VIA Rail

[MisterF]

I want a Lamborghini for Christmas. Just because I am realistic about the prospects of getting one, doesn't mean that I don't like Lamborghinis and wouldn't be happy to get one.

You, on the other hand, think a fleet of Lamborghinis will solve every problem your hood has. And how dare anyone question the likelihood that we might not all get Lambos and that we'll still have traffic on main street if we all have Lambos.

This last paragraph is ridiculous and I've never claimed anything of the sort.

HSR isn't akin to getting a Lamborghini for Christmas. It's akin to buying a Lamborghini because you're rich and it can make you money (an imperfect analogy I admit). Canada is fabulously wealthy on the world scale and the studies have shown that HSR can be profitable here.

You've constantly criticized VIA's HFR plans as insufficient. I think it's our only shot of getting rail improvements in our life time. HSR is no good to me if it happens 30 years from now.

When have I criticized Via's plan as insufficient? Insufficient for what? I've stated that the benefits of HFR won't be as great as HSR (including Pearson relief) and that HFR should be the bare minimum of Corridor rail service. But those aren't criticisms of theplan; they're observations on the nature of the proposal. I'd be in favour of the Via plan or a true high speed network. My position has been consistent and clear.

Maybe try responding to what I posted, not what you think I posted.

 

[kEiThZ]

Maybe try responding to what I posted, not what you think I posted.

You should practice what you preach. Instead of repeatedly attempting to paint me as anti-rail.

 

[kEiThZ]

@crs1026

The transit mandate of the IB and how VIA fits in is the big mystery. Especially, now that the IB brings in more conventional investors.

The only way I can think of is that the IB and its investors own the corridor and charge VIA and GO to use it (latter for RER). Sort of the UK Network Rail model. This would also help for GO with Lakeshore East and West (Kingston and Hamilton approaches) where GO transfers ownership of track to the IB in exchange for electrification. Heck ML could trade maintenance for track access. And VIA gets a grant for rolling stock and rents track time from the IB.

Maybe we'll even see postal trains renting time!

 

[crs1026]

@crs1026

The transit mandate of the IB and how VIA fits in is the big mystery. Especially, now that the IB brings in more conventional investors.

Yeah, there are so many possible models. I suspect that no one is more mystified right now than the Bank itself, if it even exists in any real way so far. That's why it needs a core of advisors in place - its work is all ahead of today.

The British network model is attractive as a way of cuttling ML into rational chunks. It is becoming as monolithic as the old Ontario Hydro, and just as unaccountable.

Maybe we'll even see postal trains renting time!

For that matter, Amazon's enormous warehouse is practically in sight of the CN main line in Brampton. If the Pearson hub goes in, Fedex might want a spur, they are also just across the road.

- Paul

 

[dowlingm]

@crs1026The only way I can think of is that the IB and its investors own the corridor and charge VIA and GO to use it (latter for RER). Sort of the UK Network Rail model. This would also help for GO with Lakeshore East and West (Kingston and Hamilton approaches) where GO transfers ownership of track to the IB in exchange for electrification. Heck ML could trade maintenance for track access. And VIA gets a grant for rolling stock and rents track time from the IB.

Maybe we'll even see postal trains renting time!

Network Rail is ultimately owned by UK government and accountable to them rather than to investors. It is only a model in that NR does not run trains for its own account, but the above post could be read as an endorsement for an Investment Bank owned entity not necessarily (or at all) accountable to the Federal Minister of Transport.

The combination of Transport Canada regulation *and* social mandates to prioritize passenger rail in scenarios where other flows wish to use IB owned track at a higher return will be argued against by IB boosters as driving away investors.

What would be interesting, however, would be the removal of all VIA property and track ownership excluding maintenance yards into a Network Rail type public entity, headquartered in Ottawa (and thus closer to the Ministry, and creating some distance to VIA) instead of Montreal.

[Edit - a "Network Rail for Ontario" where Metrolinx and ONTC track ownership were merged into a provincial rail management agency might have some synergy, especially if it could rationalise the higher management levels. But that would require Metrolinx and ONTC, and their different sponsoring ministries, to agree.]

 

[steveintoronto]

[Edit - a "Network Rail for Ontario" where Metrolinx and ONTC track ownership were merged into a provincial rail management agency might have some synergy, especially if it could rationalise the higher management levels. But that would require Metrolinx and ONTC, and their different sponsoring ministries, to agree.]

