an interim terminal station.

    No one is going to crack open the tunnel north of York U to build a crossover track.

    That is a 2 year process and costs about $50+ million ( est)

    Trains are passing through Union station where there is substantial reno’s to subway platforms and access corridors. Someone figured this out.

    Steve: The distinction is that the portion of Union station where work is taking place is beside, not on top of the operating trains and passengers. Also, the TTC owns the station. They do not yet own York U station, the contractor does.

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  11. Without being indelicate, but: Byford has a liberal arts degree from the distant past. He came to the TTC from the “customer relations” side of the transit business. He is not from the “hard” side of transit management. By comparison, as you know well, David Gunn is a Harvard M.B.A.; Gary Webster is a P.Eng.

    Q: Have you any confidence in Byford’s project management or operational capabilities for the go forward, either to finish the York Sorbara Subway or (G-d forbid) advance the SSE? He will single-handedly be responsible for yet-another inter-generational, multi-billion dollar cock-up if he cannot perform to Singapore-levels of performance…

    Easy implication: I have nil faith in the oversight competency of the TTC board as presently constituted.

    Steve: I think that Byford has to ensure that he is being given accurate, timely information from his staff, and his decision to focus on that side of the operation will at least ensure it gets some attention. David Gunn had a really good “BS meter”, and knew bad info when he saw it. As for Singapore, Byford has the good sense to realize that some of the claims previously made for increased capacity on the YUS cannot be achieved for various reasons, and this led to his advocacy for the DRL with a higher priority than previous TTC managers.

    The SSE is a political decision. Once we see what sort of demand estimates arise from a network with both the SSE and GO/RER and/or SmartTrack, the question will be whether Byford will support some modified SSE. A lot will probably depend on the political level. I don’t sense that he is willing to be ground up and spat out by petulant Scarboro politicians who don’t want to hear what a crock their pet subway line is.

    As for oversight by the board, they have a huge learning curve and a desperate need to actually do their jobs by demanding more information and discussing the implications of problems such as those we see on the TYSSE in public.

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  12. It seems funny how Byford who is about to start his third year seems to deflect that this is happening under his watch. Not only are there issues between TTC and contractors but there are major issues between the TTC and its unionized workers. Morale is horrible thus gets portrayed negatively towards its customers.

    I wonder when Byford will accept responsibility for all this that has happened under his watch instead of passing the buck. Byford is too much of a politician to lead a transit agency properly. He quickly caved to the Subways, Subways, Subways of Rob Ford immediately after Gary Webster was fired. At least Webster had the cojones to tell politicians the way it is instead of pandering the political whims. How can TTC employees respect a leader who will throw them under the bus to protect his own future???

    The only improvements we’ve seen since Byford has taken over is a few cleaner trains and cleaner washrooms. Byford is also failing in making TTC stations accessible and will fail to meet the legislated completion date. It seems that Byford has failed on many fronts yet his monthly performance report card (which is an utter joke) doesn’t seem to mention all these failures anywhere. Byford presents the TTC as smelling like roses but under his leadership, there is nothing but strife which is evident in this recent Spadina Subway extension. Don’t you think ridding the strife between the TTC and it unionized workers AND between the TTC and its contractors should’ve been job one??? I personally think Byford is the one who needs to be fired for misleading the TTC board, it’s employees and the public. When will enough be enough.?

    Transit in Toronto has become a joke and TTC now stands for “Take The Car”.

    Steve: I think Byford has reached the limit of what he can palm off as “not on my watch”. He did initiate a review of the TYSSE in 2013 with further reports in 2014, but according to his statement at the press briefing, the problems with the project were suppressed by the Executive Task Force who have overall responsibility until quite recently. Certainly it appears that this info was withheld until after Toronto’s 2015 budget was through Council.

    Byford made a big mistake concentrating on the superficial “quick wins” (clean trains, etc) in his early days, and too much of his efforts went to “soft” issues in the customer charter that did not address hard problems with the organization. Tellingly, the committee struck to report on customer initiatives came under the sway of TTC management, and more of its recommendations had to do with ill-behaved customers than with improvements the TTC should have been making. That should have resulted in someone seeking alternate employment, but we must also remember that the era of Karen Stintz as chair was not exactly noteworthy for serious discussions, only smiles and photo ops. Byford was “playing to the house”, and now must make up for his focus being in the wrong place.

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  13. Steve said:

    “Yes, Finch West has a crossover, but I’m not sure it’s worth the effort to get only that far given the politics involved.”

