Archive for the ‘privatisation’ Category
The Tyee opinion piece is based in a report that went to the government just before Christmas. This blog has long been a critic, not just of P3s in principle, but also the way that Partnerships BC is supposed to work.
“There is a concern that Partnerships B.C. is potentially biased towards certain procurement methodologies because it is mandated to be both a self-sustaining organization and an advisor to government. This creates the perception that Partnerships B.C.’s advice may be biased towards revenue generating opportunities for the organization.”
You can read the press release which carries its own naturally laudatory title “Crown review finds Partnerships BC fulfilling its mandate” or the Partnerships BC Crown Review Report:
and the Steering Committee Recommendations Letter:
But actually I think just reading the Tyee is more likely to steer you right: for instance
While the report specifically says it did not examine the methodology that justifies the use of P3s, some of its findings touch on this methodology. For example, Partnerships B.C. says it bases its decision on whether or not to use a P3 by comparing the cost of a P3 with a public sector comparator. However, PBC frequently uses what it considers to be the most expensive possible method of public procurement (Design/Bid/Build), ignoring less expensive methods of public procurement such as Design/Build, which even the Canadian Council for Public-Private Partnerships (C2P3) considers public procurement.
In a final irony, the report itself may be a conflict of interest. Partnerships B.C. is a private company owned by the Ministry of Finance, thus the Ministry of Finance is reviewing its own agency which raises its own conflict of interest issues.
There’s a very entertaining piece on the Port Mann Bridge by Neil Salmond on Strong Towns. It is all about what people do when faced with a choice between a fast, tolled route and a slower, untolled route. Or rather, what they say they will do. Apparently in Ohio drivers said they would drive out of their way to avoid a toll. Which, of course, is exactly what they are doing here: driving over the Patullo instead of the Port Mann. Even though the extra cost in gas alone is often going to be about the same as the toll, as demonstrated by a neat little gizmo put together by Todd Littman and the Sun. There’s also the fact that traffic forecasts in general seem to have made a fundamental error by simply extrapolating from the past. Just like steering a ship by staring at the wake, this method has some fairly obvious shortcomings. When circumstances change, so should expectations.
This blog has often berated transportation models – and modellers – for the shortcomings of the standard models. This particular issue is one that is often key to making decisions about choices for the future. How do you assess the willingness of people to choose a new route or mode which is currently not available? Two methods are in use: Revealed Preference (RP) and Stated Preference (SP).
The first one, RP, makes some generalizations about trip behaviour as a combination of time and money known as “generalized cost”. Data is collected about trip making and this is examined in terms of the trips made and the way they get distributed between routes and modes. This gets quite sophisticated as we know that travel time is not valued by users the same way in different modes. People prefer to be moving rather than waiting, and prefer to be seated and in vehicles under most sets of circumstances. So the values ascribed to time are different: people who are stuck in traffic or waiting for a bus are conscious of wasting time. People riding comfortably as passengers on public transport can use that time to do other things – read, use their cell phones and so on. With enough data about trip making on different routes and modes, it is possible to extrapolate what the new route/mode will be worth to its users in terms of time savings or greater comfort and convenience. It’s not hard, for instance, to compare High Speed Trains to airlines for city pairs and come up with a general rule that shows the threshold at which one will be preferred over the other. RP is only reliable for as long as the values assigned to the parameters do not change between the time the data was collected and the new project opens.
SP uses consumer surveys to get people to consider alternatives and tell the surveyor which one they prefer. It is widely used for all kinds of decision making – the appeal of new products and services, or even political preferences. And again it can get quite sophisticated in getting people to make comparisons and choices which are largely conjectures based on synthetic alternatives. And has a varied track record in accuracy of forecasting what choices get made in the real situations. In a region where there were no road tolls, it is quite surprising to me that the reported response to tolls for a bridge in Ohio were so negative. When people who used the free Albion Ferry were asked if they would be willing to pay a toll for a bridge, they said yes. And given the multiple sailing waits experienced at peak periods, the value they put on their time could also be measured in terms of the length of the trips they would otherwise have to make – crossing the old, congested Port Mann or the much more remote Mission Bridge. In any SP survey, people want to impress the surveyor with their rationality and decision making ability. In good ones, this well known issue is taken into account.
