Infrastructure Ontario October 2021 Update

Infrastructure Ontario (IO) has issued its project status update for fall 2021 together with an overview letter from their CEO, Michael Lindsay.

Little has changed in the transit projects, but IO and Metrolinx are shifting away from their original, much-ballyhooed model where public contract risk was minimized by a transfer to the private sector. Instead there is more talk about collaboration and mechanisms to make contracts more palatable to would-be bidders. It is no secret that a few years ago a major firm refused to bid on Metrolinx work on the proposed terms.

Building on the experience of the collaborative Alliance model in use for the Union Station Enhancement Project, IO’s partnership with Metrolinx to expand the GTHA’s network of public transit continues to advance and evolve. Last month, Metrolinx and IO launched the RFQ for the Scarborough Subway Extension – Stations, Rail, and Systems project, introducing a Progressive Design-Build approach. Like the Progressive P3 procurement strategy being introduced on hospital projects, the subway extension procurement includes the benefits of working with a partner on design work, addressing and avoiding considerable contract risk prior to signing a final contract to deliver the project. Following considerable discussion and consultation with industry, this complex, multi-billion-dollar project will be contracted as a targeted price versus the fixed price of our P3 models.

Like our contract packaging strategy for both Scarborough Subway Extension and Eglinton Crosstown West Extension, we expect to take a multi-package staged approach of delivering the Yonge North Subway Extension. That work would begin with an advance tunnels package that we expect to be procured using a classic DBF contract. Pending government approval, our hope is to have the RFQ for that procurement in market early next year.

Letter from Michael Lindsay, CEO of IO, October 14, 2021

The update contains projects from multiple ministries and agencies, and I have extracted the transit projects in the table linked below. This table shows the status of each project as it appears in the quarterly IO updates with the current changes highlighted in yellow.

Changes in this interation are:

  • The structure of the Scarborough Subway Extension has been changed from “TBD” to “Progressive Design Build” where first a partner is chosen with a Development Phase Agreement, and then a Project Agreement once design reaches the point of locking in the construction phase. Note that “Design Build” does not include operation and maintenance as the SSE will be part of the TTC’s subway system.
  • The Yonge North Subway Extension to Richmond Hill has slipped slightly for issuance of the Request for Qualifications and of the Request for Proposals, but this is offset by moving the contract award up from Fall to Summer 2023.

Several GO Transit projects are listed for award in 2021, but they have not yet been announced.

Beyond the works already in progress, no transit projects are up for award before Fall 2022. This means that if the Ford government is re-elected, they will have batch of ready-to-go announcements, but if not, there would be a last ditch chance to review some contracts either as to content (project details) or future operating principles (private vs public). Whether a Liberal or NDP government (or a coalition) would do this remains to be seen.

12 thoughts on “Infrastructure Ontario October 2021 Update

  1. Hmmm–Extending the Yonge subway to Richmond Hill: I really wonder if the Yonge subway will have the capacity to handle numbers from the north end unless a good and effective Ontario line is operating. Maybe the COVID-19 re-arrangements of rapid transit traffic will “save” them.

    Andrew Biemiller

    Steve: Once upon a time, Metrolinx did projections for the Relief Line North to Sheppard and it had a profound effect on demand on Line 1. However, the other option which they seem loathe to pursue is improvement of service on Richmond Hill’s GO corridor. This will require making fares competitive with the TTC. This will only be able to divert trips bound for the core as intermediate transfer stations are really not practical. Oriole/Leslie to line 4 to Line 1 (a) adds two transfers and (b) puts riders right back on Line 1 where we don’t want them. Further south the physical separation is too great at Eglinton or Bloor. [Note to others who might want to fight me on this, take a good hard look at the vertical and horizontal separation, and then tell me how an attractive transfer is possible.]

    Dealing with demand from north of Toronto is not simple, and any “solution” that depends on a single line will probably fail because it will not address the variety of origins and destinations involved.

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  2. Steve, what are your opinions on the chances of Ford losing the upcoming election? If he does, haven’t the Liberals and NDP already committee to moving forward these 4 projects (OL/EGLRTW/YNSE/SSE). Regardless of the election in June we are bound to get these projects in the same or similar form especially if tunnel boring has started on EGWLRT/SEE and early works on the OL? Would you agree with that statement?