    Well, let’s see what they decide; but I have a couple of thoughts:

    1) For York region, an interim Finch West terminus may be easier to swallow than an interim York U terminus. With an interim Finch West terminus, they will be reasonably sure that York U will not be left without subway service for long, and hence the whole project will be completed soon.

    2) Assuming that the Finch West station is capable of being a terminus, and is ready long before York U; will the public accept a decision not to use the infrastructure that is service-ready?

    Steve: “The public” in your statement is multiple audiences — the folks for whom a Finch West Station shortens their trip, the folks for whom it does not, the politicians who get or miss out on photo ops depending on what is opened. If York Region thinks that a Finch West opening has been done at the expense of getting “their” piece of the line into service, they will not be pleased.

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  14. Steve wrote: “The estimated cost is one more year (2017) of the existing project team ($70m) plus a large contingent from the management firm ($80).”

    Steve, consider the following back-of-the-envelope calculation:

    -Average Staff Salary of $100k (a very real number at the TTC)
    -Overhead of 100% for benefits, office space, disbursements, vehicles, office supplies, etc. (exaggerated, but bear with me)
    -This means the TTC has 350 ($70M / $0.2M per person) in-house staff on this project on a full-time basis

    Does it really make sense that there are 350 people on this project full-time, and they want to hire a consultant to bring in another 400 people (assuming same calculations for costs)? Or is there something else going on here that is being hidden?

    I would be surprised if all the contractors on the project combined has a total full-time equivalent staff of 750 people working on the entire extension, and it is the contractor that is doing the bulk of the work.

    Am I naive for thinking that the problem might be that the TTC has too many people working on this project from their end, which is the main cause of the delays and costs?

    Steve: Part of that project team whose time must be extended are staff (many on contract) who look after construction supervision. If completion of the infrastructure is going to drag on, these people have to stay on the payroll longer. This is not just a case of back office design and management staff. I believe that there is a breakdown of the staffing somewhere, and if I can track it down, I will add it to the article.

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  15. Hi Steve,

    A few questions:

    1) We all know the Province and IO is pushing for P3 on every project it undertakes (hospitals, the Crosstown, and who knows what else at this point), have we now reached a point of no return where every project of significance with the TTC will be a P3? If so, could we see a very real scenario of, much like the Crosstown, Metrolinx owning all Toronto-related projects and infrastructure and the TTC never undertaking a project as manager but simply operating transit only?
    2) Where/when did it all go wrong on this project?
    3) With this damage to its credibility, it’s only a matter of time before elected officials jump on the TTC and find a way to “fix” it, and end up doing more damage to it – what becomes of the TTC moving forward? (I realize this is purely speculation at this point but examples like this can sometimes mark the beginning of the end) More calls for private transit providers? Metrolinx taking over the TTC?

    Steve: The underlying premise of P3s is that the private sector can “do it better” because there are natural incentives in a profit making context, and that the extra cost is offset by shifting more responsibility (a) to that environment and (b) to organizations that live and breathe the type of work they are doing. Whether this is actually true will vary from case to case. The Provincial Auditor has some rather unkind thoughts on the matter.

    Ontario has used P3s to design, construct and operate buildings, and part of the current Metrolinx work is structured that way. For example, a carhouse would be built and maintained by the private sector even though the work carried on inside it might be done by the public sector. In other situations, such as a subway tunnel, the private partner’s responsibility may end with construction completion. Of course, future operation and maintenance may be contracted out with GO Transit’s rail service being a good example. This is simply outsourcing, or avoidance of creating an “in house” structure and staff. From Queen’s Park’s viewpoint, there is no reason for the TTC to be “operating” the Crosstown beyond the political consideration of the conflict between this model and the existing transit system. Structurally, TTC will be given an untendered contract to operate the line, but this could be changed in the future. We still don’t know just how extensive TTC’s involvement will be beyond just driving trains and managing service

    The larger question is whether the outsourcing will provide a “better” service. Problems here can arise in the management of the private partner to deliver and in the original specification of our requirements. In some cases, forcing the private partner to live up to their contract has led to high profile defaults with the public sector picking up the pieces. We are not far enough “down the track” on many P3s to see how they perform as assets age and the need for ongoing maintenance and renewal grows. This is an area where the public sector is hurting a lot because the initial life of many structures — our transit system, roads and utilities — built many decades ago, has been used up and we face substantial costs to rebuild what we once took for granted. Comparing costs between relatively new assets and a portfolio of older ones can be very misleading.

