News   Mar 28, 2024
 252     0 
News   Mar 28, 2024
 238     0 
News   Mar 28, 2024
 279     0 

GO Transit Electrification (Metrolinx, Proposed)

I never understand p3's unless you or a friend are in the construction industry and can make money from it, and I have a feeling nobody in this government has those connections so..?? Why can't the government just build their own stuff instead of having to deal with these for-profit companies

There are countless studies that show that only one in ten (or thereabouts) megaprojects come in on time and on schedule. Some fail completely, but more often there are simply unforeseens and things that go bump in the night. Stuff happens. And, a project that is well planned and executed overall may have one or two weak links that cost a lot of time and money, which is a disservice to the 90% of it that goes well.

Our highly politicised system, coupled with a press that will happily grind axes about the 10% that fails even if 90% is positive, makes it impossible for any government to undertake public works and survive the experience. So the obvious temptation is to sell the project as a P3 with a supposed guarantee that somebody else will eat the blame if anything goes wrong along the way. Life simply doesn't work that way.

One person's caution is another person's cowardice. I blame our politicians for believing that they can find an easy way out. Until we have politicians who are prepared to ride the risk rollercoaster, for better or worse. There is no guarantee that a good person can survive our political meatgrinder, but people sure want to try.

- Paul
 
Non-paywalled version here:
Of note:
The report said as a result of the bidders' concerns "none of the teams are fully formed." The provincial agencies were considering a "revised delivery strategy" to address the bidders' issues, which the report said could impact procurement timelines.
Neither Metrolinx nor IO would say last week whether those changes were made. Asked whether the shortlisted bidding teams, which are made up of Canadian and international contractors, design firms, banks, vehicle manufacturers and other companies, are still intact and engaged in the process, McConachie said IO has "not received any formal notice from the bid teams as to their withdrawal from the procurement," and the "four teams continue to remain in the procurement."

Could be the basis of a good question to submit for the next Metrolinx Town Hall on Feb 5th.


Also, an interesting note about the size of the contract:
 
Last edited:
Metrolinx and IO have experienced severe procurement issues with the Crosstown LRT, Finch West LRT, Hamilton LRT and now RER. Interesting pattern here
Couldn't possibly have anything to do with management of Metrolinx or interference from IO at all (strong sarcasm).
 
Metrolinx and IO have experienced severe procurement issues with the Crosstown LRT, Finch West LRT, Hamilton LRT and now RER. Interesting pattern here
Couldn't possibly have anything to do with management of Metrolinx or interference from IO at all (strong sarcasm).

More specifically, it looks like Metrolinx and IO are using P3s as a political tool to mitigate the PR fallout whenever these projects go over budget. They want to shift all the risk to their private sector partners. This might also explain, at least partially, why the costs of the Hamilton LRT skyrocketed. If ML and IO were shifting all of the risk to the P3, it's no surprise that costs skyrocketed. The private sector isn't gonna take on all that risk without more compensation.

Obviously this also puts into question the viability of other ML P3 projects, including the Eglinton West LRT and the Ontario Line especially. Even before the stories surrounding RER and Hamilton LRT procurement issues broke, I had always thought that the Ontario Line proposal shifted way too much risk onto their private sector partners for the proposal to be viable. The Ontario Line proposal at this point is essentially a fantasy map, with very little concrete details set.

Metrolinx is essentially trying to get the private sector to design and build the Ontario Line from scratch, which is an extraordinary amount of risk for a company to take on. Especially in an environment such as Downtown Toronto, where you really have no clue what challenges you'll come across, and where you'll have to be interfacing with ancient infrastructure without disrupting their operation. Metrolinx wants the P3 partner to take on all that risk... for a measly $7 Billion? I'm no expert in public infrastructure procurement, but that just doesn't pass the sniff test to me at all. I would not be surprised at all if the private sector, as they did with the Hamilton LRT, will be asking Metrolinx for double or triple what they've budgeted for Ontario Line capital costs. Even if everything went swimmingly well, $7 Billion sounded like a ridiculously optimistic budget.

At this point I have to wonder if it would just be better for Metrolinx to bring much of the necessary work in-house. Otherwise the private sector will just continue to charge Metrolinx insane premiums, essentially as an exercise to avoid some bad PR fallout when these projects inevitably go over budget (as they all do). That's essentially the model the TTC uses, with them keeping much of the grunt work within the origination, while selectively outsourcing certain components (tunnels, stations, etc...). But then again, unlike the TTC, Metrolinx really doesn't have the institutional knowledge to build large scale public infrastructure themselves. An organization can't just buy that kind of institutional knowledge; it only comes from decades of experience.

Also, because the private sector has higher borrowing costs than the government, taxpayers are paying a premium to cover those additional borrowing costs, in addition to paying a premium to compensate the private sector for their risk exposure. We gotta ask ourselves if the model used by Metrolinx is even worth the financial penalty.
 