The traffic forecasts for the new Golden Ears Bridge were wildly optimistic. Traffic has so far failed to meet the expectations of the bridge builder/operator. A similar mistake was made with the Port Mann. And this being BC where we design P3 projects to shift money from the pockets of the public to private sector companies, we now pay through taxes for these errors. The bridge builder/operator faces no revenue risk.
In the case of the Port Mann there was already a good reason to doubt the traffic forecast. There was no bus service over the old bridge. It would have been easy to provide one, that would avoid the congestion of the bridge approaches by using bus lanes on the shoulders of the freeway. The 555 could have been running years ago – but that was avoided as it would have reduced the perceived “need” for freeway widening. And actually much potential new transit traffic could also have been won by running a direct bus between Surrey and Coquitlam instead of relying on an inconvenient, out of the way combination of existing SkyTrain and bus routes.
There has been a secular change in perceptions of the value of time and willingness to pay tolls that has not been taken into account by the forecasters. And that is that real personal incomes have been stagnant or declining for a long period of time. Moreover, the expectation that things will get better in the future – which seemed common for most of the post war period – has evaporated. Tax cuts have benefitted the wealthy disproportionately, since they have been replaced by all sorts of fees and charges which are levelled instead: they are applied with little or no consideration of ability to pay. The toll across the Port Mann Bridge is the same for the office cleaner and the CEO.
The other thing that has to be noted is the reliability of the data that is being collected. I have observed many times how this region collects far less travel data in terms of sample size than other cities: and this is orders of magnitude difference. But some of the most reliable data on trip making came from the census – at least for the journey to work mode choice over a very long time scale.
And then there is this
“The workplace has been overwhelmed by a mad, Kafkaesque infrastructure of assessments, monitoring, measuring, surveillance and audits, centrally directed and rigidly planned, whose purpose is to reward the winners and punish the losers. It destroys autonomy, enterprise, innovation and loyalty, and breeds frustration, envy and fear. Through a magnificent paradox, it has led to the revival of a grand old Soviet tradition known in Russian as tufta. It means falsification of statistics to meet the diktats of unaccountable power.”
I have often used British Rail on this blog as an example of what can go wrong when governments decide to privatize a pubic corporation. It has long been a shibboleth that the public sector is necessarily inefficient, and that private enterprise, subject to market forces, will always produce a better outcome. The real question – often never asked – is “better for whom?”
Last week the Trades Union Congress published a report of independent researchers on the performance of railways in Britain since privatization. Unsurprisingly the researchers conclude that not only has public support for railways increased, but that the public has not been well served. Shareholders, and other “stakeholders” have done well, at public expense, but the supposed benefits have not been achieved. This has long been the view of objective observers. The TUC, of course, includes railway workers among its members. It is important to note the TUC recognized that “this final report would inevitably diverge from the Unions’ position when it came to analysis and recommendations.”
Two other points I want to make up front, which stand in stark contrast to the way things are done here. First there are indeed independent, publicly funded researchers able to conduct such studies. That used to be the case in Canada too. Our present government seems determined to put a stop to that, both by cutting funds for essential data collection (such as the long form census) and secondly ensuring that any publicly funded body is put under close surveillance to ensure that it toes the party line.
The TUC issued a trenchant press release – but they also made the entire research report available free on line. That also seems to be exceptional here. Though I do want to acknowledge the great improvement we have seen in Translink’s data provision recently.
