Updated October 23: The TTC deferred the Lake Shore Express bus proposal until its November meeting so that it could be considered together with an overall report on express bus policies.
Finance
The Economics of Hybrid Buses
The City of Toronto’s Executive Committee agenda for October X contains a report on the City’s Green Fleet Plan for various agencies. By far the biggest of these is the TTC, and in an accompanying report, we learn just what the economics of the hybrid bus fleet are.
On page 15, the TTC presents a chart showing the fuel efficiency of its fleets, and it is worth noting that fuel consumption per vehicle km is rising at the same time as the average capacity of the vehicles is falling. This is partly due to the additional systems, notably air conditioning, that are present on newer vehicles.
Of the total fleet, just over a quarter (450 out of 1653) are hybrids, and these consume about 10 percent less fuel than their pure-diesel cousins (based on experience to date). This implies that the increased fuel consumption on the diesel fleet is even higher, proportionately, than the consolidated figures imply because of the offsetting benefit of the hybrids.
In the longer term, the relative fuel savings of hybrids may rise as they operate on routes with dense, stop-start traffic where the benefit of electric propulsion and battery energy storage will shine. Nonetheless, there will be a considerable net cost of owning hybrid buses relative to diesels over their lifespan.
The TTC expects to spend $110-million on diesel fuel in 2009. This includes a saving of $3.6-million for the existing hybrid fleet, and that saving will rise to somewhere around $6-million annually by the time that the fleet is about 50% hybrid (854 out of 1864) in 2011. That’s a per vehicle saving of about $7,000 per year. We do not know yet what savings, if any, on maintenance will accrue to the hybrid fleet.
The capital cost premium for a hybrid bus is about $200,000, and the hybrid saving is only about 3.5% per year on this additional investment. In time, if the capital cost premium comes down, the cost of fuel goes up, or the average percentage saving across the fleet rises, the numbers will converge and the rate of return will improve.
Meanwhile, it’s a shame we don’t have comparative figures for the cost of trolleybus infrastructure for our major routes. Two decades ago, the TTC sacrificed its trolleybus system on the twin altars of environmental responsibility and natural gas buses.
Postscript: The supposed economic advantage of natural gas as a fuel was almost entirely due to the fact that it was not taxed. A large chunk of the TTC’s annual fuel bill is in tax paid to the Province of Ontario. Without this tax, the economics of buses in general would be rather different. Oddly, because the dollar saving from reduced fuel consumption would actually be lower without the tax, the economics of hybrid buses would look even worse if this tax were rescinded.
Metrolinx: The Big Move (3) Investment Strategy
The Metrolinx Investment Strategy (Draft) is a really odd collection of documents, and as I look at the presentations, I can’t help feeling there is a mountain of background somewhere that Metrolinx would prefer to keep out of sight.
On the agenda of September’s Board Meeting, we find a glossy brochure that is clearly intended for the coming public review. For a “draft”, it has the look of something rather final to me. With a section titled “Your voice matters”, this is not intended for the Board’s consumption, but for the process that Metrolinx calls public consultation.
Worth noting are Rob MacIsaac’s own remarks at last Tuesday’s briefings. On at least two occasions, he said that there won’t be much pressure for change in the plans based on the extensive consultations to date. He is prejudging the outcome, and that’s no way to ask for public input.
The separate presentation to the Board is not available online, but I have reformatted it on my own site. (Note to the purists: most of this was scanned as text and then cleaned up to avoid problems with blurry copy-of-copy scanning.)
Draft Investment Strategy Presentation September 26, 2008
The heart of this “strategy” is to do next to nothing about proper transit funding for many years (at least one if not two election cycles), and to live off of the previously announced $11.6-billion MoveOntario money. A subset of the projects in the 15-year draft Regional Transportation Plan was selected to soak up this money, and if the Tooth Fairy is feeling generous, we might even get another $6-billion from Ottawa to stave off actually making a decision about transit funding for almost a decade.
Metrolinx: Too Many Fingers in the Pie (2)
The Metrolinx Board met on September 26, and I am pleased to report that Board members bit hard into a proposal to establish a complex process for project approval and procurement. (See “Project Management and Delivery” in this report.)