    All of this happens over a timeframe longer than the political (or even the organizational) memory, let alone any sense of responsibility or retribution for past blunders. We can all point to mistakes of the McGuinty, Harris, Rae, Peterson eras and more, but our only recourse is to the ballot box, and there’s no guarantee a new crew will be any better than their predecessors.

    The TYSSE has been around in one form or another for a very long time. Some of its cost escalation is a direct result of political meddling, some is a direct result of poor design, and some is a question of project management including the relationship between the TTC as “prime contractor” for a consortium of funders and the contractors actually building the project. There are many lessons to be learned here, but it is the public sector’s competence that is taking it on the chin.

    What is striking is the degree to which this is portrayed as a professional, technical failure even though serious questions should be asked about the oversight at both the senior management and political levels. There is some evidence of a “willful blindness”, a hope that somehow everything will work out.

    Talk about Metrolinx “taking over” implies that this organization is some paragon among agencies. It is not, but it has two big advantages over the TTC. First, it is much smaller and operates a relatively simple system of buses and trains that, until fairly recently, operated over infrastructure built and maintained by others. Even with ownership of many rail corridors shifting to Metrolinx, the infrastructure is less capital intensive and the service level considerably lower than would be found on a subway network. Second, Metrolinx operates in a political environment where it can pick the low hanging fruit in choosing what service to provide unlike the TTC which is expected to provide tolerably good service throughout the 416 7×24 on a dense route network. When did we ever see demonstrations at Queen’s Park demanding better GO bus and train service? In this context, Metrolinx can seem like the “better choice” to operate transit, but they have never had to address the reality of a big local transit operation.

    Anyone who has dealt with “public participation” by provincial agencies, including GO and Metrolinx, knows that this can be an unpleasant, unrewarding experience. Unlike the TTC, where the board and City Council hear loud complaints on a routine basis, Metrolinx sits isolated by its small customer base and a political environment where transit in the GTHA is not exactly a top government priority or a threat to its existence.

    I suspect that the real insurance the TTC has against a takeover of day-to-day operations is that this is really too much for the province to bite off, especially when the obvious question would be why other cities should not have better local transit with provincial funding. But the TTC must change, and more importantly the political masters of the TTC must treat it as more than an opportunity for sound bites and photo ops while avoiding hard issues of proper funding and oversight of the organization. Where this will go, I cannot say. Much depends on whether our local politicians are capable of more responsible behaviour than beating their collective chests and claiming that there is always “gravy” to be found.

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  16. I had some background with both TTC and Metrolinx, and could compare to observations at the Greater Toronto Airports Authority (GTAA). The GTAA took over from Transport Canada, and when doing the new Terminal 1 capital project, they brought in a team of development staff mainly on fixed term contracts. When the project was over, we knew we would be moving on. The GTAA had a small team of senior execs to provide oversight. The 4 billion dollar project ended up on time and on budget..

    By contrast, there was an internal group of development staff handling minor capital projects. These projects never ended, and could never be measured. A taxiway project would have phase 2, phase 3, phase 4, etc. Every phase was on time – on budget, but there never was a final phase. The prime goal was job security for that development team.

    With TTC, the permanent engineering team has a similar philosophy. Part of the culture is based on the need for job security in an unpredictable environment. Projects are routinely started, then delayed, modified or cancelled. The capital budget is up for review on an annual basis. Every contract has a provision that says it can be cancelled at any time. The managers are rated on how the annual spending meets the annual budgets. Overall costs and overall schedules are so convoluted that they are only a secondary concern.

    If TTC could start a 10 year project, like say Transit City, or the SSE, with a committed budget and time frame approved on day one, and then stand back and allow management to implement the plan, then the management team could be held accountable. But in reality we change political leadership, modify project scope during construction, and cancel projects while they are in progress. The TTC capital team is pretty cynical about their environment, and rightly so.

    Metrolinx initially planned to have TTC manage the Transit City project, and Metrolinx would simply be the funding partner. This changed because of disagreements on the procurement philosophy. TTC wanted to piece out the projects on their traditional basis, with many separate design contracts for each piece of the line, and many small construction contracts. The staff team would have been huge, and TTC would have great control over every piece. Metrolinx demanded an AFP process, with a small number of huge AFP contracts awarded, and a much smaller internal team. Metrolinx has been continually been pushing for time and cost control.

    Time will tell how well the Metrolinx process works. The Eglinton Crosstown has the tunneling awarded on a traditional basis, and the remainder of the line will be AFP. My thought is that if you want to control the budget and schedule, you need to finalize the scope up front, and then award as few contracts as possible to get it built.