The BC Liberals will continue to promote their own version of selling off public assets at fire sale prices, and ensuring that private corporations and their shareholders continue to profit while public services are reduced. We can expect to see a continuation of promotion of the P3 as the key to all that is worthwhile, and all kinds of manipulation to ensure that the private companies do well even when the case for a P3 cannot be supported – as with (just to pick two from many) the Port Mann Bridge or BC Place. I confidently expect that there will be yet more contracting out of public services, to ensure that workers get lower pay, “customers” get less service but shareholders and executives see increasing rewards without any risk at all. Fees and charges of all kinds will continue to be imposed on those whose real incomes are declining – all the while telling us how lucky we are to be in a free enterprise economy with “the lowest taxes”. There will be no mention at all – as is also the case with the TUC – of the damage to the environment.
POSTSCRIPT and, of course, it’s not just our problem “The almost comical level of fraud and bribery …”
The Great Train Robbery looks at many of the key objectives behind the decision of John Major’s government to privatise the railways in 1994. The report questions whether any of these have been achieved:
- Cost effectiveness – train operating companies are entirely reliant upon public subsidies to run services. The top five recipients alone received almost £3bn in taxpayer support between 2007 and 2011. This allowed them to make operating profits of £504m – over 90 per cent (£466m) of which was paid to shareholders.
- Extra investment – the report shows how the average age of trains has risen since rail privatisation, from 16 years in 1996 to 18 years old today. Just £1.9bn was spent on rolling stock between 2008 and 2012, compared to £3.2bn between 1989 and 1993 (the four years before privatisation.)
- Over 90 per cent of new investment in recent years has been financed by Network Rail (the taxpayer funded body responsible for rail infrastructure), and comes mainly from taxpayer funding or government-underwritten borrowing, says the report.
- Significant upgrades to infrastructure, such as the development of the West Coast Mainline, have been paid for by Network Rail.
- Passenger comfort – the report says while there has been a 60 per cent increase in passengers since 1994/95, there has only been a 3 per cent increase in new carriages, resulting in serious overcrowding on many routes.
- Innovation – even where there has been private sector investment in new technology, such as Virgin’s tilting trains, it has been underwritten by the state through subsidies to train operating companies and guarantees to rolling stock leasing companies.
- Added value – The Great Train Robbery shows how train operating companies paid Network Rail just £1.59bn in track access charges in 2012, compared to £3.18bn paid to its predecessor Railtrack in 1994. This represents an ‘indirect subsidy’ from taxpayers as train companies are getting track access on the cheap. It also means that the full extent of taxpayer subsidy is far greater than is often reported.
- Investment in infrastructure has largely been funded through borrowing by Network Rail which now has debts of over £30bn, and is spending more on repaying this debt than on railway maintenance, says the report.
- Competitive fares – the UK has the most expensive rail fares in Europe. Long distance, day return and season tickets are all around twice the price of similar tickets in France, Germany, Italy and Spain, which have publicly-run rail systems. Average train fares in the UK increased at three times the rate of average wages between 2008 and 2012.
- More passengers – the report dismisses claims that privatisation has helped increase the number of people travelling on the railways.It says that passenger growth has mostly been down to rising GDP and changes in employment patterns rather than because of privatisation.
MAJOR construction works on Vancouver’s Skytrain Evergreen Line are set to begin by the end of the month after the provincial government of British Columbia signed a finance-design-build contract for the $C 1.4bn ($US 1.39bn) project with the EGRT consortium, which is led by SNC-Lavalin.
That comes from The International Railway Journal – but my question to the readers of this blog concerns just one word. “Finance“. Why do EGRT need to finance anything?
If my understanding is correct, the funds for building this project come from three levels of government – Canada, BC and Translink. The good thing about government funded projects is that there is almost no risk – since the loans needed to pay for the outlays can all be “underwritten” by the taxpayers – you and me. That means that when governments go to the financial markets for loans, the interest rates they have to pay are lower than commercial activities. You can buy so called “gilt edged” bonds, but the rate of return will not be anything like as great as if you buy commercial bonds or, even riskier, buy equities. The return won’t be great but it is (almost) certain. Governments of places like Canada, or BC or even Metro Vancouver do not normally welch on their obligations, because they have the power to raise taxes. Of course if there is a violent revolution then the bonds you bought will become worth very little: some people do sell Chinese railway bonds from pre-revoltionary times.
