Tracking Metrolinx Project Costs

The Province of Ontario is not exactly transparent when it comes to reconciliation of announced project costs and actual spending, let along the changes that might occur along the way. A project, or group of projects, might be announced with a value in then-current dollars, and without necessarily including all future contract costs. There are various reasons behind this approach including:

  • The government does not want to tip its hand on the amount of money “on the table” to prospective bidders who might tailor their bid to the perceived level of funding.
  • Some contracts include future operating and maintenance costs as well as capital costs. In some case the announced cost does not include the O&M component, only the estimated capital portion.
  • Provincial projects are typically quoted in then-current dollars with future inflation to be added as it occurs, at least to the point where there is a contract in place which includes that provision.

This approach hides the likely as-spent costs and makes provincially run projects appear cheaper, at least in the short run.

This is fundamentally different from the way the City of Toronto tracks projects and how TTC requirements are reported. Specifically:

  • City project cost estimates include inflation to completion because this is factored into future funding requirements.
  • City projects do not bundle future operating costs with capital, but report them separately.

Note that cost estimates shown in the Infrastructure Ontario market reports do not necessarily match values shown by Metrolinx because IO shows these values on a different basis. Future operating and financing costs are no longer included in IO estimates so that a project’s value reflects only design and construction costs, a value that gives potential construction bidders a general size of the project’s scope.

Infrastructure Ontario notes on the November 2022 Market Update that we have modified the methodology used to calculate the estimated costs as presented on the chart. In May 2022, and for Market Updates prior to that, we used the Estimated Total Capital Costs. For the latest update, and going forward, the costs listed only include Design and Construction costs.

These changes were adopted after feedback from our construction industry partners found that including only design and construction costs provided them with a better sense of the scope of the project and would assist in determining if they wished to participate in the bidding process.

Email from Ian McConachie, Infrastructure Ontario, Manager, Media Relations & Communications, November 24, 2022.

This can be confusing with “bundled” projects such as the Ontario Line RSSOM contract which includes both provision/construction of vehicles and infrastructure, as well as future O&M costs. This is probably the reason, or a good chunk of it, for the very large increase in the RSSOM contract value between the initial estimate cited by IO and the contract award. However, the way these contracts are handled generally makes it impossible to know how much of the change is simply due to inflation in materials and labour costs, and how much is due to underestimates or scope changes.

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Plans by Murray and Tory: Steve Visits Goldhawk

On June 2, 2014, I appeared on Dale Goldhawk’s radio show talking about both the Murray High Speed Rail plan and the Tory “SmartTrack” scheme. A podcast of the show is available on Goldhawk’s site (running time about 34 minutes).

Even with half an hour, we couldn’t talk about everything including those pesky details that make superficially attractive projects run aground.


[Photo by Zoomer Radio]

Neptis Reviews Metrolinx: A Critique (II)

This article is the second section of my critique of the December 2013 review of the Metrolinx Big Move Plan written by Michael Schabas for the Neptis Foundation. It should be read in conjunction with Part I and following sections.

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Metrolinx Board Meeting of June 27, 2013

The Metrolinx Board met on June 27 with a full agenda.

There is a great deal of duplication between various reports, and I have consolidated information to keep like items together.  Some reports are omitted entirely from this article either because the important info is included elsewhere, or because they simply rehash status updates with no real news.  Metrolinx has a love for “good news” to the point that each manager stuffs their presentations with information that is already well known, or which parallels other presentations.