    Steve: I am modestly hopeful Ford will lose, and that people will remember the number of issues he has screwed up, some dating well before covid. As for the Libs and the NDP, they can always appeal to changing circumstances as a reason to at least delay while they examine alternatives. Yes, the strategy at Metrolinx has clearly been to move the big projects far enough down the field that they will not be abandoned. Oddly enough the one that does not have that protection is GO expansion and electrification.

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  3. Left unsaid in the letter is that the usual construction firms were so disgusted by Metrolinx’s behaviour regarding the Crosstown construction that they’ve lost all trust in Metrolinx and refuse to bid on such P3 projects.

    I suppose it’s for the best. Seeing the Ottawa Confederation Line P3 crash and burn spectacularly doesn’t bode well for the future of the P3 model: regular multi-week shutdowns of the whole system due to safety failures and a lack of resilience and redundancy built into the system. Presumably, corners were cut in order to save costs, but I don’t know who’s going to pay now to uncut those corners. I’m a little worried that the same thing will happen with the Crosstown.

    Steve: I have seen some of the same documents as Ben Spurr and they do not paint a happy picture. For some time, IO’s status reports have shown the GO projects with vendor selection in Fall 2021. There has been no word on this, and I fear that the whole GO expansion and electrification program may be endangered especially if the financing has to come substantially up front from a cash-strapped government.

    The whole purpose of P3s was an accounting trick to make the debt disappear until a line opened so that they could build billions of dollars worth of projects without actually going into hock, on paper, for them for a decade or so.

    If this were a private company selling shares, the word would be “fraud”.

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  4. I believe that it is planned to avoid using the P3 system on the (finally) fully approved Hamilton LRT project, that is, to split it up into smaller, separate contracts for better oversight and control. Compared to the Crosstown project, Hamilton’s will be comparatively simple. The major civil works will be the car house/shop; two bridges, one of them LRT-only, over Highway 403; and a LRT-only short underpass beneath a railway spur line in the east end. The line will be surface running in the centre of city streets..

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  5. Steve opined: “If this were a private company selling shares, the word would be ‘fraud’.”

    And pardon me, perhaps a typo – should it be ‘Frod’? For instance, any somewhat neutral/open BCA for that Suspect Subway Extension, including at least two other options?

    Steve: The entire purpose of “analysis” these days is not to review options, but to draw the map first based on political judgements, and then write reports to “justify” the decision. There’s big money in that sort of work, on a par with the world’s oldest profession.

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  6. Yes, I’ve noted the same number of letters in each word. Me, I’m an ‘insultant’, in fields of climate, biking and transit. Highly paid, off course, but it’s only end of world sorta times eh?

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  7. P3s aren’t necessarily about hiding debt. I think a lot of really smart MBAs and economics PhDs thought they could solve the problem of over-budget construction projects by using overly complicated financial wizardry. Of course, the lesson from the Housing Crisis is that financial wizardry is dumb. Using huge frameworks of financial mumbo jumbo as a replacement for good management is a bad idea. In hindsight, it’s unclear why we thought that we were so clever that we could solve hard problems through whizzbang business engineering fairy dust instead of through hard work.

    I now realize that the TTC might be doing the same thing thing in designing overly complicated contracts in its electric bus purchases. Dear TTC, you *cannot* remove risk through financial wizardry!

    Steve: The only thing that overly complicated contracts guarantee is that the cost will go up. I suspect management are desperate to prevent a situation where a few years from now we have 300 eBuses sitting in the garage while everyone claims it’s somebody else’s fault that they don’t work.

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  8. I was looking at some of your old articles and your criticism of Metrolinx was much more scathing under Kathleen Wynne than it is under Douglas Ford. You stated that under Kathleen Wynne, the sole job of Metrolinx was to make the government look good. So, as much as you hate Metrolinx, they are a much improved agency under Douglas Ford than they were under Kathleen Wynne going by your own archives. And Douglas Ford has built more transit in 3 years than McGuinty-Wynne did in 15 years. I don’t agree with Ford on most issues but you cannot deny that Ford has been very good for transit.

    Steve: Under Wynne, I had hopes that Metrolinx could be a better agency, and was bitterly disappointed when they were not, and by extension disappointed in Wynne who I respected. For the record, I have no reason to expect that Horwath will do any better if she becomes Premier.