You probably recall that the Port Mann Bridge was going to be a so called “private sector partnership” but they could not finance it. So it had to built using more conventional public sector financing – which, like I say, was cheaper.
So can someone please explain to me why we have to pay EGRT to finance this project as well as design and build it? I do understand that there are economies of management when contracts to design and build are let. And sometimes – but not in this case – operate and maintain too (like the Canada Line). But since this is an extension of the existing SkyTrain system, the operate and maintain bits are still with the Translink subsidiary British Columbia Rapid Transit Company Ltd. And while the Translink web page is open about its operating companies, there are other companies it owns that do things that provide much better value for money than going to outside commercial ventures. Their own insurance, for instance. A nice little earner is also the sale of rolled coins – where Translink beats the banks, if you need lots of rolled change.
While right wing politicians have long made it an act of faith that the public sector is inefficient and wasteful, the reality is quite different. Some places do indeed compare P3s to public sector comparators – and the private sector doesn’t always win. Our own Partnerships BC has a quite different method of operations – “Our mission at Partnerships BC is to structure and implement partnership solutions which serve the public interest” and indeed the Evergreen Line is one of their projects. You won’t find a public sector comparator on their site.
In case you missed the announcements, in the same edition of IRJ is the announcement of the 47km extension to RER Line E in Paris/Ile de France for €2bn and of a recommended second Cross Rail project in London for £12bn. Now that’s what I call transit investment. The only equivalent size projects here are, of course, highways.
Clark Williams Derry on Sightline Daily (a really useful resource that I recommend you subscribe to if you don’t already) has a very useful series on declining traffic. No 37 in that series picks up a story from the Orange County Register which he headlines “Southern California toll road debacle raises questions for the Northwest”.
The reason for this contribution to the discussion is that he apparently thinks that the states of Washington and Oregon are all that makes up the North West – and we in BC actually have a slightly different reason for caring. So read what he says first and then come back, because while what he says is all well and good for them, our very peculiar P3 system – and the even weirder Port Mann set up – makes this a much more immediate concern. We have an election this spring and here is further reason to change our provincial government, if we didn’t have reason enough already.
Here’s the pictures
The conclusion drawn from this data
The toll route is generally free-flowing, but drivers prefer parallel, toll-free alternatives, even if they’re clogged with traffic.
That is very important but entirely consistent with what we have seen on the Golden Ears Bridge.
The traffic forecasts for the Southern California roads were made by the same consulting firm—CDM Smith, formerly Wilbur Smith—that performed the investment-grade bond study for Washington’s SR-520. And that firm was recently contracted for similar study on the Columbia River Crossing connecting Portland, OR with Vancouver, WA. CDM Smith has a good reputation—but that didn’t protect them from producing projections that went badly awry.
Now this is where we part company with “The North West”. Our projections are done by a different company, but while I have not looked in detail how either forecast was done it does not matter. As Jeff Tumlin pointed out, four step transportation models are no better than tarot cards at forecasting anyway. Or, as Clive Rock who looked after traffic forecasting at the GVRD and Translink liked to say, “You can’t steer the ship by staring at the wake”. They do this with personal finance too – past performance is no guarantee of future performance – is the caveat entered in every prospectus. But that is way all traffic forecasts are still done.
We do not fund transportation expansion by raising bonds the way they do in the States. Equally, we do not transfer risk to the private sector the way they have done in Australia. This got them some very large bits of infrastructure for free when the contractor operators (DBMO = design build maintain operate) went bust. The people who owned the companies’ shares and debts caught a cold, but the public sector was not on the hook. Here, if a DBMO gets the forecasts wrong, the risk is transferred to the tax payers. So we are now picking up the lost revenue on the Golden Ears. As we will on the Port Mann – which is no longer a P3 as no-one was daft enough to want to lend that turkey money, and the government was forced to admit that public sector borrowing was cheaper than private sector borrowing. As it always is, when the taxpayers can be expected to back the debt.