Last edited:
At this point I have to wonder if it would just be better for Metrolinx to bring much of the necessary work in-house. Otherwise the private sector will just continue to charge Metrolinx insane premiums, essentially as an exercise to avoid some bad PR fallout when these projects inevitably go over budget (as they all do). That's essentially the model the TTC uses, with them keeping much of the grunt work within the origination, while selectively outsourcing certain components (tunnels, stations, etc...). But then again, unlike the TTC, Metrolinx really doesn't have the institutional knowledge to build large scale public infrastructure themselves. An organization can't just buy that kind of institutional knowledge; it only comes from decades of experience.

If the goal is to gradually phase in electrification, perhaps it is time for the org to develop that expertise and do it in house.

AoD
 
....Especially in an environment such as Downtown Toronto, where you really have no clue what challenges you'll come across, and where you'll have to be interfacing with ancient infrastructure without disrupting their operation. Metrolinx wants the P3 partner to take on all that risk... for a measly $7 Billion? I'm no expert in public infrastructure procurement, but that just doesn't pass the sniff test to me at all. I would not be surprised at all if the private sector, as they did with the Hamilton LRT, will be asking Metrolinx for double or triple what they've budgeted for Ontario Line capital costs. Even if everything went swimmingly well, $7 Billion sounded like a ridiculously optimistic budget.

As discussed here extensively in the OL thread, the initial proposal made a variety of assumptions that to be charitable were/are highly optimistic, at worst, they border on fraud/fantasy.

Things as simple as a yard proposal, that on its face is near logistically impossible as envisioned, and the absence of addressing certain infrastructure conflicts, extraordinary expropriation costs, compensation for land taken from the City (parks, community centre), a failure to correctly evaluate corridor capacity issues, etc. etc.)

At this point I have to wonder if it would just be better for Metrolinx to bring much of the necessary work in-house. Otherwise the private sector will just continue to charge Metrolinx insane premiums, essentially as an exercise to avoid some bad PR fallout when these projects inevitably go over budget (as they all do). That's essentially the model the TTC uses, with them keeping much of the grunt work within the origination, while selectively outsourcing certain components (tunnels, stations, etc...). But then again, unlike the TTC, Metrolinx really doesn't have the institutional knowledge to build large scale public infrastructure themselves. An organization can't just buy that kind of institutional knowledge; it only comes from decades of experience.

In respect of the OL; they could contract it out...........to the TTC.........?

With respect to GO electrification, the expertise could be brought in house by hiring 1-3 top people w/good reps who currently run capital/construction for electrified passenger rail services.
 
As discussed here extensively in the OL thread, the initial proposal made a variety of assumptions that to be charitable were/are highly optimistic, at worst, they border on fraud/fantasy.

Things as simple as a yard proposal, that on its face is near logistically impossible as envisioned, and the absence of addressing certain infrastructure conflicts, extraordinary expropriation costs, compensation for land taken from the City (parks, community centre), a failure to correctly evaluate corridor capacity issues, etc. etc.)



In respect of the OL; they could contract it out...........to the TTC.........?

With respect to GO electrification, the expertise could be brought in house by hiring 1-3 top people w/good reps who currently run capital/construction for electrified passenger rail services.

Or, plot twist: outsourcing electrification of the GO network to the TTC. There’s probably no other organization in North America with more experience building and operating electrified rail services. The TTC will have far lower borrowing costs than the private sector, and Metrolinx wouldn’t have to pay a premium to account for contingencies and private sector profits. Seems like a logical move to me. Although it would never happen due to institutional bickering

I’m serious though, I think the TTC should put in the offer. There’s no reason government agencies shouldn’t work together if they believe it’ll lower costs and deliver better results.
 
Last edited:
If the goal is to gradually phase in electrification, perhaps it is time for the org to develop that expertise and do it in house.

AoD
That would mean admitting that IO/P3 is failing, and would have political implications at provincial and federal levels (not least given that arms of government other than transport use P3 to deliver)

Remember the Harper Tories pushing hard to link federal project help to P3s?
 
That would mean admitting that IO/P3 is failing, and would have political implications at provincial and federal levels (not least given that arms of government other than transport use P3 to deliver)

Remember the Harper Tories pushing hard to link federal project help to P3s?

I found the orthodoxy of P3 being automatically better somewhat questionable anyways - especially in the context of multi-decadal projects that will be reliant on learnings from earlier phases - and clearly risk transference (one of the major rationale of P3) isn't happening at their price in this case. The interpretation of IO/P3 is failing is only true if one isn't flexible enough to accept that there are exceptions.

AoD
 
I found the orthodoxy of P3 being automatically better somewhat questionable anyways - especially in the context of decadal projects that will be reliant on learnings from earlier phases - and clearly risk transference (one of the major rationale of P3) isn't happening in this case. The interpretation of IO/P3 is failing is only true if one isn't flexible enough to accept that there are exceptions.

AoD
With Christine Elliott in the cabinet (see end of that press release) do you see any flexibility forthcoming?
 

Back
Top