Translink debt, finances complicated by P3s on Golden Ears Bridge, Canada Line
The stunning reversal of Susan Heyes’ $600,000 judgement against Translink for business lost during Canada Line construction highlights how Victoria’s insistence on public-private partnerships continues to shape regional transit finances.
This is a problem that affects transit riders directly. The costs of private finance are eating resources that could be used for more service, like the Evergreen Line, Surrey Rapid Bus expansion or rapid transit on Broadway.
When the Campbell government put a priority on the Canada Line in 2003, it insisted the project include private financing. This is money Translink must recover and pay back, with interest, from its own revenues.
During the tumultuous debate on the project, the proponents proposed a tunnel all the way from False Creek to Queen Elizabeth Park. Even when the prospect of cut and cover along Cambie emerged, engineers claimed the tube would be laid in the ground during a 14-week construction period that would roll down Cambie.
Once the “fixed-price” RAV project was under way, however, the SNC-Lavalin consortium made a host of changes to cut costs, including the decision to open up the entire Cambie trench at once rather than do a rolling excavation. This added years to the disruption faced by Cambie businesses.
(Similar cost considerations no doubt resulted in the miniscule two-car platforms accessible from a single entrance, rather than both sides of the street.)
Now that the line is built, and very successful, politicians like Raymond Louie, who voted for the project despite the P3 financing, have the satisfaction of seeing a difficult trade-off produce significant transit benefits. (I would have done the same.)
But the P3 issue has not gone away.
The shackles imposed by P3 financing are also driving large Translink payments to the builders of the Golden Ears Bridge because trips across the span are well below forecast. That means tolls are not generating enough cash to cover Translink’s payments, forcing $68 million in extra costs since 2009.
The much-vaunted “risk transfer” to the public sector touted by P3 proponents is clearly operating against Translink here. The bridge builders get their money no matter what and Translink pays the premium of private sector financing as well.
Translink’s growing debt load includes the extra costs incurred by using private finance — instead of cheaper public financing — to pay for major projects like Golden Ears and the Canada Line.
A similar “partnership” has been imposed on Translink by Victoria to require faregates, as well as smart cards, in the new fare collection system as a means of reducing fare evasion. Until Victoria stepped in and forced the arrangement, Translink had insisted there was no business case to do a major investment in faregates.
A recent Mayor’s Council meeting was advised, however, that Translink now believes the business case for faregates is favourable. A number of mayors expressed scepticism at the numbers, which include and attempt to quantify an increasing feeling of security on platforms. (No one opposes smart cards, but many challenge the addition of turnstiles and other barriers.)
So far, no one has proposed P3 financing for new projects on Translink’s horizon, which is already clouded by the lack of consensus on new funding sources. For the sake of transit riders, let’s hope it stays that way.