So we can now add the Port Mann “widest bridge in the world” to the long list of public sector projects that were supposedly safe in BC Liberal hands but have proved to be financially disastrous. BC Hydro was doing very well – until it had to subsidize run of the river private sector projects. BC Rail actually had been making money but was sold to CN (the “lease” idea is simply spin) for much less than it was worth. BC Ferries thought they could raise fares without worrying too much about price elasticity. PAVCO had to replace the roof – and never thought it needed a business case – which was just as well as there is no business model where that kind of investment makes any sense financially. Even well run stadia are subsidized – usually on the argument that it brings free spending punters to the area. Even casino operators now recognize that this mostly just cannibalizes other enterprises. The tv adverts currently running which talk about the economic models of unspecified other places assert that somehow BC has a different model. Actually, this is just another lie. Public sector spending and the running up of the debt of the public sector has been out of control CORRECTION A reference here to the Auditor General has been removed due to this tweet from the CBC “Christy Clark asks AG John Doyle to stay on 2 more years”
Please understand that I have no problem at all with using the public sector to stimulate the economy when that is required. Trying to balance the budget was what caused the Great Depression of the 1930s – and all of FDRs programs only mitigated that slightly. It was only the huge public spending of the second world war that got America working again. It was only the Marshall Program that resurrected Europe – and the reason the UK fell so far behind was that it was not covered by that plan and had to pay back all the dollars it had borrowed before trying to start repairing the damage. BUT that does not mean I support public sector spending on any and all projects. Indeed, as an economist working in or for the public sector for all of my career, reviewing forecasts and critically examining “business cases” (then called cost benefit analysis, which looked a bit further than just profits for banks) project selection was always the most important task to get right. What project – and where – and how its done, were all looked at carefully and objectively. Only when I came to BC did I come upon a system which said, in effect, the current political party has a bee in its bonnet about some idea or other, and your job is to make this idea look good. Actually that is not fair . As a consultant, I found that it was also the practice of at least two banana republics and one religious hegemony. Just substitute that words “current political party” with whatever they called their leaders at the time.
But what we have now – and what the US has had and to some extent still does – is a right wing party that says it will balance the budget, control spending and reduce the debt, but actually does exactly the opposite. And does that not because stimulating the economy and providing growth will make the population as a whole better off (“the rising tide floats all boats”) but simply to funnel ever larger sums from the public coffers to their friends and supporters – mostly corporations who owe no loyalty to any jurisdiction they operate in.
No we cannot count on toll revenue forecasts, but the corporations can indeed count on tax revenues collected for them by a compliant government.
That’s the trouble with talk radio. In between the adverts for cars and the best deal on tires, someone accuses you of saying something you didn’t say. It is not “either/or” (roads or transit) – at least becuase the road expansion is well under way and in the case of Port Mann/Highway #1 nearing completion. And I really do not expect a magic bullet or a tooth fairy to fund it – both things that got discussed before we got to the callers. In fact I think the callers got lined up before I started speaking. They evidently weren’t listening.
But just supposing someone was listening to CKNW this morning and got intrigued this is what I am prescribing.
We spent $3bn on a bridge and have to pay that loan down, so users are stuck with tolls for the bridge until it’s paid off. Meanwhile we have to find a way to fund transit expansion. It is not enough to come up with a formula that enables Translink to carry on as now – or allow some modest increase. We need a way to to ensure that transit can grow its market share. The current plan for 2040 is way too modest in my view. We need much more and quicker than that.
I am also disenchanted with dedicated funding sources. The problem is that if you tie your funding source to something that is also going to change behaviour – and you are successful – then you are stymied. To some extent that has happened with the gas tax – and also happens with the carbon tax. I also dislike user fees – for the same reason. Pricing something is a good way to reduce consumption. It is also unfair to those who have little income – and therefore very little discretion on how to spend it. Of course those who are comfortable are quite happy to state that since they can afford the fee, everyone else should be willing to shoulder the same burden. Except, of course, they do not share the same ability to do so.
