Ontario Line | ?m | ?s

[smably]

The result is certainly inflated prices; beyond any gouging involved, a key factor is risk-management; for private enterprise, exposing itself to bankruptcy-level risks is dangerous, and this requires padding bids with liberal contingencies that will, if the project is well run, simply be banked by the consortia. This doesn't occur at the nearly the same level with much smaller contracts in traditional procurement.

Even worse, as we saw with Eglinton, if costs exceed the contingencies baked into the "fixed-price" bid, the consortia will try to recover them by any means possible, usually from the public purse. In theory, P3s shift risk to the private sector, but in practice, these companies have armies of lawyers dedicated to ensuring that they won't have to eat any losses even in the worst case scenario. So really with P3s we're privatizing the profits, socializing the risks, and paying way more for the privilege. I've become convinced that they're a scam designed to line the pockets of private enterprise while letting the small-government types starve the public sector of the expertise they need to manage their own projects.

 

[Streety McCarface]

Even worse, as we saw with Eglinton, if costs exceed the contingencies baked into the "fixed-price" bid, the consortia will try to recover them by any means possible, usually from the public purse. In theory, P3s shift risk to the private sector, but in practice, these companies have armies of lawyers dedicated to ensuring that they won't have to eat any losses even in the worst case scenario. So really with P3s we're privatizing the profits, socializing the risks, and paying way more for the privilege. I've become convinced that they're a scam designed to line the pockets of private enterprise while letting the small-government types starve the public sector of the expertise they need to manage their own projects.

While definitely true, if we're being honest, it's not like public sector positions are the most productive. There's also the burden of specializations (for things like blast protection, high-risk fire protection, etc) that a city would never need the services of on a regular basis, but throughout the province, can sustain a small firm that has 2-3 engineers that can stamp drawings.

Its also worth noting that projects these days have blown up in scope and have become far, far more difficult to execute with a limited set of public sector knowledge. Even building one station you need so many specialists and with the limits in place that add time and resources to a project, there would never have been enough institutional knowledge at a public agency to properly execute things. It really sucks, and the only real way out of it is if the province creates its own standard engineering and contract administration services usable to all municipalities.

 

[Allandale25]

Some context on the dates in the IO market update in this posted by @Steve Munro

Infrastructure Ontario Procurement Update: November 2022

Infrastructure Ontario has issued an update on its various projects in procurement. I have been tracking the transit projects for some time, and the table linked below shows how they have evolved. …

stevemunro.ca

 

[superelevation]

While I'm a fan of westward expansion (and the two stations on King), he does have a point.

I would've used those funds to ensure the first phase went to Sheppard before worrying about extending it to the Exhibition.

The flaw in this reasoning is that it doesn't consider the logistics of actually building the tunnels and extending in the future.

The above proposed would mean any western extensions needs to begin with tunnelling in one of the densest areas of the city.
You also need a place to launch or extract the tunnel boring machine, which is all part of why exhibition makes a lot of sense. Queen and Spadina and King and Bathurst are both booming (800m walkshed remember) so getting to serve them is just a nice bonus alongside being able to move tunnelling works to the rail corridor.

That's also a huge deal because one of the big costs is removing muck - I'm pretty confident that they will do so on rail rather than the usual method of truck which is obviously a lot more expensive for bulk shipping!

 

[syn]

The flaw in this reasoning is that it doesn't consider the logistics of actually building the tunnels and extending in the future.

The above proposed would mean any western extensions needs to begin with tunnelling in one of the densest areas of the city.
You also need a place to launch or extract the tunnel boring machine, which is all part of why exhibition makes a lot of sense. Queen and Spadina and King and Bathurst are both booming (800m walkshed remember) so getting to serve them is just a nice bonus alongside being able to move tunnelling works to the rail corridor.

That's also a huge deal because one of the big costs is removing muck - I'm pretty confident that they will do so on rail rather than the usual method of truck which is obviously a lot more expensive for bulk shipping!

That's fair, however there will be a cost/inconvenience associated with downtown expansion at any point - unless it's believed this is the last downtown subway expansion that should be happening.

 

[AlxOptimism]

@Northern Light @smably
I really don't think it's so cut and dry with regards to P3's. There are pros and cons to the procurement model. I think the only reason the public purse got so screwed with regards to Eglinton is COVID, the first suit before the Pandemic was likely Metrolinx's fault and could've been avoided. That's not to say that P3's do not have increased costs in some ways.