Chair Roger Anderson (Durham Region), already in a feisty mood over omissions in the Draft Regional Transportation Plan, led off by noting that a major policy decision was buried in an “Information Report”, the CEO’s monthly status update. He discovered this scheme when he read his meeting agenda at 1am, and clearly he was not amused. Even more clearly, this whole idea had not been discussed at all by the Board even in private session.
Anderson moved to defer the item to a future meeting, and this triggered concerns by Rob MacIsaac, chairing the meeting. Watching him in action, it’s obvious that he doesn’t like to lose votes, but as the debate went on, it was clear that Anderson was not alone, and MacIsaac wisely got out in front of his troops to lead them where they were already headed.
A common thread in remarks by Anderson, Mayor David Miller (Toronto) and Mayor Hazel McCallion (Mississauga), among others, was whether Metrolinx exists to work with the municipalities as a regional agency, or as a provincial overseer interfering with and dictating to local bodies. Anderson noted that municipalities have the staff to design, manage and deliver projects, and that they should not have to fight Metrolinx to get things done.
Michael Fenn, Metrolinx CEO and author of the report, replied that Queen’s Park, through the Ministry of Transportation, has a role in project evaluation. If so, I must ask whether Metrolinx is simply providing cover for MTO interference, and what role, exactly, is expected of a Board composed of leaders of the very municipalities that originate most of the transportation plans.
Metrolinx: Too Many Fingers In The Pie
With all the attention on the Draft Regional Plan, another proposal lurks unnoticed in the agenda for Friday’s Metrolinx Board Meeting.
The agenda itself gives no indication, and the report of interest is called “CEO Report”, an innocuous title. However, within that report we find a detailed description of the “Metrolinx Project Delivery Process” which the Board is asked to endorse.
First as a matter of process, substantive policy decisions should not be embedded in reports whose title implies a status update, unless the real desire is to hope that nobody will notice. Second, the proposed process shows that Queen’s Park has no intention of letting Metrolinx operate as a truly independent regional authority, but instead will hold it very tightly under control by various Ministries.
Many have spoken as if Metrolinx would someday become the overarching authority for GTA transit planning, construction and operations. Not true. Even the proposed amalgamation of GO Transit with Metrolinx is sitting as unproclaimed sections of the GTTA Act, and my guess is that GO will fight every step of the way against being taken over by an agency that has never run a single transit vehicle.
Is There an Optimal Supply and Demand for Transit?
On September 16, the Canadian Urban Transit Association (CUTA) released a study on the optimal supply and demand for transit in Canada. Although I may have slept through the local press coverage, I don’t think that there was much if any as other issues crowded out the story. One might ask why I’m bothering with it now, but I think this is worth talking about even though I don’t agree with the premise of the report.
Only the Executive Summary and Backgrounders are available on the CUTA website, and as a courtesy for copyright, I will not post the full version here. You will have to get it from CUTA if you really want it.
The principal conclusions as highlighted on the CUTA site are:
- The economically and socially optimal level of transit supply in 2006 would have required an estimated 1.7 billion vehicle-kilometres of transit service, or 74 percent more service than actually supplied.
- In 2006, capital investment of $78.1 billion would have been required to bring the supply of transit into line with the optimal conditions of supply in that year.
- Results of the analysis conclude that Canada is clearly underinvested in urban transit.
- Bringing transit to the optimal level of supply would produce several positive economic and social benefits – more than two thirds of these benefits constitute the economic value of reduced roadway congestion.
There is no question that higher investment in transit is required across Canada. However, there is a danger with any calculated “optimal” value that this will be taken as an upper bound. Moreover, the methodology of the study does not address future needs, only the situation that existed in 2006. It is based on average relationships between several economic variables taken on a national basis that almost certainly misstate the micro-level effects in urban areas. Continue reading
TTC 2009 Operating Budget
This week, the TTC presented a 2009 Operating Budget in a style departing from past practice. Instead of weeping and wailing about how they would love to run better service, but can’t afford it, the TTC now has a budget posture of “this is what we plan to run, now let’s find the money to do it”.
This is the sort of advocacy long missing from a “transit” agency.
The starting point for the budget assumes:
- Costs will rise due to inflationary and contract pressures, as well as operation of more service.
- Revenues will rise due to increased riding (with no allowance for a fare increase).