    Steve: I am not in the least surprised by your comments. Over the years, I watched from the outside the ebb and flow of capital projects, and the amazing way that new endless projects sprang up to fill the void. Fire ventillation became a big issue just when Engineering and Construction had nothing to do, and it would have provided decades of construction projects. Oddly enough, the priority of this work dropped off once (a) the true cost and complexity became evident and (b) other work materialized. I could say the same about platform doors. Both of these have some justification, depending on your philosophy, but that’s not the same as priority.

    As to the year-by-year budget issues, one big place I saw that was the reconstruction of Broadview Station which was artificially subdivided (and made more complex) by limits on capital flow. I have already remarked about the peculiar format of the CEO’s report in which spending on the TYSSE was reported on a “current year budget” basis because the important issue was annual cash flow (a city finance issue), not overall project status.

    One big disappointment for me with Andy Byford is that the format of metrics in his monthly report have gone unchallenged for too long, and what is reported is often meaningless. As an experienced manager he should have dealt with this sooner. Left to their own devices, too many managers will construct metrics that look good in the aggregate and mask specific underlying problems that would show up with more detail. Maybe there is better, more detailed information available at the staff level, but if so, why isn’t it published?

    Why doesn’t the TTC Board demand better info? That’s a whole other story.

    On the subject of small contracts vs large: The Eglinton project has two sets of tunneling work east and west of Yonge. The TYSSE has two sets of tunneling work (the “north” and “south” tunnels), each of which was done in two stages. These contracts appear to have gone smoothly without budget problems. This is probably not a good point of comparison between the projects, or to put it another way, boring tunnels seems to be comparatively straightforward. The station contracts have been quite another matter. Each has been designed and built as a separate project, and there have been many problems with design changes and unexpected site conditions, notably a higher than expected water table.

    The TYSSE stations were to be showpieces. That was a political decision, not a technical one, although it might be argued that the designs produced were a tad rich for the project budget. Several factors have driven up station costs, and we have yet to see a full accounting of all changes including design modifications to simplify construction and reduce cost. There has never been any public report to the Commission addressing the ongoing construction progress and issues, only the occasional overall project progress information.

    On Eglinton, Metrolinx is tendering the stations as a big package, and there have been complaints from some parts of the industry that many firms are unable to bid on such a large amount of work as one project. They may wind up as subcontractors, who knows, but the job of managing them will fall to the prime contractor, not Metrolinx. The station designs are quite simple, and there is no attempt to build showpiece architecture if only because the hope is that the surface facilities will eventually be incorporated into developments.

    This is made somewhat simpler on Eglinton by the fact that there are few bus interchange stations along the way. At Mount Dennis, the terminal is incorporated into the larger redevelopment of the Kodak site primarily for the maintenance yard. There is a small offstreet loop at Keele, and an even smaller one at Caledonia. Eglinton West is an existing station, and at Eglinton/Yonge, a much smaller interchange for the few remaining services will be integrated with whatever goes on the site eventually. Don Mills will have a bus loop on the northeast corner, and if this isn’t designed to permit development above, somebody is missing an obvious lucrative chance. The only remaining interchange is at the existing Kennedy Station.

    The station contracts are about to be let, and we will see just how effectively they proceed.

    Thanks for your insider’s view.

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  17. Steve said:

    “But the TTC must change, and more importantly the political masters of the TTC must treat it as more than an opportunity for sound bites and photo ops while avoiding hard issues of proper funding and oversight of the organization. Where this will go, I cannot say. Much depends on whether our local politicians are capable of more responsible behaviour than beating their collective chests and claiming that there is always “gravy” to be found.”

    Steve, I think this will also require a large portion of the public taking active involvement in how the TTC operates, and the degree to which their current failures are a creation of political decisions and interference, and the extent to which it is simply a question of management failure.

    Treating the TTC as having cuts available before really looking, and spending the time to understand the impact, would perforce have done tremendous damage to a organisational culture, that will take a great deal of good management and focused attention to repair. Unfortunately this would mean less time to focus on other things, like contract management. I do not know whether Byford is the right man, but the cuts without real consideration made by city council, and the firing of his predecessor for not altering a position that was based on clear evidence, would make what would be an extremely difficult job, virtually impossible.

    The attention paid on clean stations and buses is also a question in taking pride in your work, and maybe an important part to restoring a service ethic. There is a clear need to have the public and at least some of council start to focus on the service the TTC does offer, and also what can reasonably be done to improve it (like perhaps headway management). When the TTC succeeds this too needs to be recognized.