Among the more important items in these reports are the following:

  • Metrolinx is now conducting various studies all of which bear on the problem of north-south capacity into downtown Toronto.  This involves the (Downtown) Relief Line, the north-south GO corridors and the Richmond Hill subway expansion.  A related study involves fare and service integration across the GTHA.  It is refreshing to see Metrolinx taking a network approach to planning, rather than looking at projects in isolation, and recognizing that some of their own, existing routes can be part of an overall approach to solving this capacity problem.
  • The Metrolinx Five-Year Strategy includes dates for the beginning of service on various projects including the LRT replacement for the Scarborough RT.  Previous versions of these dates cited “by 2020”, and Metrolinx has indicated a desire for as short a construction/shutdown period of under three years.  However, the new strategy paper talks of an “in service date” of 2020.  Metrolinx is aiming for a three year shutdown at most, but the SRT might continue operating beyond the originally planned September 2015 date, possibly for one additional year.  This could lead to an earlier reopening than 2020.  (Correspondence from Metrolinx on this issue is included later in the article.)

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Metrolinx Reveals Preferred Revenue Tools, But Says Little About Investment

On April 2, 2013, Metrolinx released a list of the preferred “revenue tools” in its forthcoming “Investment Strategy”.

Public consultation until today featured a longer list, and several of the options fell off of the table thanks to public and political feedback.  The complete list and a detailed analysis of each option can be found in a 225-page report “Big Move Implementation Economics Revenue Tool Profiles” produced by AECOM and KPMG in March 2013.

At a press conference, Metrolinx CEO Bruce McCuaig emphasized that the duty of his organization is to make recommendations, to offer advice, but that the final choice on tools and the amount of revenue to be sought will be up to the politicians at Queen’s Park.  This neatly shifts the focus of detailed questions, but avoids the question of just how much detail will be included in those recommendations.

A handout we are sure to see during the next round of consultations outlines the general philosophy and gives details of what might be achieved with each short-listed tool.

InvToolsShortlistP1c InvToolsShortlistP2c

The most important statement here is that

An Investment Strategy is about more than just raising revenues for transportation; it’s about implementing mechanisms that grow a more livable, prosperous and sustainable region.

To this I would add that a “strategy” also includes important components such as the staging of projects and discussions about the speed (or lack thereof) with which the full Big Move network is implemented.  Today and in the past weeks leading up to the announcement, we have heard a lot about new revenues, but little about how they should be “invested”.

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Metrolinx Updates The Big Move, Announces Priorities for Phase 2 Projects (Updated)

Updated December 6, 2012 at 11:20 am:

A warmed over version of the Board of Trade presentation was given to the Metrolinx Board by President & CEO Bruce McCuaig at the Board meeting on December 5.  There were a few clarifications of note:

  • The list of “Next Wave” projects will not be nailed down until the February 2013 Board meeting following a round of public consultation.
  • That consultation will also include a review of the proposed amendments to The Big Move and yet another round of talks about potential revenue tools.  The meetings will probably take place in January at 12 public round tables, as well as a 36-member “Residents’ Reference Panel” doing “deep dives” into the issues at weekend sessions.  This process will report back to the Board in spring 2013.  (There is no info about how the 36 “residents” will be selected for the panel.)
  • It is likely that construction of the Downtown Relief and Yonge Extension subway projects would take place concurrently with Yonge to Steeles opening at roughly the same time as the DRL from Downtown to Danforth.  “Phase 2” of each project would follow.  At this time there is no commitment to going north of Danforth or to any specific route either through downtown or through the east end of Toronto.  This will be the subject of an Environmental Assessment for the project.
  • The goal of TBM was described by McCuaig as having 75% of GTAH residents within 2km of rapid transit at their origin or destination.  That “or” is an important distinction I don’t remember hearing before.  It’s child’s play to have lots of people close to rapid transit at one end of their trip — anyone who works in major centres within Toronto or lives along a subway, LRT, BRT or GO line will qualify.  The more difficult target is to have such access at both ends of the trip because “convenience” is meaningless if only one end is well-served.
  • In an apparent contradiction to the implied 1/3 local funding described in the Star’s article about Mississauga having second thoughts on the LRT project, McCuaig said that we cannot look at traditional federal/provincial/municipal financing models.  Presumably the Investment Strategy will address this problem.

The actual timing of the Next Wave projects varies depending on which document one reads or how one parses the announcements.