- The City of Toronto subsidy will remain unchanged (this is actually a decline taking inflation into account)
- The outstanding difference is to be funded through whatever revenue streams become available including a carry-over of any surplus from 2008 (at last report, a deficit, not a surplus was forecast).
Riding at current levels was last seen almost two decades ago in 1990, just before a recession triggered job losses, funding and service cutbacks. During the dark years, service improvements were hard to achieve because almost no changes could meet the high average cost recovery of the existing system. Policy shifts in this decade have moved the TTC to actively seek new riders even if this means that average will fall from its high of 85% back to a range in line with historic practice of the 80s and before. Continue reading
TTC Hosts Presentation on Montréal’s Smart Card Experience (Updated)
On the evening of Thursday, September 18, there was a presentation by Montréal’s AMT on the implementation of their Smart Card system.
See the announcement flyer for more details.
Updated: The presentations gave a lot of information about the Montréal OPUS project, and I will outline the high points here.
Joël Gauthier, President and CEO of the Agence métropolitaine de transport was the main speaker. He began by talking about the transit renaissance in Montréal. Ridership has grown consistently since 1995, and the introduction of new fare systems supports the growth and attractiveness of public transit in general. Capital programs are also underway to expand transit services including a new commuter rail line and an LRT line. System ridership in 2008 is up 8% over 2007.
The Montréal region contains 83 municipalities (plus an additional 8 within the AMT’s service territory) and 14 transit operators serving a population of 3.6 million. There are 2,550 buses, 5 commuter rail lines (52 stations) and 4 subway lines (68 stations).
An important thread in M. Gauthier’s talk was a focus on consumers. The transit system needs a good relationship with its customers through service quality and through offerings such as OPUS that simplify the travel experience. Smart Cards are part of an overall solution, not a cure-all. Indeed, the OPUS project includes the construction of twelve customer centres around the Montréal area that will provide general support for the public in addition to OPUS itself.
The old fare structure in Montréal was fragmented among the 14 separate agencies each with its own fares, media and discount structures. Riders would have to purchase single fares (tickets, tokens, passes) for each system they used, much as we see today in the GTA.
Fare rationalization was introduced in 1996, five years before the OPUS project even started, to simplify fares for riders. The metropolitan area is divided into 8 zones although most riders lie within a few of them. A pass covering multiple zones is 15-25% cheaper than the combined cost of passes in the old, local systems.
Riders within the downtown zone are split about 50-50 between single ticket and monthly pass users, while those who cross zones are split 90-10 in favour of passes because of the discount. The fares apply to all services including commuter rail.
Although revenue under the new scheme is lower, this is subsidized by funds from the provincial gas and vehicle license taxes. Note that this is an organizational and governance issue, not a technology issue. The desire to lower cross-zone fares is a noble goal, but it has a cost. Smart Cards allow for flexibility of implementation of new fare schemes and for more accurate tracking of usage on each system, but they don’t magically create new revenue. The expected savings from reduced fare fraud are seen as an offset to the system’s capital and operating costs, not as funding for fare rationalization which was already in place for a decade. Continue reading
TTC 2009-2013 Capital Program (Part 2)
In this section, we will see the complete mess that Toronto’s transit funding is in. Years of putting off a proper funding arrangement coupled with a naïve hope that Ottawa will fund 1/3 of capital projects leaves us with a huge menu of projects and expectations, but no money to pay for them.
As before, the material is the TTC’s presentation, reformatted to simplify it in this medium, with my comments appearing in italics.
TTC 2009-2013 Capital Program (Part 1)
The TTC presented its Capital Budget at last Wednesday’s Commission Meeting, and included a few surprises. Before I go into the details, a few general observations:
- Through judicious project deferals, the TTC has managed to keep its annual funding request down to a level within the City’s spending target, but this is getting harder and harder to sustain. There is only so much work we can push off into future years and it’s all starting to pile up.
- The budget assumes a considerable contribution from other levels of government who may not be predisposed to meeting the TTC’s request.
- The scale of the TTC’s budget is quite large and its impact on the need for Provincial funding is substantial over and above whatever might be done under the MoveOntario2020 program.
- Detailed costs for projects are shown over a five-year span, but many of these extend well beyond 2013.
In the material that follows, I have converted some of the presentation to plain text and left other parts as scanned images to keep the total size down. My own comments are interspersed with the TTC presentation and they are in italics.
Steve Munro 