A Monday morning confession: Try as I might, I simply have not been able to grasp the TTC’s intransigence towards Metrolinx’s allegedly treacherous proposal to outsource the construction, maintenance and operations of the three LRT lines.
The friction has been building ever since the spring, when council formally voted to give Metrolinx the go-ahead to build the LRT lines as originally conceived. But while the Metrolinx board last week tendered a $320 million tunneling contract for the 6.2 km western stretch of the Eglinton Crosstown, the two sides remain mired in an increasingly strident pissing match over the use of so-called “alternative financing and procurement” (AFP). And so the projects remain in a mystifying limbo
Metrolinx, according to The Star, informed the TTC last week it would be pursuing an AFP that would include not just the maintenance of the three LRT lines but also the operations. The reason: lower costs – hardly an unreasonable goal with such an monumental undertaking and an inflexible budget. The TTC, through chair Karen Stintz, professed shock and replied that if Metrolinx decides to outsource, it will blow off the city subsidy that offsets about a quarter of the operating costs.
I have lots of time for Stintz, but she’s bluffing on this one, and the province knows it. When it comes to provincial-municipal relations, Canada’s unwavering constitutional reality is that the City of Toronto should not try to role Queen’s Park except in the most exceptional circumstances, which this is not.
Stintz should have absorbed that lesson with the OneCity fight. But if she didn’t, she’s going to learn it with this one. Queen’s Park has time on its side, and can always put the whole show on pause if it is unable to negotiate a master agreement with the City of Toronto over an issue as politically anodyne as AFP financing, a.k.a. privatization-lite. Council in the end will cave, especially if it looks like Dalton McGuinty’s minority government will fall.
The Liberals, through Infrastructure Ontario, have done dozens of AFP deals, and the sky has never fallen. The arrangements are tamer than traditional Triple-Ps because the private partners face far less demanding financial performance expectations. In the case of the LRTs, for example, they’ll likely be paid a fee regardless of ridership, which means the winning consortium takes on less risk and therefore doesn’t need to cut corners or do back flips to meet its margins.
In a prickly and politically pointed report tabled at the Commission [PDF] back in late May, the TTC offered up a shopping list of criticisms about Metrolinx’s use of AFPs and its approach to building these projects. The document reads like the work of an institution chagrined at the realization that is no longer the only game in town.
Some of the objections – e.g., that Metrolinx may be inattentive to consultation or construction disruption – are laughable, considering the TTC’s own track record. Other concerns smell to me like pretext arguments. The LRT lines will be interoperable from a fare perspective: after all, by 2022, we’ll have a functioning open fare system and tokens will be just a bad memory. What’s more, the agencies’ officials will sync up other operational elements, like scheduling. Transit companies in European cities like Copenhagen — oft sited as the leader in progressive urbanism — use private contractors to operate lines, and it all works seamlessly as far as riders are concerned; they don’t care who runs the lines, as long as they run quickly, efficiently and safely. There’s no reason to think Toronto will be an exception; indeed, the public would rebel if Metrolinx and the TTC couldn’t resolve workaday logistical details or tried to double-toll users.
Then there’s the transit union, which opposes privatization and has threatened a work slow down in response to the city’s bid to contract out cleaning. I understand why the ATU takes its position, but that’s hardly a compelling reason for the TTC and the Commission to seek to block the deal with hollow threats.
In many ways, the Commission’s reaction – with Stintz channeling the views of the brass – reveals that the TTC, despite Andy Byford’s attempts to shake things up, remains a deeply conservative organization that is resistant to change or incursions on its turf.
I also feel we’ve watched an earlier version of this very show. The TTC had to be dragged kicking and screaming into the electronic fare card era, resisting even the most basic changes in the way passengers pay. Earlier this month, the agency trumpeted the fact that it was going to allow customers to use debit cards to buy their Metropasses in more stations, as if that move was evidence of progress.
Indeed, as far back as 2004, the province was trying to push the TTC to modernize its fare systems. And Toronto transit users are still waiting.
If we lived in a more rational period, the mayor of Toronto and the premier of Ontario would be wading into the fray at this point, doing the statesman thing and ordering their officials to negotiate a compromise for the mutual benefit of the city and the province. We don’t live in that moment, however, so Stintz is out there on her own, trying to fight a battle with Metrolinx that the city cannot win.
I’d say she should retract her threat and move on. The City and Metrolinx need to sign that master agreement before the sun sets on this Liberal government, a political shift that could well imperil these long-overdue transit improvements.
As the old saying goes, history repeats itself first as tragedy and then as farce.
photo by Raja Sambasivan
19 comments
Great article.
Great perspective John… there has to be a more collaborative approach to the region’s transti problems/solutions. “I’m all right Jack” can hardly be considered a policy..
