SRT to be shut down for refurbishment (2015)

[nfitz]

Though when the Spadina funding was first announced the per/km cost was on the order of 250m/km, with the cost going up past 300m considering cost at time of delivery. So you're double counting inflation a bit, no? Going off the original announced price, we've seen nominal RT cost inflation on the order of 6.4% p.a. Adjusting to 2012 dollars would bring that down to 5.2% p.a.

I'm not doing anything. I'm simply saying that in a large construction project you'd expect costs to rise 40% in a 7-9 year period simply based on inflation. I haven't looked at any of the prices as part of this, I'm simply calculating the period of time that you'd take to get a 40% increase looking at typical 4% or 5% price index rates.

Over the long run this is clearly something of an existential issue for public transit. It can't really be a systemic alternative to cars if it faces such rapid and sustained cost growth.

The same inflation rate applies to other large infrastructure projects. Roads, hospitals, etc. It's not transit-specific. More to do with the ever increasing cost of the gasoline, concrete (limestone), and steel, all of which have increased at faster than the rate of the consumer price index for years. And likely will continue to given ever dwindling fuel supplies, lack of new local quarries, and the ever increasing international cost of steel. Typically the other driver has been wages, but that hasn't been a particular issue recently.

This should be very troubling for transit activists. It's clearly not sustainable for capital costs to increase at twice the larger economy for ever.

Or road activists. Or even someone who wants a new sidewalk to their house.

 

[rbt]

Over the long run this is clearly something of an existential issue for public transit. It can't really be a systemic alternative to cars if it faces such rapid and sustained cost growth.

Highway/Bridge/etc. costs are going up at exactly the same rate. It's a more general construction cost issue than something related to transit.

Private industry (condos) experience pretty much the same cost escalation with some variation due to market timing.

 

[diminutive]

The same inflation rate applies to other large infrastructure projects. Roads, hospitals, etc. It's not transit-specific. More to do with the ever increasing cost of the gasoline, concrete (limestone), and steel, all of which have increased at faster than the rate of the consumer price index for years. And likely will continue to given ever dwindling fuel supplies, lack of new local quarries, and the ever increasing international cost of steel. Typically the other driver has been wages, but that hasn't been a particular issue recently.

Oil prices since 2008 have hardly changed. And while a lot of commodities have spiked since 2000 (for various reasons), it's hardly the sole determinant of costs. Afterall, when commodity prices tanked during the 1990s it's not like building subways suddenly became cheaper.

And if you're attributing most infrastructure costs to global commodities (oil, steel), then why aren't our costs more comparable with Europe? Paris is expanding LRT (like what we are trying to do...) yet is realizing costs around ~40m/km CAD.

It's a weird kind of double logic whereby all the cost increases are the fault of international factors, yet when other cities manage to realize way slower cost growth it's somehow not comparable or not feasible in Toronto.

Or road activists. Or even someone who wants a new sidewalk to their house.

Not many more road activists...

 

[diminutive]

Private industry (condos) experience pretty much the same cost escalation with some variation due to market timing.

Not to the same extent. Since 2007, apartment construction in TO has gone up 14%, vs. 40% for subways (Spadina->Yonge) and nearly 100% for in median LRT (TC->OC). Non residential structures nationally have even less growth, but I can't find that data for Toronto specifically. Electrical utilities, which are maybe closest to transit in terms of commodity usage, has had nowhere near the same growth rates.

EDIT: A closer example would be the military where each generation of hardware is drastically more expensive than the last.

 

[nfitz]

Oil prices since 2008 have hardly changed.

Really ... your going to look at only 4 years? It's a long-term average .... I bet they rose more than 4% on average the previous 4 years.

And if you're attributing most infrastructure costs to global commodities (oil, steel), then why aren't our costs more comparable with Europe? Paris is expanding LRT (like what we are trying to do...) yet is realizing costs around ~40m/km CAD.

Our tunnel costs for Eglinton are less than Crossrail in London, even though we have a similar diameter twin tunnel. I haven't looked at Paris LRT costs ... but what does that include? Does that include a complete rebuild of a 4-lane road as well, like ours? Does it include vehicles? Does it include land aquisition? Does it include the design? Does it include power stations? Does it include catenary? Does it include signals? Does it include new sidewalks? Or is that just the tender for the track construction in an existing ROW?