    Steve: We have been waiting for some time for an improved way to measure service quality. It was supposed to appear a year ago, but will, I believe, finally show up at this week’s board meeting as part of a report on TTC Modernization. The details are not yet online.

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  18. If York Region thinks that a Finch West opening has been done at the expense of getting “their” piece of the line into service, they will not be pleased.

    Has it come to this level of childishness? “If I can’t have the candy then NOBODY can!”

    Steve: That, in effect, was the reaction of the Minister of Transportation (whose riding is, wait for it, Vaughan). I am reminded of the Monty Python sketch “The Knights Who Say Ni” and their desire for a shrubbery.

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  19. While the TTC project management team (which itself consists of permanent TTC staff, contract positions and private sector consultants) could have certainly done a much better job managing and reporting on the project, I think everyone shares responsibility for failure including the politicians who wanted extravagant stations but did not want to pay for them, the private consultants who could not design to the building and electrical codes leading to significant redesign after the drawings were issued for construction, and Contractors who could not plan and coordinate site activities or negotiate with their own subs while taking every opportunity for contract change/variations and claims for the most absurd reasons to account for the low bids.

    Obviously it became difficult for the TTC team to justify and pay off such claims which resulted in constant conflicts, stand offs and potential litigation. This in turn led to extremely strained relationships between all the parties involved to the point that someone had to leave. It is very difficult to replace Contractors who have mobilized vast resources at site without substantial financial repercussions, and so it is best to replace the project management team.

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  20. Richard L | March 21, 2015 at 7:39 pm said:

    “…A TTC report for Steeles West Station says: While development of the conceptual design for [Steeles West] station was advancing, a decision was made to relocate the turnback facility to the north end of Finch West Station. … This reduced the size of Steeles West Station down to two tracks and one island platform, requiring the design consultant to develop a new concept for the station layout. “

    Although it’s since been changed, I’m just curious what the track/platform layout was for Steeles West in the original (2006 I think) EA. The TTC report linked in the comment above talks of “… an expanded station layout incorporating an additional station platform and turnback track to accommodate short turns and emergency management for train service disruptions.”

    I’m fascinated as to how this layout would have looked/worked as I don’t think anywhere else in the TTC subway there is such an additional platform. If anyone has diagrams (either from the original unamended EA or from anywhere else) I’d be very grateful if you could share them.

    Thanks very much!

    Steve: The original EA (a very long document) includes the original description which includes crossovers south of both Finch West and Steeles West Stations. At the time of the EA, Steeles West was to be a terminal, and a three-track section was to be built north of the station. By an EA amendment, this was shifted further south on the line, but the crossover at Steeles West remains.

    The EA does not talk about a three-track station, only a box structure wide enough that a third track would fit beyond the north end of the platform. I believe that the reference to three platforms is an error.

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  21. One of the clear lessons should be: don’t build subways into lower density sprawl, even if the $ come from the province.

    Steve: More to the point, when a subway turns into a monument to {insert name of politician/municipality here} rather than a well planned piece of transit infrastructure, cost controls are a secondary concern.

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  22. Steve said:

    “We have been waiting for some time for an improved way to measure service quality. It was supposed to appear a year ago, but will, I believe, finally show up at this week’s board meeting as part of a report on TTC Modernization. The details are not yet online.”

    I hope that this will be a set of measures that will allow them to actually show actual service levels, and thus the real issues, success and failure. It will at least give them something to strive for. I would also hope that management can get together the union and bring in headway management, and start to see the actual performance of routes. The TTC needs to be allow to focus on a smaller definition of success. The resources need to be made available to expand the bus fleet soon, and the TTC has to measure real service in terms of crowding, time between vehicles etc. It should allow itself to be removed from forward planning for the heaviest routes (subway and LRT), and allow the city planning department to take lead in these areas, as there appears to be too much in the way of internal politics in these areas within the TTC and they are a distraction.

    PS Crowding measures need to not reflect some mass average, but actually show a distribution and count of vehicles over a reasonable maximum state.

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  23. Does this mean that the Usual Suspects who have been yelling that the “St. Clair Boondoggle” discredits all LRT now yell just as hard that all subways are discredited?

    Steve: You have a truly evil mind!

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  24. “Anon”

    Good post.

    I worked for a Contractor as a Project Manager for three TTC subway contracts. Each were very, very different due to many circumstances.

    Many of the comment posted here are very subjective.