John, I think you need to provide more details concerning the “privately-operated” lines in Copenhagen and elsewhere. Are those LRTs regional or municipal-level transit? Who is responsible for city transit vs regional transit in Copenhagen? Are these categories even applicable there? I think TTC is right to be concerned about what Metrolinx is proposing. It is one thing to contract out non-core (cleaning services). I’m not sure it makes sense to bring in a private operator to operate lines that are basically city-level transit when it is the TTC’s mandate to provide that service. I think Metrolinx is ignoring the coordination challenges this poses. And also ignoring that it will be more costly given that they don’t seem to be factoring in the “support services” that need to be in place to allow those routes to operate. It is one thing to spread out the costs of those support services across the routes for a whole city. But its another thing to incur those costs for just three routes. Then there is the whole question of “oversight”. You might recall that the province handed over responsibility for its air ambulance service to a private outfit, ORNGE, on the assumption that it would result in better value for the public. The result has been markedly LESS VALUE, reduction in service to the point where they may have put patients at risk AND (most worrisome) a markedly reduced ability/willingness by government to exercize appropriate oversight over how this service is being provided to the public.Bottom line, I don’t see how Metrolinx’s decision to have a private operator makes sense from an operational or fiscal perspective.PS.My comments apply to the operation of the line, the building of it.
Also, John, in the Copenhagen example, can you clarify WHO is making the decision to run the LRT lines as private? Is it the transit authority in the area? or the body overseeing the transit authority?
“Queen’s Park has time on its side, and can always put the whole show on pause” which as observers of the ever receding completion estimates for all the LRTs know is something QP isn’t shy about doing. Hamilton has been whinging that the Province wants them to pay part of their LRT – but that cash buys a seat at the table, when Toronto Council took the “too good to pass up!” deal they basically thought they were going to cash in all that extra property tax from intensification in the exact same way as if they had funded it themselves.
I think this can be flipped around, though – what reason is there for the province to privatize the operation of the new lines? Why not just have the TTC do it? It wouldn’t make any fiscal difference to the province, which doesn’t subsidize operating costs at all.
And it’s hard to imagine a private operator could operate 3 unconnected lines with any great efficiency.
As for the TTC objections, they know, for one thing, that if anything goes wrong on those lines the public will blame the TTC even if they’re not the actual operators.
Lorinc writes: “Metrolinx may be inattentive to consultation or construction disruption – are laughable, considering the TTC’s own track record.”
This remark is snarky and unfair. As a participant in a “lessons learned” session after the much-delayed Roncesvalles reconstruction, it became clear to me that much of the blame for those delays lay with a lowest-bid mandate from City Hall that forbids municipal staffers from writing contracts that could adequately hold private contractors accountable for delays and needless disruption. As for the TTC, its public workers were in fact the only one of four crews on Roncesvalles that actually got its work done pretty much on time.
When a public entity runs into unforeseen obstacles (inevitable with any complex project), it can reallocate resources and hire more people to get the job back on schedule, if it believes this to be in the public interest (perhaps after angry phone calls from residents). A private company, for obvious reasons, will not spend any extra money to speed up construction unless the contract requires it to. And such a contract is far more risky to the contractor and therefore more costly to the City (what private contractor would willingly assume extra risk without additional compensation?). And so, with our current lowest-bid mentality, such contracts do not exist, and local communities pay the price.
In short, under lowest-bid, construction disruption per se is not evidence of government incompetence; construction disruption is what happens when the system is working AS INTENDED, cutting costs before all other considerations.
A P3 may or may not be the right way to go with the Eglinton LRT, but it is amazing to hear Metrolinx selling further privatization as a cost-cutting solution to problems that cost-cutting privatization is already responsible for. If Metrolinx signs contracts whose main purpose is to cut costs and not improve the construction experience for affected communities, then those communities should expect MORE disruption under a private contractor, not less.
The real way forward here is to move beyond a lowest-bid mentality to a system that allows construction crews, whether they are private or public, the ability to respond to unforeseen but inevitable construction delays in a way that serves the public interest.
In Copenhagen, Movia operates all local buses and some local trains. Well, operates in as much as contracts out all services to private companies. There is full fare integration between busses, the S-Train (operated by DSB), and the Copenhagen Metro.
(Dylan Reid:)”it’s hard to imagine a private operator could operate 3 unconnected lines with any great efficiency.” It’s worth noting that a line with a fleet the size of the Eglinton line, which will use >100 LRVs would probably be as big or bigger than many of the LRT lines rolled out in smaller French cities where the entire fleet would be 30-50 LRVs. The Waterloo light rail will start with less than 20, which means Finch and Sheppard light rail would each be bigger than that.
The mere word “privatize” certainly does bring out the kooks.