Not many more road activists...

Is that a sentence? Where is the verb?

Since 2007, apartment construction in TO has gone up 14%, vs. 40% for subways (Spadina->Yonge)

No one here has said the cost to built a subway has gone up 40% between 2007 and 2012. The use of long-term inflation rates for future predictions doesn't mean you can apply this for every time period. The construction price index hasn't risen that much from 2008 to 2011 compared to other years. There was a recession. How much did condo costs rise between 2002 and 2007? Bet it was more than 14%.

For example, look at MTO's tender price index - http://www.raqs.merx.com/public/bulletin/articleView.jsf?articleId=15874851#
There has been virtually no overall increase in the most recent 3 years ... however the previous 3 years it went up 25.9% - 8% per year!

This is one of the reasons Spadina might actually come in at/under budget. If you look at the value of the major contracts, almost all of them have come in below the estimate, because construction prices have actually dropped in the last few years. But this is a short-term situation and it would be unprofessional not to assume long-term average increase in the costs of inputs.

I found http://www.peelregion.ca/finance/dashboard-eco/constr-proj.htm interesting reading as well, looking at the cost increases of various inputs.

 

[BurlOak]

extend the BD subway to Sheppard? This makes the most sense IMO.

Summarizing this thread, there are several options.

1. Extend B-D to Sheppard and no SRT closure required.
2. Change technology to shorten closure duration.
3. Provide temporary parallel bus service - temporary bus lanes
4. Permanent parallel bus service improvements - widen Kennedy
5. Provide temporary GO train from Kennedy to Sheppard.

For the shutdown, option 1 is the best.

In the long term, I fear this option just increases traffic along B-D and at the Yonge interchange - even with a DRL. With the DRL, the only transfer oportunity is Pape and Yonge, and it would be quite difficult to turn this existing station into a major interchange station. I like the Elevated Eglinton interlined with SRT option since it would provide a better distribution of passengers (can transfer at Kennedy, DM/Eg, Yonge/Eg, Pape, Yonge/Bloor) and is significantly less expensive.

To answer the shutdown question, I think option 5 and 3 are best. I would also provide the Contractor with some incentives to reduce the closure time (i.e. $ per day penalties) and they could consider changing technology or changing construction techniques to minimize disruption.

 

[diminutive]

No one here has said the cost to built a subway has gone up 40% between 2007 and 2012. The use of long-term inflation rates for future predictions doesn't mean you can apply this for every time period. The construction price index hasn't risen that much from 2008 to 2011 compared to other years. There was a recession. How much did condo costs rise between 2002 and 2007? Bet it was more than 14%.

For example, look at MTO's tender price index - http://www.raqs.merx.com/public/bulletin/articleView.jsf?articleId=15874851#
There has been virtually no overall increase in the most recent 3 years ... however the previous 3 years it went up 25.9% - 8% per year!

This is one of the reasons Spadina might actually come in at/under budget. If you look at the value of the major contracts, almost all of them have come in below the estimate, because construction prices have actually dropped in the last few years. But this is a short-term situation and it would be unprofessional not to assume long-term average increase in the costs of inputs.

I found http://www.peelregion.ca/finance/dashboard-eco/constr-proj.htm interesting reading as well, looking at the cost increases of various inputs.

If commodity prices have been stable to negative since the start of Spadina, to the point you reckon that line may come in under budget, then why is the Yonge extension shaping up to be 40% more expensive/km?

You originally explained the 4-6% real cost inflation these projects see as the result of commodity appreciation ("more to do with the ever increasing cost of gasoline, concrete et al..."). Yet, due to larger global economic factors, there's been very little if any commodity inflation in these sectors. But the Yonge extension is still far more expensive in real terms than the Spadina extension. And in-median LRT is almost twice what it was expected to be when TC came out.

Is that a sentence? Where is the verb?

Not sure if this is genuine grammatical curiosity or passive aggressive grammar-Nazism designed to make you look smart, but in colloquial speech you can drop verbs. 'you from around here?' is an easy example since it's obviously a contraction of "ARE you from around here?"

 

[rbt]

If commodity prices have been stable to negative since the start of Spadina, to the point you reckon that line may come in under budget, then why is the Yonge extension shaping up to be 40% more expensive/km?

