vegeta_skyline
Senior Member
The press release does not say that
Your right the press release does not say that, but sometimes those with inside information have a little bit more information than press releases.
without owning the tracks/corridor, GO has been able to fulfill its mandate....lots of trains run along the lakeshore every day......each way........increasing to 30 minute frequencies....without owning the track!
Which will actually prove my next point.
I may not have exact figures for how much its cost per train, and even if I was aware of the exact figure I would not be disclosing in public. But I do know this; GO transit does not pay a ‘monthly rent’ for the authority to run trains on CN track. The cost is calculated by something called wheelage. GO trains pays CN a certain amount for every vehicle that runs on their tracks based on the distance they run. Meaning the more trains you run on a corridor the more its going to cost you in wheelage. It is one of GO transit biggest operating expenses and it cost more than the cost of maintaining the tracks themselves. The number of trains that will use the Weston sub in the future is going to increase by a factor of 4 and so will the wheelage cost.
Likewise for the Lakeshore corridor, once GO transit goes to 30 minute all-day service the wheelage costs will almost double.
Its like paying rent for life instead of buying the house outright. Oh and plus your rent increases as if you spend more time in the house. Does that really make any sense to you?
Also you obviously have no idea the behind the scene influence CN has on GO transit operations. Involving themselves in matters of little or no concern but making things unnecessarily difficult from the operations perspective.
In terms of price comparison, just compare this purchase and the length of track involved to the cost of any one of the TTC’s new Transit City lines.
The government of Ontario just dropped 9 billion into Transit city. Compared to that 160 million is chump change.
GO transit does not make this deal if they don’t recuperate the costs in the relative short term (meaning a couple decades). If service were to stay at the same levels it might not make sense but with service increasing it does. This was a deal that CN didn’t really want to make. This is the exact opposite of a subsidiary because CN is well aware that GO is going to increase service and they were perfectly content with retaining ownership because of the future increases in wheelage fees.
I believe that the only reasons they made this deal is
a)political pressure was placed on CN
and/or
b)because of the economy CN was looking for an infusion of cash.
When it come to cutting costs and raising capital CN does some weird things...
This is a company that removed the 2nd track on many of their main lines many years ago because they wanted to cut back on maintenance cost only to realize a few years latter when freight volumes went up that they needed that 2nd track because they were losing more money due to track congestion then it would of cost to keep and maintain the track. In the end they re-built the 2nd track in many areas at an even greater cost.
Clearly that’s genius at work.
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