The right wing has seized the agenda on taxes and made us convinced that income and corporate taxes have to be reduced in order to make us more competitive. That has simply got us engaged in a race to the bottom. We now work longer – households need multiple sources of income – in order to just stay where we were. Real incomes have declined. We may have the lowest income tax but that is only because we now pay through a variety of fees and charges for the same services – or rather in many cases, a reduced set of services. Plus a greater reliance on sales taxes.
We continue to subsidize fossil fuels – both nationally and provincially. The latest expansions of natural gas exploitation are being achieved with a concession of NO payment of royalties to the province. The expansion of the oil sands in Alberta is only possible because of an extraordinarily favourable tax treatment. In both cases we would be much better off leaving it in the ground. For one thing the planet cannot tolerate the current rate of increase in carbon emissions. Since the IPCC’s warnings on climate change, CO2 output has not only increased, the rate of change has also increased. Fossil fuels left in the ground would also become much more valuable in future – because there are so many other things you can do with them other than simply burning them, all of which have much great value added and many of which are going to be very difficult to do in future.
So I am advocating a two pronged approach.
1. Stop funding silly things (subsidies to oil and gas, F35 jets, mega-prisons ….)
2. Increase income tax for the rich and corporations – as well as a switch of enforcement away from chasing small amounts from the poor to the huge sums squirrelled away illegally in tax havens.
You will note that these funds then have to come from the federal government as well as the provincial government. This is intentional. Canada is the only advanced western economy that does not have a national transit program.
Senior Government support has to extend to operating funds as well as capital funds. We also should stop collecting tax from transit agencies – it is ludicrous that we levy a tax to pay for transit on fuel burned in transit buses.
I am not going to suggest that we abandon private sector partnerships altogether. But if we are going to do them, we have to transfer the risk to the private sector. Translink revenues are being dragged down by the deal on the Golden Ears. It is unconscionable that money raised to pay for transit is being paid to a private company who built a road bridge we don’t need – and which cannot be paid for from tolls – which is what they promised initially. We also have to look long and hard at why Macquarie Bank is still getting paid long after the P3 for the Port Mann fell apart, and the project proceeded with public funding.
There are two aspects to this – what we build and where we build it.
Currently the priorities appear to be first the Evergreen Line and then – probably – a subway to UBC (though that is not set in stone, yet). Like the Port Mann, let us assume that the Evergeen Line is a done deal. It may not be the best one, but it is too late to change.
If we commit to building a subway to UBC it will be because the current B-Line “cannot be expanded” and is overloaded, and the idea of light rail down Broadway, or more elevated concrete structure for SkyTrain, is intolerable on the West Side of Vancouver (but not anywhere else in the Lower Mainland, apparently). It will also mean that the part of the region that currently enjoys the best transit service will get more and, absent a new funding arrangement for transit, that means less everywhere else.
The callers to CKNW this morning were appalled by the idea that they could be expected to use a bus. I cannot say I blame them, given what they know of bus service here. But if we are going to persuade people to get out of their cars and use transit, it is going to have to meet at least some of their needs some of the time. We also need to make the newer, better services widely available. Our current approach seems to – and does – favour some parts of the region over others. In part that is because the operator, being cash strapped, has to concentrate resources in areas where they get the most return. So if there is a ridership, there will be service – not the other way round. That is why things never change. Because we keep doing what we have always done.
So in future we will have to see some innovation. And in some cases that means taking a risk with a new kind of service, in a place that doesn’t see it now. When the railways first got into the commuter business, at the end of the nineteenth century, there were no suburbs. They built out into green fields, and hoped that those would become new subdivisions. A bit like the way the transcontinental railway was built – in the expectation that they would encourage settlement in what were then seen as “empty” areas. Indeed, that was also the way that the interstate highways got taken over by people driving to and from work. Because subdivisions popped up like mushrooms after rain, right next to the off ramps.