  • In the Next Wave handout (linked later in this article), this is described as a 15-year, $34-billion project.
  • The spend rate implied by another part of the same handout is only $1.2b/year, and this translates to a 28+ year timeframe.
  • Metrolinx, in an email responding to this article and my concerns about the status of projects such as the Eglinton LRT to the Airport, said that there would be a “Third Wave” in 2025.
  • At the press briefing following the Board meeting, McCuaig confirmed that for the “15 year plan”, year zero has been reset to 2012.  This implies that TBM’s original 15 year timeframe is now stretched to roughly 20.  Moreover, McCuaig hinted that projects started within the next 15 years may not finish by then.
  • Despite all of the delays, the year 2031 is still the target for completing all of The Big Move.

In previous discussions of the Investment Strategy, Metrolinx has included an allowance for operating the new facilities as they come into service.  This is missing from the $34b of the Next Wave, but will have to be incorporated into the IS discussions.  Moreover operating costs are ongoing while capital are one-time.

In all of this discussion it was amusing to listen to Metrolinx talk about revenue tools, code for the very things some politicians in Toronto find utterly unacceptable preferring to imagine that pools of private capital are available at little or no cost.

The presentation materials from the Board meeting are not yet online, but the hard copy version comes under the unhappy title of “The Big Move In Action”.  Deleting only one space would give a good description of the treatment of project schedules for Transit City by Queen’s Park.  The presentation ends with a page titled “Keep the wheels moving” and a picture of a stone wheel and hammer.  Ontario makes a lot of claims for its triumphs in transportation technology, and I can’t help wondering if this is an early product of the Ontario Transportation Development Corporation.

I mention this because Metrolinx appears to have embraced a new, quaint graphic style for their Big Move and Union Pearson Express websites.

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Not Quite Greased Lightning: GO Transit to Electrify, Eventually

Today, Metrolinx released its long-awaited study of GO Transit electrification.  I will comment on this in more detail over the next day or so, but here are preliminary observations while the news is fresh.

Updated 4:30 pm: The study appendices are now available online.  I have not incorporated any information from them in the article below.

The study finds that electrification is a worthwhile venture on selected, well-used corridors, and that it is an important foundation for the growth of GO Transit into its regional role proposed in Metrolinx’ Big Move.

The proposed staging of the electrification project (all times are estimates) is:

  • Preliminary design and Environmental Assessments (3-4 yrs)
  • Union to Pearson Airport, and Union to Mimico (Willowbrook Shops) (4-5 years)
  • Pearson Airport spur to Brampton (Mt. Pleasant) (2 years)
  • Union to Oshawa (including access to a new eastern maintenance shops) (4 years)
  • Mimico to Oakville (2 years)
  • Oakville to Hamilton (James Street Station) (2 years)
  • Oshawa to Bowmanville (2 years)
  • Brampton to Kitchener (2-3 years)

Other corridors were studied, but the best benefit-cost ratio was found to be the combination of Georgetown and Lake Shore.  Events over the next decades may prove this to be short-sighted, but that’s today’s plan.

The implementation is rather leisurely, and if all of its phases take place sequentially, it will be the early 2030s before this scheme is completed.  The Environmental Assessments will use the expedited process most recently seen on the Transit City projects.  This will avoid the need for “alternatives analysis” on projects where the alignment and technology selections are a foregone conclusion, and the “terms of reference” will be much simpler than a full EA.

No individual benefit is cited for electrification, but rather the combined effect of contributions to travel time savings, operating costs, reliability, environmental concerns and long-term capacity of the GO system.

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LRT For Hamilton, Maybe

The Metrolinx Board Meeting agenda for February 19 includes the Draft Benefits Case Analysis for Hamilton’s King-Main LRT corridor.

The route would link McMaster University with Eastgate Square, and the alignment would be the same for either an LRT or a BRT implementation.

East Section – turning from a segregated terminus adjacent to Eastgate Square the alignment travels westward in a median transitway via Queenston Road to the Main Street / Ottawa Street Intersection.