    There are contracts in place for all of the projects (i.e. many) associated with the YUS extension. Rules for dealing with disputes are in the contracts.

    It will be a long walk.

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  25. While the TTC project management team (which itself consists of permanent TTC staff, contract positions and private sector consultants) could have certainly done a much better job managing and reporting on the project, I think everyone shares responsibility for failure including the politicians who wanted extravagant stations but did not want to pay for them, the private consultants who could not design to the building and electrical codes leading to significant redesign after the drawings were issued for construction, and Contractors who could not plan and coordinate site activities or negotiate with their own subs while taking every opportunity for contract change/variations and claims for the most absurd reasons to account for the low bids.

    Obviously it became difficult for the TTC team to justify and pay off such claims which resulted in constant conflicts, stand offs and potential litigation. This in turn led to extremely strained relationships between all the parties involved to the point that someone had to leave. It is very difficult to replace Contractors who have mobilized vast resources at site without substantial financial repercussions, and so it is best to replace the project management team.

    Joe M:

    Well said.

    I’ve personally worked & quoted on many construction contracts for Government projects. As the lowest bidder our first job is to identify as many consultant design errors as possible upfront so we can measure how low our bid can be & plan how to accumulate contingency since bidding at fair value will never win a contract. And let me tell you these consultants are also lowest bidders & the poor quality & “unforseen” leaves contractors with an abundance of justifiable extra claims.

    Again what’s stated above is just one of the issues. All parties have their hands tied by the system. But in the end we in the private sector need to turn a profit & whether a project is on-time or even built as spec’d.

    There’s no performance measure or financial holdback you can fairly place on a lowest bid contractor that can change the outcome for these projects since they are all too severely under budgeted & poorly designed from the start.

    The whole system is severely broken & trying to point the finger anywhere but Politicians & the insane policies they’ve created just puts another bandaid on the massive wound & is unfair to both internal & external parties.

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  26. Joe M said:

    “I’ve personally worked & quoted on many construction contracts for Government projects. As the lowest bidder our first job is to identify as many consultant design errors as possible upfront so we can measure how low our bid can be & plan how to accumulate contingency since bidding at fair value will never win a contract. And let me tell you these consultants are also lowest bidders & the poor quality & “unforseen” leaves contractors with an abundance of justifiable extra claims.”

    This itself is a huge issue in terms of project management, and a good reason to tightly qualify, and actually be prepared to pay a little extra up front, and even within the construction phase. The problem is of course, that if you push the risk onto the contractor they will quote so as to cover those risks, as previously mentioned. I would argue however, that while both the initial and final costs may be a little higher that way, getting rid of the artifice in the process would be worthwhile. While in this case it would likely have added 100 million to the final costs, we would have been fully aware from the get go that this would be a 3$ billion project and would have had to justify it immediately.

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  27. 1. What a mess!! Project is now over 400M, need another 150M to meet end of 2017 deadline, then need money for claims, court cost, attorneys, etc…..
    2. I don’t believe we would see 100% complete subway stations by end of 2017, just look how long it took to build the Sheppard Stations!!

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  28. @”bLuNt_wAcO”

    Statement # 1- is not really correct but there are a number of outstanding legal claims.
    Statement # 2 – most stations except for York U should be substantially complete by maybe Sept 2015. Then TTC needs a year for commissioning.

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  29. @RobInNorthToronto
    Statement 1 is absolutely correct, name one thing that’s not correct about it!!
    Statement 2 You don’t make sense at all. Byford said end of 2017 by your logic the stations will be ready by Sept 2016!! I’m willing to bet that even end of 2017 is not realistic.

    Bottom line, COT and province are in deep water. There is no accountability, integrity, transparency and they continue to waste tax payers money. When such system allows such authorities to take advantage of it then system is simply corrupt and tax payers are on the hook.

    Steve: I would be careful of the word “corrupt” as this implies that someone has a financial benefit from poor contract management. Waste? Yes. Out of control? Yes. Lack of Integrity? Certainly yes in the sense that Councillors who claim to defend “taxpayers” have been asleep at the switch and lose their right to the high ground when they don’t do their job.

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  30. My rant on this subject part 2

    Steve writes:

    Moreover, a steely nerve is required from the public partner to hold contractors to [penalties]

    Thinking outside the penalty’ box. How does the actual payment work in this case? Has the city’s portion left our coffers yet? Could it be withheld to put pressure on the contractors? Granted they’d probably seek legal action but even in trying so and delaying the cash flow we might spurn some action. A missed quarterly bonus and some belt tightening on _their_ end might do them some good.