Your entire post has excellent talking points, and of course, Crossrail isn't Network Rail, Crossrail is a stand-alone Corporation with run-through onto Network Rail lines, albeit upgraded to the highest standards by Crossrail.

Will continue discussing some of you points later, but here's the Globe article behind paywall, but available on Press Reader:
Pearson airport megahub is a strong candidate for Canada Infrastructure Bank, advisor says

• The Globe and Mail (BC Edition)
• 10 Apr 2017
• BILL CURRY

https://www.pressreader.com/canada/the-globe-and-mail-bc-edition/20170410/281517930980268

It clarifies some of our points of discussion.

 

[dowlingm]

Crossrail isn't Network Rail, Crossrail is a stand-alone Corporation with run-through onto Network Rail lines, albeit upgraded to the highest standards by Crossrail.

You have Crossrail on the brain at the moment, I think. Don't see how it is germane to this thread.

 

[steveintoronto]

You have Crossrail on the brain at the moment, I think. Don't see how it is germane to this thread.

Network Rail is only temporarily a guest of Her Majesty, due to the catastrophic business model failure of Railtrack. This is certainly not the model that the Investment Bank will be considering. Whether HM Government are still insisting on a total re-privatization (yet again) of Network Rail remains to be seen. The Crossrail model, however, is close to the Canada Investment Bank model, even with taxpayers at two levels of government being "shareholders".

Sorry if I mistook your line of reasoning as business logic. I thought, perhaps naively, that you were following on from Paul's comment:

The British network model is attractive as a way of cuttling ML into rational chunks. It is becoming as monolithic as the old Ontario Hydro, and just as unaccountable.

It clarifies some of our points of discussion.

Perhaps not...

 

[kEiThZ]

Network Rail is ultimately owned by UK government and accountable to them rather than to investors.

Absolutely. My point was that the IB may allow us a way to break the logjam that is track ownership in Canada without substantial capital investment on VIA's books. Heck, even helps Metrolinx out if done right.

Imagine a hypothetical "Ontario-Quebec Rails Group". OQRG is funded by the IB and buys out Lakeshore, Kitchener and Stouffville GO corridors and builds the new track to Ottawa in the East and London in the West. It then charges VIA and GO to run on it. You can now monetize those assets (rail corridors) and pay a return to investors. That's just one way to do it.

Alternatively, VIA creates a joint venture with the IB for the HFR corridor. But I'm thinking this would be less attractive since there'd be conflicts with ML/GO.

 

[Urban Sky]

[Edit - a "Network Rail for Ontario" where Metrolinx and ONTC track ownership were merged into a provincial rail management agency might have some synergy, especially if it could rationalise the higher management levels. But that would require Metrolinx and ONTC, and their different sponsoring ministries, to agree.]

Network Rail is a vertically separated rail infrastructure owner, not a "rail management agency", which would be rather be the "Office of the Rail Regulator", which organizes and oversees rail operations in the United Kingdom.

 

[crs1026]

Absolutely. My point was that the IB may allow us a way to break the logjam that is track ownership in Canada without substantial capital investment on VIA's books. Heck, even helps Metrolinx out if done right.

Imagine a hypothetical "Ontario-Quebec Rails Group". OQRG is funded by the IB and buys out Lakeshore, Kitchener and Stouffville GO corridors and builds the new track to Ottawa in the East and London in the West. It then charges VIA and GO to run on it. You can now monetize those assets (rail corridors) and pay a return to investors. That's just one way to do it.

This would be quite helpful to Ottawa - because, once the track owner is in place, VIA doesn't need to continue to exist as a government entity. One could license the routes to operators such as First, Virgin, or whoever. Or VIA, as a privatised company.

A key question is whether there would be enough revenue certainty that VIA, or whoever, would be a good credit risk to the track owner entity. We have discussed how VIA may or may not cover its above the rail cost. Certainly, GO isn't covering the whole shot from the farebox. Government will still have to offer a subsidy and inject it somewhere.

- Paul

 

[steveintoronto]

This would be quite helpful to Ottawa - because, once the track owner is in place, VIA doesn't need to continue to exist as a government entity. One could license the routes to operators such as First, Virgin, or whoever. Or VIA, as a privatised company.