Downtown Section – the alignment continues westward from the Main Street/Ottawa Street Intersection along a median of King Street East across John Street and James Street through downtown. The alignment continues along King Street West across Highway 403 to Longwood Road South where it provides convenient access to Westdale Village and the McMaster Community. At Longwood Road South the alignment runs southbound to Main Street.

West Section – From Longwood Road South the alignment transitions into the centre of Main Street and continues westward towards the McMaster University Medical Centre before turning north towards the terminus station on the McMaster University campus. (Page 24)

The BCA examines three options: 

  1. all BRT,
  2. all LRT, or
  3. a staged implementation of LRT on the heavier western part of the route connecting at King and Ottawa to BRT for the remainder.  The LRT would be extended to Eastgate Square at a future date.

Common to all designs would be the reintroduction of two-way traffic on what is now the one-way pair of King and Main Streets in downtown Hamilton.

The BCA considers but rejects the option of diverting the route south to link with Hunter Street Station, now the site of GO Transit’s Hamilton rail service.  A GO connection will be important, but to which station?  The recently announced extension of service to Niagara Falls will return train service to the old James Street Station on the north side of downtown.  Indeed, more trains may run through James Street than to Hunter Street.  The rapid transit line cannot connect with both of them.

GO Transit unveiled a plan last night in which it aims to extend all-day train service — that now goes to Aldershot — to a proposed station on the CN line at James Street North. That would involve 10 trains each way between the proposed new Hamilton station and Union Station in Toronto. Niagara would see four trains each way between Union Station and Niagara Falls. Hamilton would keep its eight trains — four each way — that now run between Union Station and the former Toronto, Hamilton & Buffalo Railway station on Hunter Street.

Source: Canadian Pacific Daily News Scan from the Hamilton Spectator and the Niagara Falls Review, January 27, 2010

After a great deal of number crunching (which I will leave to my readers’ copious spare time), the report concludes:

Overall, the results indicate that an investment in LRT in Hamilton will generate significant benefits and support the City’s broader objectives to revitalize, redevelop and reshape its most significant east-west corridor. While the lowest cost option, Option 1, produces the highest benefit-cost ratio of 1.4, both LRT options generated benefit-cost ratios that are greater than 1.0. The highest cost option, Option 2, also produced the greatest benefits in all accounts, all of which make an important contribution towards achieving the objectives and goals of both the City and the Province.  (Page 51)

This is a straightforward, unambiguous conclusion.  However, there is a covering report on the Metrolinx agenda, and it is not quite so clear in supporting LRT.

Although full LRT is the highest-cost option, it also generates the highest transportation user benefits in terms of travel time savings, ridership attraction and overall “qualitative” travel experience. LRT also carries a stronger potential to reduce greenhouse gas emissions and generate more significant economic development impacts such as employment, income and Gross Domestic Product (GDP) growth for the city and region. The BCA also identifies LRT as having greater potential to shape land uses and uplift land values along the King-Main corridor.

BRT is considerably less expensive to build and thus generates a strong benefits-cost ratio. At the same time, however, BRT delivers less total benefits and its secondary benefits are less extensive.

On the other hand, the significantly higher investment required for the full LRT option will require careful attention to the partial LRT option to increase affordability – and even to the BRT option if sufficient funding is unavailable for either LRT option. (Page 2, italics added)

This is an astounding statement.  “Sufficient funding unavailable”?  Whatever happened to the brave new world of The Big Move where transit investments would flow like water from Queen’s Park?  Are we suddenly feeling poor, and cutting back on transit options?  This rapid transit line is the second in the “top 15” priority list.

If the BCA had shown LRT to be a poor choice, one might understand taking the least cost option, but that is not the case here.

Metrolinx has some explaining to do, especially in regard to the many other top priority projects in its hopper.  Maybe transit isn’t quite as important as Dalton McGuinty claimed it was back on that sunny day in June 2007 when he announced MoveOntario 2020.