    Steve: There is always a holdback on any contract that is not released until final acceptance of the work, typically 10%. However, it is possible that the claims and counterclaims have exceeded this level and this gets us into the delicate position of determining whether a contractor, pushed hard enough, might just walk away. Mind you, they will have a bond on their work, and defaulting won’t help their ability to be bonded for future contracts. Also, there is the question of whether a threat to invoke penalties would be counterproductive. The whole dispute could wind up in court, and meanwhile TTC would not have use of whatever was the subject of the action.

    I agree with your description of the ineptitude in the upper echelons of the TTC on several points. However, with regards to the Spadina subway extension, I think its not so much a problem that project management is inept at the top of the TTC but that they lack muscle in dealing with the private sector (and the government). There is a distinction between antagonistic and forceful. And in other dealings, like the new streetcars, the TTC has come off like a whiny child demanding good on a promise.

    This comes up again with TYSSE. Both are guilty here, the kid for asking to watch TV in a sneaky way and mom for promising yes without really understanding what she said yes to. Except the private sector is no parent and does not have anything close to the kid’s or city’s best interests at heart. They are capitalizing on opportunity, prepared or not, deserving or not, capable or not, to make money for their shareholders. From the looks of it they don’t care about doing a good job on time so that the citizens of the city can get the transit they paid for. They don’t care that their inability to complete these things in reasonable time and cost creates political strife and gives rise to seriously unhealthy vitriol from penny pinching politicians to set us back even further. In the end, they’re happy to be transparent and accountable (to their shareholders) and the new transparent, accountable TTC has even more reasons for you, the citizen, why the project is late and yet another auditor’s bill. So its up to the TTC to be forceful with their contractors to make sure their work gets done and forceful with the government to make sure they don’t get projects that are doomed to be money pits.

    Alright I’m done.

    Steve: However, there is also a responsibility to involve the political layer and the public when projects are in trouble when this will have an effect on expected delivery dates, service or project costs.

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  31. Rob Ford showcased to us in the limelight that Politicians are above any form of accountability or rules.

    If we are unable to ever fix this root case we can never expect projects to be planned or delivered in an efficient manner.

    Blame will continue to be thrown at Managers, Engineers, Consultants & Contractors. Not only will billions of dollars continue to be wasted throughout all phases of future projects we will always be forced to pay the insane cost of legal fees as all parties try to sort out the circus in the courts.

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  32. Joe M said:

    “If we are unable to ever fix this root case we can never expect projects to be planned or delivered in an efficient manner.

    Blame will continue to be thrown at Managers, Engineers, Consultants & Contractors. Not only will billions of dollars continue to be wasted throughout all phases of future projects we will always be forced to pay the insane cost of legal fees as all parties try to sort out the circus in the courts.”

    Yes, all the costs should be established, routes set, stations and their nature established, and a real finished cost, with complete responsibility on all deliverables, before the project is kicked off. I hate to say it, but I wonder about the issues surrounding Scarborough. Council is being asked to decide when there is no set subway route, how many stations let alone what type will be built, and how many trains will run, but decide first and then we can tell what it will cost. The extension should not have grown in mid stream, but should either have been a part of a completely separate project, with responsibility for the extension being entirely that of York Region, or made to wait until the initial project was complete. The first thing required is a detailed and complete scope, with contracts complete, soil conditions, station design, location and standards established before construction starts. Project vetted again for completeness (right down the design of the bathrooms and elevators) and then Council should be voting on this basis for every project, and should have the details then materially locked, any change requiring public discussion, and a major mea culpa (admission of fault) and reason for requirement.

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  33. Malcolm N said:

    I hate to say it, but I wonder about the issues surrounding Scarborough

    Joe M:

    Surely this debacle will be used as heavy ammunition from opposing politicians, the Toronto star, Metroland media, the “haves” in the City etc in their never ending fight to halt the Scarborough subway. And Scarborough will once again be at risk of being short changed from poor Political planning.

    This should set up nicely just in time for next election.

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  34. Joe M said:

    “Surely this debacle will be used as heavy ammunition from opposing politicians, the Toronto star, Metroland media, the “haves” in the City etc in their never ending fight to halt the Scarborough subway. And Scarborough will once again be at risk of being short changed from poor Political planning.

    This should set up nicely just in time for next election.”