    Under Ford, Metrolinx has evolved further into an arrogant bunch of hacks whose primary job continues to be making the government look good, but thanks to Ford’s legislative changes, at the expense of worthwhile public input into their work. Ford gives the impression of being good for transit, but only by spending billions on, in cases, projects that simply cannot be justified but will buy him votes. Toronto Council, happy to get transit spending on anything, goes along with his schemes, and in turn the Feds simply say “we’re funding what the city wants”.

    Metrolinx could have been so much more, so much better.

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  9. It’s not just ‘at the expense of worthwhile public input’ – there are multi-billion$$$$ that are at risk of being relatively wasted, which are needed for all sorts of other good things, not just smarter transit. And other readers may know of situations where smarter governments made changes to carterials and excessways for public transit within existing roads. But having good at-grade transit is anathema to the many ‘carservatives’ in power. Even a compromise of seeing what other linear corridors are possible for a network resiliency, including faster sub-regional transit (which again requires political will to force two silos to provide not-milk-run transit), and we might have to retrieve old plans and reset, and gasp! change minds! (And I’m glad Steve is equally unoptimistic of the other major parties, and other levels, sigh, and what’s a few billion???)

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  10. I still think Leslie/Oriole could be a useful transfer point on a frequent, reasonably priced/free transfer Richmond Hill express line insofar as it would encourage riders on the Sheppard line heading downtown to transfer *there* instead of at Yonge St, relieving line 1 of potentially thousands of riders in the peak hours.

    Steve: Metrolinx keeps talking about improving the Oriole transfer point, but unless trains run frequently, the added travel time imposed by waiting for a GO train will offset a lot of the benefit of avoiding the Yonge line. Fare integration with a TTC-level fare is an issue on this line and on the Stouffville corridor which could pick up riders who are now using Line 2 BD to reach Yonge Street.

    We hear a lot about “relief”, and billions will be spent to provide it. Meanwhile, the relief possible through a TTC-level fare on GO is seen as an operating expense and therefore a bad thing for Metrolinx, not to mention that it would drive up demand that is intended to serve 905ers who are seen as their natural market.

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  11. The large construction jobs are bid on by a consortium of construction companies brought together for the specific contract. After the construction is complete they then have a long term management contract that has nothing to do with construction. Experience with 407 is that the project is quickly sold off to another company, probably a company more interested in making a buck rather than maintaining a system. Is this the problem that Ottawa is having? Maybe Washington also. The pattern appears to be ‘ignore a problem until it becomes so large it has to be fixed with big bucks’. Toronto may be headed that way also by assigning a maintenance contract rather than maintaining a maintenance expertise in-house (i.e. an upgrade to Harvey shops).

    Steve: This is also not helped by TTC’s clear moves to push more of their maintenance work to third parties. We risk losing the expertise and ability to take direct responsibility for this key aspect of transit operations.

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  12. There’s a fresh study out (though paywalled it seems), that indicates there’s a real pattern and problem of over-estimating/selling benefits of a large project and under-estimating costs, not that we let facts matter anyways, right, and what’s a few billion?

    Did we ever see the alleged cost-benefit for the Suspect Subway Extension? (Scarborough, not Richmond Hill)

    Steve: The single biggest problem with “benefit/cost analysis as it is practiced hereabouts is that the “benefits” are all future, soft dollars accruing mainly to riders on the premise that their faster trips have “saved” them money. That is neither money they can put in their pocket, nor money that comes back to governments as revenue. Meanwhile, the investment in excessive infrastructure and operating costs diverts funds that could have been spent on other improvements with their own benefits. This foregone benefit is not counted as a “cost” in the equation. The whole process is a complete sham, but it keeps the consultants busy, and makes pols of a conservative bent think there is something scientific in all of this pork.

    As for the SSE, yes, Metrolinx did publish a so-called “Preliminary Design Business Case” in February 2020. It is an utter sham because it considers only two options:

    • Building the subway to McCowan and Sheppard, or
    • “Business as usual” defined as the bus network that would replace a failed and retires SRT

    This is a straw comparison because there is no alternatives analysis of options such as the original LRT or of retrofitting and extending the SRT with a new fleet. The assumption is that those were rejected in the earlier embrace of the subway option.

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