All I know is that Edmonton is currently in a fiasco with its new LRT and the public purse there is currently enjoying the reduced risk of their P3 to the tune of a couple hundred million dollars. I'm sure they'll be a lawsuit but they have no standing.

 

[11th]

That's fair, however there will be a cost/inconvenience associated with downtown expansion at any point - unless it's believed this is the last downtown subway expansion that should be happening.

I guess it depends on your definition of downtown, if it's Bloor-Parliament-Lake Shore-Bathurst, then I'm afraid the sad reality is that this might be last one we'll see in a while.
With this extension people within that area will have at most a 15min walk away from a subway/train station; while not perfect, it's not terrible either, considering there are also mutiple streecar routes.

 

[afransen]

4) We're throwing in operations/maintenance. Sure, a worker for the consortium may ultimately be paid less, though that isn't a given and may be reflected in work quality; but there really isn't any savings for the government vs doing these
in-house, and in fact, there may be considerable added cost in light of the mark-ups involved. Let me give a simple example on lawn mowing. The City may have once paid someone a decent wage to do this in-house (I'm making a up a number here), lets say $28 per hour + benefits. A contractor comes in and pays minimum or just above with less/no benefits. So they are paying $17 per hour. But that's not what the City gets charged. The City pays $36 per hour or more.

I suspect there is a productivity factor here. The City may get charged $36 per hour but the work gets done in fewer hours.

 

[Northern Light]

I suspect there is a productivity factor here. The City may get charged $36 per hour but the work gets done in fewer hours.

I would love to provide a fulsome answer to this, and may privately, in time.

I will say, to my knowledge, it rarely works out this way, on a total-cost basis.

 

[TossYourJacket]

That's fair, however there will be a cost/inconvenience associated with downtown expansion at any point - unless it's believed this is the last downtown subway expansion that should be happening.

While true, it's much easier to launch/recover TBMs from within the rail corridor than doing it in the middle of Queen St West. So even if say the OL west section goes back into a tunnel and runs up Dufferin (which MX have said they have planned for as an option), it would be far less costly and disruptive than ripping up Queen St yet again would have been for the RL West Plan. Don't get me wrong, the OL is not perfect, but the RL was phenomenally short-sighted in many ways. Tbh, I doubt RL West would ever have been built.

 

[cplchanb]

guys dont forget that the original estimates were pre pandemic and inflation. This year alone has spiked all material costs by exponential amounts so the cost increase is expected.
it just goes to show the fetish for subway tunnels has reach affordable peaks

 

[afransen]

I would love to provide a fulsome answer to this, and may privately, in time.

I will say, to my knowledge, it rarely works out this way, on a total-cost basis.

Is it much different than the private sector? There are many (large) private orgs that don't employ their own maintenance and landscaping staff directly. If it was always better to employ directly, I'd suspect you'd see that, particularly in the private sector where the differential in unionization is less pronounced between large orgs and their contractors.

Where I see this being different is where there is sufficient scale and in-house management expertise to manage and maintain that capability. I see that in industry, where a facility may employ its own maintenance technicians to perform routine maintenance on equipment, etc. but may still farm out more complex or infrequent tasks to a service provider.

 

[afransen]

While true, it's much easier to launch/recover TBMs from within the rail corridor than doing it in the middle of Queen St West. So even if say the OL west section goes back into a tunnel and runs up Dufferin (which MX have said they have planned for as an option), it would be far less costly and disruptive than ripping up Queen St yet again would have been for the RL West Plan. Don't get me wrong, the OL is not perfect, but the RL was phenomenally short-sighted in many ways. Tbh, I doubt RL West would ever have been built.

It seems reasonably well planned to me. I know some here quibble with the engineering tradeoffs, but there don't seem to be many boneheaded design decisions that have been made.

 

[nfitz]

guys dont forget that the original estimates were pre pandemic and inflation. This year alone has spiked all material costs by exponential amounts so the cost increase is expected.

Indeed - if you look at the current Building Construction Price Index for Toronto, it's up 25.9% in the last year. Since 2017, it's up over 80% - which averages to about 12.5% a year.

Much higher than inflation.

Building construction price indexes, by type of building, inactive

Building construction price indexes (BCPI) by type of building. Quarterly data are available from the first quarter of 1982. The table presents data for the most recent reference period and the last four periods. The base period for the index is (2017=100).

www150.statcan.gc.ca

 

[Undead]

Much higher than inflation.

Yeah the magical figure which doesn't include food, energy or housing costs