    Yes, and the current Scarborough subway champ is playing right into it, by suggesting that it does not matter where it runs, and it needs another stop. The current ST muddyies the water further. I really think a full blown (ie $3.8 billion full loop blanket Scarborough) LRT system would be better, however, ST confuses the issue, as does the funding method. The biggest issue, however, is the sort of half baked BS about it (and other projects) are planned, and pushed to vote, before the actual plan is solid. It should be about getting a real plan, and real alternatives of comparable scope, voting on it, doing all the planning, getting a real cost, and then voting on that.

    If we could actually stop with the BS, political gamesmanship, provincial interference around etc, we could have funded, and had half built the full LRT loop in Scarborough by now. Of course with the current system, it seems impossible to get real planning done, or begin to complete anything, hence the lack of general credibility. It seems to me the real cost to getting transit built is the lack of planning, and political games that are being played in its place.

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  35. Giancarlo said:

    Cost overruns are one thing but incentives to do a job that you were paid for? Are these projects just too boring for you, contractors? Do you lack the motivation?

    The are a number of issues at play for contractors, the main two being outstanding claims and profitability. Just like TTC operators doing a work-to-rule strike, contractors have the ability to perform the absolute minimum without contract violation. This slows work. Slowing work can reduce cost overheads by removing overtime pay to workers and possibly reducing the workforce on site. Generally, contracts have penalty clauses to avoid this, but when the cost of working faster is more than the cost of paying penalties, they’ll take their lumps. Often, penalty clauses has a maximum cap to limit insurance costs. Thus incentives (and new penalties) are needed to get work to go faster than the current optimum price-speed balance point.

    The second issue is outstanding claims. A contractor is loath to finish a job with major (I’ve heard billions, but at least hundreds of millions) claims outstanding as they all look [at] leverage. By working slower, they buy more leverage to have claims resolved favourably. Basically, it’s a low-level form of extortion and it works.

    In a related note, IO seems to be playing hardball in return and any company that is party to any ongoing claims against IO projects will be disqualified from current proposals.

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  36. @bLuNt_wAcO:

    Statement 1: the inaccuracy is that legal costs are generally covered under insurance and claims/counterclaims will generally be settled out of court. The few cases that are settled by a judge, generally will include the winner’s legal costs as part of the ruling. The $400M over estimation includes an assumption as to how the adjudication will turn out.

    Statement 2: Byford was talking about the line opening, the stations will be completed much before this.

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  37. Malcolm N said:

    If we could actually stop with the BS, political gamesmanship, provincial interference around etc, we could have funded, and had half built the full LRT loop in Scarborough by now.

    Joe M:

    Not sure you’ll find enough support to for a half built LRT network in Scarborough. Or support for the Scarborough industrial park RT-LRT replacement over the Subway extension. And I completely understand why.

    But that LRT stubline along Sheppard which would connect ever so seamlessly to the wealthy lands which house the North York subway stubline is still on the table. So you never know.

    Steve: The whole argument about “wealthy lands” is getting tiresome. The way that the originally promised LRT network in Scarborough was cut, cut, cut away is a travesty and a direct result is that nobody trusts any plans announced by any government. I understand the premise that at least a subway is a single entity that is hard to chop away at, but there’s a limit to how much Toronto will be able to spend on it. With extra mileage east to Markham Road and extra stations, the premium for the subway could easily grow from the originally claimed “only $500 million” to close to $2b. That would require a doubling of the subway tax. It is not inconceivable that the subway project could never get off the ground, so to speak.

    The irony here is that SmartTrack would likely be the culprit because it will siphon riders off of the subway route, the very riders who were used, erroneously, to justify the subway option in the first place. Once again, Scarborough could wind up with less than it was promised.

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  38. Matthew Phillips writes:

    A low-level form of extortion

    I think that is why this is so frustrating and the TTC needs to flex some muscle. Despite my distaste for the enhanced private sector involvement in public works, I’d even be OK with profit-driven practices and the related price-speed balance on their end if they weren’t absolutely taking the TTC to the cleaners. Right now I wouldn’t trust these guys to fix my toaster.

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  39. When I read this article and analyze issues that occured, it makes me wonder what City Council were doing all this time? Ford Administration must have been briefed on the issues and skyrocket costs and late deadlines. You would think Mr. Ford subway would have done everything in his power to make this right and show how it’s all about Subways during his time as Mayor.

    I have such low expectations with Toronto transit and learned that unless we make transit a true number one option like police service and make transit available for all types of users of different needs, nothing will ever happen of real progress. I am incredibly pessimistic and accept as a taxpayer and active young voter that no matter what administration is there, there will always be more losses than wins.

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