Tuesday night, Montreal’s city council voted on whether to financially back Bixi to the tune of $108 million. The Public Bike Service Co. (société de vélo libre service) a non-profit that manages Bixi, threatened to take the bikes off the street on Thursday May 20th and resign if the city did not intervene. The directors of the non-profit organization could have become personally liable some costs.
The “bailout” consists of a $37-million loan to cover Bixi deficit, incurred during the first 2 years of service, which includes the concept, design, patent, and manufacture of the bikes and stations. They will have 12 years to repay this loan with 2% interest. According to the Bixi webswite, their business plan predicted that operating costs could be covered once they reach 50,000 members and through sponsorship. They currently have 40,000 members.
Furthermore, $71 million would guarantee loans required to export BIXI internationally. The Public Bike Service must put forward money to manufacture of the bikes for export before receiving the full payments.
The vote divided along party lines with Tremblay’s Union Montréal in favour of the bailout (35 votes) and the two opposition parties against (25 votes).
Union Montréal underlined that BIXI is iconic success of Montreal, and that the system leads to the creation of 450 jobs (50 to run the program in Montreal and 400 tied to the design and manufacture).
“(BIXI is) the jewel of Montreal, of Quebec, known internationally now,” said executive committee chair, Michael Applebaum (quoted in The Gazette). “And because of its success, it needs more financing…under our administration, we will ensure that Bixi will continue to be a success story, for Montreal and internationally.”
Vision Montréal argued that the city’s coffers aren’t a bank and that the Public Bike Service should have gone elsewhere to finance it’s essor.
“La Ville n’a pas à se transformer en banquier. Pour l’exportation, il y a des organismes comme la Banque de développement du Canada, le ministère du Développement économique ou Investissement Québec. Ce n’est pas aux contribuables montréalais de payer ça,” Louise Harel was quoted as saying in Rue Frontenac.
Projet Montréal, conversely, believes that the city should finance BIXI as a public service rather than leaving the management an arm’s length, non-profit organization.
“Qu’on fasse de #BIXI et la SVLS un véritable service municipal public & transparent et que cesse le mirage de sa profitabilité,” tweeted Projet Montréal leader, Richard Bergeron last night. “Le problème réside dans la transparence que n’ont pas ces OBNL créées par le maire,” he added.
The Auditor General is supposed to release a report on the organization next month. Both opposition parties deplored that the issue went to vote before the complete information was available. In the meantime, Bixi’s website attempts to clear up the facts (or their version of them) here.
What does the Spacing Montreal think… Would Bixi have survived the week intact under our guard? Feel free to justify your vote in the comments section below if you so desire. Survey’s open until Saturday May 21st.
THE POLL IS NOW CLOSED: Results here.