So if we have the ability to build rapid transit, it can only go to places that will see rapid and sustained increases in population. When the Expo Line was built through the East Side of Vancouver the residents of the areas around the stations were mostly successful in resisting an increase in density. We cannot afford that again. This seems to me to be a linkage that would allow for investment – and is a model in use in Hong Kong. There, the Mass Transit agency is a property developer. If that makes you queasy, turn it on its head, and come up with an experienced developer who knows how to do high density, mixed use development and create some kind of vehicle that ties the risks and rewards into producing transit and transit oriented development together. Stop thinking about transit – and transportation – as an end in itself. It never has been. It has always been inextricably linked with land use. Instead of building a new transit line and handing much of the increase in land value to a few lucky land owners and developers, indulge in some “joined up thinking” and get a better built environment and less car dependance on the same dime.
But rapid transit is hideously expensive – almost as much as building massive highways and bridges – and relatively limited in its reach. And we need solutions for a very wide area, where mostly people drive themselves around in single occupant vehicles. So we start by tackling the paradigms of ownership and use – since most cars sit idle most of the time, and only one or two of their seats are ever occupied. That means breaking down the barriers we have erected – mostly to protect transit. The rules we now use came into being once car ownership began to spread after World War one, and “jitneys” threatened the viability of the (private companies’) transit systems. We are already seeing the impact of widespread, mobile information systems on car sharing. It would be even more rapid if it were not for these obsolete rules. Indeed, even those lucky enough to have operating licences apparently cannot make money because of the way the rules are applied.
I do not advocate a free for all deregulation – but I do think that there is obvious potential when entrepreneurs keep popping up with ideas that seem to work but get slapped down – mainly to protect vested interests. It is also the case that even where transit service is good, people can come up with other services that appear to meet local needs better. So obviously there needs to be some kind of oversight, but the rules need to be drawn up to protect the broader public interest, and not just the narrow “economic interest” of the industry, as our current regulator has it. In some respects, with the creation of a new smartcard payment system, giving multimodal regionwide access, Translink actually will have a useful tool to ensure cooperation. So the same card that you swipe to ride the bus or SkyTrain could also get you a shared taxi, or a even an exclusive ride in a shared car, like car2go. It is instructive that modo – the car coop – expands in areas that are well served by transit. It is complementary – not competitive – to the transit system. You cannot expand the reach of transit deep onto low density single family home areas with a 40 foot diesel bus. And there are limits to what can be done with shared rides and demand responsive systems. The DART in HandyDART once meant “Dial a Ride” – but you now have to book days in advance and be qualified. The service that results satisfies no-one, but contains the germ of an idea that ought to be allowed to flourish, and benefit from the extra-ordinary explosion of information abilities of smart phones.
It is significant, I think that the companies that need to hire bright young minds now provide bus service to get their employees to the workplace. The buses they use look nothing like a transit bus – they have wifi on board for a start – and do not pick up at bus stop signs. But a new app allows them to be mapped. I am willing to bet that the man who upbraided me this morning for expecting him to use something as slow and cumbersome as our current transit service would be quite happy to get on board one of these. The IT aspect means that all our current practices of mapping and scheduling can be discarded. The routes can be adapted on the fly, in real time, to meet changing need. The rigidity of regulation means that Greyhound can’t adapt service levels to changing needs the way Bolt Bus (its subsidiary) can. The same paradigm starts to make suburban shared ride services look feasible even of they don’t look a lot like transit does now – and maybe that is a good thing in and of itself.
One of the reasons young people do not want a car – or a mortgage – is because we have loaded them down with student debt. Until they pay that off, a car loan or a 25 year mortgage is neither practical or appealing. Moreover, they no longer use the same systems we did to get in touch with each other. They have texts, twitter and Facebook. Almost anything can be set up on the fly – just ask the Occupy movement.