Let's take that one step further, and skirted by D-S. The RoW would be "investor owned" (investor might and probably would include the taxpayer as shareholder), but the HFR trains 'owned by the government'. Ostensibly VIA would operate the service. As we are seeing with the REM-Bombardier situation, for better or worse, tie-ups and preferential treatment to overlapping companies certainly does happen, unless, of course, the 'corporation' is founded on openly contracting for rolling stock. Every 'shell' will be unique in that way, each with it's own terms and stipulations of incorporation. Since the "government" owns the Rolling Stock, and the agency holding VIA, it would behoove them to state at least "first in line" or "preferential option" in their corporate agreement. Perhaps not, but to not do so would be self-defeating in almost all circumstances.

We have discussed how VIA may or may not cover its above the rail cost.

"Cost" is the bug-a-boo of definition. To be arbitrary, D-S has claimed that HFR will show an operating surplus. How that is measured v. infrastructure cost and pay-down is the devil in the details, but at the end of the day...it can't be any worse, nowhere near as bad, as what VIA is now paying CN and CP. And perhaps for once, being a publicly accountable corporate shell, we can see the actual figures for track charges.

So, for the ex-O&Q RoW cum HFR, VIA gets first choice on slots, if by corporate agreement of the RoW owner, ML the second, and whoever else makes a legal and complying bid can also operate on it. It will be subject to the Railway Act as a common carrier, temporal safety regs also will allow (absent night passenger service) freight operations too. Since CP still have a good deal of the RoW at the southern end of the proposed HFR, it would behoove them to have first option or exclusive option (if legal) for freight. They might even be shareholders in the shell corporation, and sit on the board, quite likely in fact.

 

[kEiThZ]

A key question is whether there would be enough revenue certainty that VIA, or whoever, would be a good credit risk to the track owner entity. We have discussed how VIA may or may not cover its above the rail cost. Certainly, GO isn't covering the whole shot from the farebox. Government will still have to offer a subsidy and inject it somewhere.

VIA would likely be profitable on the corridor. HFR is marginally competitive with air till Ottawa and depending on pricing competitive with everything else till Montreal. Toss in a Western extension till London and they'll make bank.

GO is a more interesting case. In essence, Ontario would be paying the federal government. But there's still a business case if the payments are manageable and they outweigh the inbound capital investment. Maybe HFR runs hourly, but now GO is running half hourly trains to London on commuter service with more stops. The business case becomes even better if the IB gets ownership of the corridors and electrifies them. Now there's huge fuel and time savings.

 

[steveintoronto]

I'd missed this article at the Globe almost two weeks back. It has very pertinent information to REM and the nascent Infrastructure Bank:

Montreal LRT is first test for Ottawa’s private sector infrastructure plans
Bill Curry and Greg Keenan
OTTAWA and TORONTO — The Globe and Mail
Published Wednesday, Mar. 29, 2017 7:25PM EDT
Last updated Wednesday, Mar. 29, 2017 7:25PM EDT

A massive new light-rail project in Montreal is shaping up as Ottawa’s first test of its plan to raise billions from private investors, but Quebec is pushing for a federal commitment well before a new Canada Infrastructure Bank will be running.

This week’s Quebec budget revealed for the first time how a $6-billion proposal by Quebec’s pension fund, the Caisse de dépôt et placement du Québec, would be structured.

Known as the REM, the 67-kilometre-long light-rail line would connect downtown Montreal to several suburbs and the Trudeau international airport. Quebec wants construction to start this fall, with passenger service in place by the end of 2020.

The Caisse would put up $2.67-billion and assume the construction, operation and ridership risks for the project in exchange for an 8-per-cent return on its investment. If returns exceed that amount, dividends are then divided according to formulas that eventually lead to a distribution based on each party’s equity stake in the project, proposed as 51 per cent for the Caisse and 24.5 per cent each for Quebec and Ottawa. Quebec is proposing that each government put forward $1.3-billion. Ottawa has not formally agreed to fund the project but has made supportive comments about it in recent days.

“This falls right into the wheelhouse of the proposed role of the infrastructure bank,” said C.D. Howe Institute researcher Benjamin Dachis, who released a paper this week on options for the infrastructure bank.

“Now it’s a matter of whether this is a sort of thing that feeds into the bank or if it’s too soon for the bank to make a decision,” he said. “The thing is, this is the right idea … The Caisse is one of the major transportation infrastructure owners around the world.”
[...]

http://www.theglobeandmail.com/news...-sector-infrastructure-plans/article34482281/

Short on time to edit, and don't want to post in its entirety due to copyright respect, but I highly suggest accessing the link and reading the rest there. It's non-subscription. Same author(s) as the Pearson Hub piece discussed in the apt string at this site.

 

[Admiral Beez]

Good vid on why trains are so expensive vs. aircraft