When we talk about other cities who have some sort of private transit operation, it is important to discuss the model. Is service provided on a least possible cost basis? Are there any standards about frequency of service or crowding? What determines the amount the contractor is paid? Who is responsible for capital maintenance (which is substantially bigger an issue on rail systems than on buses that run on public highways)?
It is not enough to say “it works here” or “it didn’t work there” without the details.
My biggest concern is that none of these arrangements, even as a matter of philosophy, will be made public and we will be told to just trust Metrolinx. Then after the lines start running, we will find out that “oh you wanted seats? why didn’t you ask for them” is a multi-million-dollar add-on.
There is also the question of network expansion — both for planning purposes and for expansion of the scope of the operating contract.
Chiarelli’s comment about how the TTC couldn’t do anything on budget does not make sense in the context that much of Eglinton/Scarborough was to be a 3P for construction anyhow. Also, flat out, it’s a lie, and when I hear a politician lie to justify their acts, I get very, very, very suspicious.
You have not explored at all the potential for a future 407-like asset sale (and the implications for future transit costs) which is made so much more simple if there is no municipal participation and the line(s) can be offloaded as a going concern (maybe even to the then-current operator).
In a way, your position seems to be “why not” looking at things from the doctrinaire “AFP good”, “TTC not so good” point of view, than looking for Trojan horses or simple incompetence in setting up the contracts. I understand the need to debate the question, but your usual investigative fervour and suspicion seem oddly absent.
I do agree with your observation that the power vacuum at City Hall, and Stintz’ ineffective response to the announcement, mean that the sort of robust, detailed discussion we should have to protect interests on both sides simply will not take place.
When people refer to the Canada Line, they often comment on the conversion from the originally proposed bored tunnel to a less costly cut and cover technique. Generally this is viewed as a bad thing because of greater disruption during construction. However, in the end it ends up getting you a more convenient transit system because the platforms are close to the surface (compare 1960s B-D stations to the stations on the Sheppard line). A lot quicker to get from surface to platform and vice versa. Eglinton is on its way to being Sheppard style, notwithstanding talk about efficiency, because of the bored tunnels.
Likely a moot point, though. I believe the tunnel boring machines are already on order, which presumably means that ship has sailed.
Brent _
I agree about the depth issue. But one of the smart things about Eglinton is the “stacking” of the lines in the confined space under the street. It would have to have deep stations no matter if it was cut-and-cover or tunnel-bored.
Matt: When did Metrolinx decide to stack the tunnels? That’s a Vancouver trick, not Toronto’s.
@Brent: Yes, the boring machines are on order and will be delivered this fall.
@Matthew Blackett
The stacked tunnel isn’t happening. That was ruled out in the EA a long time ago.
@John Lorinc
As with Chiarelli, the vague slagging of the TTC’s record continues, and I assume you’re talking about St Clair. But as has been written in Steve Munro’s Torontoist article, not the entire construction fiasco is the fault of the TTC.
Given the presence of many stakeholders in along the right of way of a transit project, P3 advocates still haven’t explained how a private contractor can liaise better with these stakeholders than the TTC, an already public organisation in arms-length with some of these other departments. If the private firm is simply a substitute for the TTC, what’s to say that the TTC is inherently incompetent in this role?
Also, I agree with Stintz that it makes little sense to bring in yet another separate operator in Toronto when there already exists an agency with enough technical expertise to design and operate rail infrastructure.
Apologies — I meant the Canada Line! Its what I like about it.
Perhaps it’s because of my background, but I cannot help but remember the privatization of the operation of London Underground lines in the 1990s/early 2000s. That was also trumpeted as a way for the public to save money by contracting out to the private sector. The things went bang in 2007, with Metronet collapsing, to the joy of no-one but lawyers (barely 4 years into the contract). The cost of the whole sorry affair was GBP 410M. The result? Operation of those same Tube lines went back into public ownership, where they had been in the first place.
‘The Public Accounts Committee chairman Edward Leigh said most of the blame for Metronet’s collapse lay with the consortium itself, but he added that ” it is baffling – given how much taxpayer money was at stake – that the Department for Transport sat back and decided not to get involved in trying to sort out the Metronet mess.”‘
web.archive.org/web/20090615204123/http://www.contractjournal.com/Articles/2009/06/05/68403/metronet-failure-cost-taxpayer-upto-410m.html
Can anyone really tell me that isn’t going to happen here, except the money needed to extract the public from the contract isn’t going to make ORNGE look like losing some spare change down the back of the couch? Will the province, whose baby Metrolinx is, really not look the other way when/if their precious darling AFP provider starts charging cost over-runs to the province, with no penalty? Before we start talking about how a change in administration would change things, the PCs won’t want to talk down the private sector, and will be loath to undo agreements which will be very expensive to get out of. Unless the PCs are of a mind to pull off a sequel to 1995’s cancellation, in which case all bets are off.