I really doubt that it is possible to win over everyone to using transit and I am not even willing to try. There will always be some people driving everywhere all the time – just steadily less of them as a percentage of the total. After all, we could not cope with a sudden influx to transit – as the UPass so convincingly demonstrated. The way we built the Canada Line showed we had not really thought through what “change modal split” actually meant. There already enough people who want to use transit – and who want to use it more often – but are frustrated, to provide a significant increment in transit use. The increase in service just to meet those desires would also bring in more riders, as service frequencies and reach would make those services more attractive. This is the benevolent cycle of growth that has been seen in so many other cities that have stuck consistently to expanding transit. We, on the other hand, seem so besotted with short term point scoring that we are going to enter the other spiral – where cost cutting reduces service, and thus ridership and thus to further cuts. I am convinced that these systems will always respond to these dynamics. There is no steady state. It is either growth or decline.
So the strategy I am suggesting is for conventional transit to incrementally add to its service – which means, right now, more buses. And more exclusive bus lanes – by taking road space away from single occupant vehicles. As demand grows, more limited stop and express routes – creating a hub and spoke system based on town centres, supported by an intricate and much more varied web of feeder services. That means space at the hubs has to be provided for bike storage, or shared bikes, as well as park and ride, kiss and ride, shared cars and station cars and shuttle buses. Rapid transit stations are, of course, hubs – as well as centres of mixed use, denser development – because they are within walking distance of so many services and facilities. I doubt that there will be many new rail based services added for a while – but obviously if there is an underused rail corridor available it must be pressed into use. Freight gets to use the lines when people are sleeping. Where there are highways, there will be rapid bus services – with priority where needed. At the very least so that those who insist on driving can have the educational experience of seeing the bus swish past them while they are stuck in traffic. Elsewhere it will have to be more and better buses – and the whole panoply of related “Better than the bus, cheaper than your own car” services.
Since we have hobbled public enterprises, and are convinced of their ineffectiveness, the expansion has to incorporate private enterprise. But we should look long and hard at what we are doing before we do it. Compare and contrast BC Hydro before and after IPPs, for instance. Learn from the experience of Britain with its railway privatization – or the Underground in London – and benefit from their experience.
There is no one simple solution – because although the problem looks straightforward (how to pay for transit) it is in reality complex and difficult because of all the connections. Politicians like big capital projects because they get to cut a ribbon. But what is needed is a whole range of small, incremental changes, and a shift in mind set. Mostly it needs a change in the way that government behaves.
TRANSPORT for London (TfL) has ended its Prestige public finance initiative (PFI) contract with the TranSys consortium of Cubic Transportation Systems and HP Enterprise Services and replaced it with a conventional contract with Cubic.
The PFI contract was awarded in 1998 for a period of 17 years to install new fare collection equipment and so introduce the Oyster smart card system in 2003.
TranSys took on £190 million of debt to fund the PFI and TfL has repaid the outstanding £101 million. TfL has also purchased the rights to the Oyster brand for £1 million. TfL says the new contract with Cubic for all transport ticketing will save about £10 million a year.
That’s the complete story from the International Railway Journal.
We don’t call them PFI – we call them P3s – butt he idea is the same. And in London, they have been a disaster and this is just the latest in a series of decisions to save money by going to a conventional contract. The savings, as noted, are significant.
BC has a politically dogmatic approach that says that while they recognize that it does cost the private sector more to borrow for capital projects, the private sector is so much more efficient that there are savings. Of course they do not have an objective private sector comparator requirement as part of the project evaluation – a British requirement. There could well be objective data that shows that the P3s are very good for the private sector bottom line, but at the expense of the taxpayer. That is certainly the experience of most of these arrangements.
Translink is of course forced into such deals – and as we have seen with the Canada Line – there is more than just the cost of capital to be concerned about. Contracts that are so inflexible that it is not possible to utilize the available capacity when demand rises faster than original expectations – that should have been the story yesterday, not cupcakes given away. It should also be of concern that the funding gap on the Evergreen Line is still not yet filled – and a P3 is supposed to be part of that too. Even though the majority of the funding in place comes from the public sector it means that the contractor will have a disproportionate amount of power. Just like the way that Translink now cannot divert empty trains from the Airport branch to serve Richmond, where demand is much higher.
I do not think it is likely that the current administration will change its policy with respect to P3s, but the longer they stick with it, the dumber it is going to look.