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Private Sector, Maybe?

Noticeable by its absence from the grand transit funding announcement, MoveOntario, last Friday was any mention of public-private partnerships.  Making up for lost ground, Premier McGuinty was quoted in today’s Metro as saying:

There will be public ownership, and public control, and public accountability.  But in order for us to move aggressively, we will be using private sector partners — where that makes sense to do so.

Those who read this blog know that I am not a fan of PPP arrangements as they tend to overwhelmingly favour the private partner who would not undertake most risks associated with transit systems on their own.  PPPs are also notoriously difficult to manage as many in Great Britain have found.  Our own Highway 407 is a sterling example of a sweetheart deal with a private company who bought a public asset at fire-sale prices with a guarantee of constantly increasing returns whenever they decided to jack up the tolls.  A fine example of Tory stewardship of public assets.

There are various ways the private sector could be involved in MoveOntario.  Most obviously, they will do most of the design under contract to agencies like the TTC who maintain only a small inhouse engineering department, and they will do all of the construction.  Vehicles, too, will come from the private sector. 

The oft-heralded expertise of the private sector should be manifest in competitive pricing, and the ongoing series of contracts will quickly reveal those who bid low and produce shoddy, untrustworthy products.

Another area of private sector involvement lies in finance, although it’s odd to think of my pension fund (one of the large public sector employee funds) as the “private sector”.  Whether the return on “MoveOntario Bonds” will be adequate to attract investors from these funds remains to be seen.

Finally, the private sector is sometimes touted for design/build contracts with either a long term lease or operating agreement.  The argument is, in essence, that the private sector can manage the design and construction process better than the public sector and deliver a superior price/performance to us, the client.  Well, maybe.  If they skimp around the edges, this may not be visible for years after a line opens and our recourse may be limited.

I have no problem with the private sector bidding on design, construction and supply contracts for MoveOntario.  With any luck, they should make a decent profit and happily bid on more work.  However, the assets must stay in public hands.  We’re paying for them.

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The GTTA Lives On The Web!!

Astounding as it may seem, the Greater Toronto Transportation Authority has finally gone live with a website.

It’s a temporary site, and they promise great things to come.  I can’t help contrasting this with the way the TTC handled both the Transit City and My New Streetcar launches with sites up and running the day each announcement came out.

Possibly we are still suffering from the cutbacks of the Harris era and the load of stone tablets didn’t make it to the GTTA offices because they were stuck in traffic.  In any event, there is some preliminary mention of the MoveOntario funding announcement although, of course, no sense of project sequence or priority because the GTTA didn’t have anything to do with putting the announcement together.

Let’s hope that the GTTA finds its way soon.

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MoveOntario 2020 : General Comments

In the interest of breaking up the long thread on MoveOntario, I am setting up various subsections where comments can be left on related topics.  Comments left in the original thread, or in an inappropriate thread in the new scheme, will be moved to their proper place.  Yes, this makes for more work on my part, but you can help by leaving your comment in the correct stream.

This thread will be used for comments that don’t fit anywhere else or talk about the announcement in general.

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MoveOntario 2020 : GO Transit Section

With the growth in the comment string on the original post, it’s getting rather unwieldy.  Therefore, I am setting up new subsections to continue the threads on separate major topics.

This one is for GO Transit.  Any comments related to GO that are left on the other thread will be copied into this item.  In a few days, I will close off comments in the old thread on the assumption that everyone will have relocated to this one.

I have not yet decided whether to have a thread just for Swan Boats since Dalton didn’t announce any funding for them.

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MoveOntario 2020 [Updated]

The Ontario government is announcing a huge program of transit improvements and funding.  Details are available on the Premier’s website.

Note to those who come to this item after about 10:30 on June 15:  Many comments were posted earlier today before I had added my own review of the announcement.  They reflect the developing level of information (there are still some gaps) as well as some gentle urging that I get on with writing about this.

Whether it’s just an election promise or a real plan for transit improvements in southern Ontario, Queen’s Park’s announcement today raises the bar very high.  Not only will Ontario fund 2/3 of the cost of transit capital works, the sheer number of lines and services, including several nobody ever thought to see in print, sets this apart from all previous announcements.

There have been a few.  Continue reading →

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The Fiscal Realities of Ridership Growth

During the TTC board meeting on June 13, two of the fiscal conservatives on the Commission ran aground on the cost of running a successful transit system.

As I reported earlier, the TTC has an embarrassment of additional riding and will begin increasing service in September and through the fall to bring crowding within the Commission’s service standards.  More service, of course, costs more money and it is very unlikely that this will be made up from added revenues.  We are, after all, trying to give all current riders better service rather than forcing them to ride on the roof, and we are trying to attract new riders to the system within the constraints of the fleet size and available operating staff.

With Metropasses now a highly attractive fare medium, more people are buying them and more rides are taken on each pass.  This dilutes the revenue per ride as ticket, token and cash fare riders migrate to the cheaper, fixed-price pass.  Riding is going up, but revenue is not. 

Commissioners Michael Thompson and Peter Milczyn wondered openly about changing the fare structure to recover some of the additional cost including schemes such as zone fares or charging for transfers.  They should talk to their constituents in Scarborough and Etobicoke respectively.

Suburban riders take longer trips to get to work, and a transfer between routes is almost inevitable for most of them.  Downtown riders might organize themselves to stay within one route, either the subway or a streetcar line.  Charging for transfers or imposing a zone system penalizes those for whom the transit system is already less attactive — the long distance traveller — and is likely to disproportionately affect those who can least afford it.

My rationale for that statement is that long, tedious trips including transfers are likely to have a larger proportion of “captive” riders who cannot afford to trade up to an automobile as an alternative even though it would be very attractive in comfort and travel time. 

Do these Commissioners/Councillors really understand the impact of their proposals?

During the same debate, Commissioner Thompson spoke of a “crisis” facing the TTC, and indeed he planned to launch a “strategic planning” process for the system.  Yes, we need a strategic plan, but the real “crisis” is that everyone hopes that somehow the problem of transit funding will solve itself for both the capital and operating budgets.

There is no magic here.  If you want better transit, then you must spend more money.  This may come from fares or taxes or transfers from other governments, but it must come from somewhere. 

Anyone who talks about charging for transfers or imposing a zone fare system, but  never breathes the words “fare increase” is not being honest with the TTC’s riders.  The irony here is that the amount of money needed to operate better service is between $6- and $7-million on an annual basis.  This is less than one percent of the total operating budget and could be funded by a miniscule fare increase.

Any change to bring in zones or charge for transfers would be complex to implement, and unless the base fare were lowered substantially, would bring in far more revenue than is needed for the service improvements.

In another context, Toronto Council seems willing to increase the subsidy to passengers by about $13-million to operate the York University subway extension.  Why do we happily go forward with such schemes but nickel-and-dime plans for better bus and streetcar service?  The real reason, no doubt, is that York U won’t see its first passenger until at least two further terms of Council while better bus and streetcar service is something for today, for this year’s budget.

Support future spending for a dubious subway project and you are a visionary investing in the future of our city.

Support better transit for riders today and you are a wasting precious taxpayer dollars on riders who should be paying more for their service.

I look forward to seeing Commissioners Thompson and Milczyn with coffee-pot fareboxes on buses in Scarborough and streetcars in Long Branch defending the public purse from marauding, oversubsidized riders.  It will be a great photo op for their re-election literature.