I wasn't aware it had been tendered.

 

[diminutive]

I wasn't aware it had been tendered.

Which is why I said "shaping up." If it were tendered tomorrow, do you think it would be less than the 420m/km that's being estimated currently and closer to Spadina's costs?

 

[ssiguy2]

One of the benefits of PPP is that you don't get this "escalated" costs crap.

Once the parties sign on the dotted line the amounts and time are firm. It doesn't matter if inflation starts to run at 100% per year or we enter a depression and labour costs drop by 50% overnight, the price agreed to by all parties is the price you pay. It works well for all concerned. It also has political advantages as the politicians and bureaucrats can claim everything came in on-time and on-budget. It is also advantageous for the businesses as they can state for future contracts that they have a proven track record of building transit projects in a cost effective and timely manner.

PPP also tend to be easier to seel to the public when revenue increases are needed. If people are asked to pay, for example, and extra 2 cents per litre to help pay for the project that don't want to be told in 3 years that due to "unexpected events" that now it is running over budget and their 2 cents become 5 cents. It helps make the public more confident that their tax dollars are going to where they were intended and that City Hall and the transit agency are actually competent managers. This will be a real challenge in Toronto where the public, and rightfully so, feel that transit projects are tendered the same way highway projects are in Montreal.

 

[rbt]

Which is why I said "shaping up." If it were tendered tomorrow, do you think it would be less than the 420m/km that's being estimated currently and closer to Spadina's costs?

Tomorrow? No. The big construction fims in Toronto are busy dealing with Spadina and Eglinton construction. They would need to hire and train new staff because much of their existing staff with expertiese in that area already has work.

If it was tendered tomorrow and work was stopped completely on Eglinton and Spadina, then I would expect it to be within 10% of the cost of Spadina for equivalent work (underground train storage area, etc. would be extra).

That said, I have absolutely no idea what the executives at PCL and friends would charge.

 

[rbt]

One of the benefits of PPP is that you don't get this "escalated" costs crap.

As someone who has bid on PPP projects the government put out (technology, not construction); I can assure you that the Private Partner doing the work does factor it in. In fact, we even factor in the number of bids we need to make until we win 1 (I.e. if we win 10% of bids then each bid includes the staffing costs of making 10 bids).

A general contractor doesn't do very much work themselves. They sub-tender a ton of stuff out to specialized contractors at whatever the rate of the day is.

Just because it's hidden doesn't mean it isn't there. The folks loaning billions of dollars to the bidding private partner want their money back plus some, and can also afford to hire good accounting staff.

The government actually has an advantage because they can play with monetary policy (gives them an edge at predicting inflation rates).

 

[nfitz]

If commodity prices have been stable to negative since the start of Spadina, to the point you reckon that line may come in under budget, then why is the Yonge extension shaping up to be 40% more expensive/km?

Who knows ... I haven't looked into it. I simply was saying that a 40% increase in budget between 2 different projects would be expected if they were 7-9 years apart.

You are reading WAY too much into this.

Not sure if this is genuine grammatical curiosity or passive aggressive grammar-Nazism designed to make you look smart, but in colloquial speech you can drop verbs. 'you from around here?' is an easy example since it's obviously a contraction of "ARE you from around here?"

I made the comment because I could not understand what you said. That's all.

 

[Platform 27]

The government actually has an advantage because they can play with monetary policy (gives them an edge at predicting inflation rates).

The Ontario government certainly can't, and the days of the federal government directly telling the Bank of Canada where to set interest rates are long gone.

 

[gweed123]

I think we'll see pretty soon the potential cost differential between a PPP and a non-PPP. The winning bid for the first phase of Ottawa's LRT project is set to be announced this month, with construction starting in January.

It'll be interesting to see what the quote the total cost to be, or how much they had to trim in order to keep at the $2.1 billion mark.

It'll also be interesting to compare the per km cost of the downtown tunnel vs the per km cost of the Eglinton tunnel. Same technology, slightly longer platform length for Ottawa (120m vs 90m I believe), but more or less a pretty decent comparison. If it comes in around the same figure, we'll know Toronto is in the same ballpark. If it comes in significantly lower, we'll know Toronto is getting hosed.