VIA Rail

[kEiThZ]

Brief HFR mention here.

Infrastructure bank to unveil plans to invest billions in priority areas

Among the priority areas are agricultural infrastructure in Western Canada and broadband to expand access to high-speed internet service

financialpost.com

They announced $10B in infrastructure spending today. No mention of HFR.

And that FP article labeled it "high speed rail". This is exactly what I'm talking about. They are going to have PR issues when the public thinks they paid $5 billion for a not very fast train.

 

[Allandale25]

^ Sorry, I meant to point out that the article made a mistake. They should have said HFR instead of HSR because the $55 million was definitely for the HFR study. So there was a reference to HFR it's just that the reporter made a typo.

 

[Darwinkgo]

But this is exactly the market that YDS was claiming HFR was positioned to tackle. Maybe the fares will be really cheap.....

The way I look at it, this is an optimization problem between capital cost and ridership. Highest ridership with HSR. Lowest capital cost with some Lakeshore upgrades. The optimum is somewhere in the middle. The current proposal seems the bare minimum to make the Havelock route serviceable. But the optimum is probably at some higher investment point. The concern I (and some others) have is that government is driving to the cheapest proposal rather than letting VIA and the JPO drive to the optimum solution.

If the business case finds the optimum at higher spending, it will be higher.
In Alberta where the CIB was brought in by a private proponent for a train to the mountains from downtown Calgary, the CIB scoped IN service from downtown to the international airport for the study.
I have full faith they’ll optimize for minimum subsidy/no subsidy/profit maximization. That is their mandate!
I know it is very weird compared to what we are used to with government projects - a drive to meet a certain capital cost, and scoping up or down to target based on the cash available. But that is not the objective here. Heck the study might (a very slim might) state that HSR is the profit maximizing, subsidy minimizing preference.

 

[kEiThZ]

If the business case finds the optimum at higher spending, it will be higher.
In Alberta where the CIB was brought in by a private proponent for a train to the mountains from downtown Calgary, the CIB scoped IN service from downtown to the international airport for the study.
I have full faith they’ll optimize for minimum subsidy/no subsidy/profit maximization. That is their mandate!
I know it is very weird compared to what we are used to with government projects - a drive to meet a certain capital cost, and scoping up or down to target based on the cash available. But that is not the objective here. Heck the study might (a very slim might) state that HSR is the profit maximizing, subsidy minimizing preference.

I hope this is the case. But costs involved are very different. Adding in a station along an existing corridor is a whole lot different than billions in additional investment to upgrade a line substantially because the business case looks better.

 

[Urban Sky]

Before I finally get to Part 3 of my modelling travel times for the Havelock alignment exercise (hopefully tomorrow!), just a few quick replies:

Ultimately, the discussion that we're having. And some of the pessimism is a result of the lack of information. I get that VIA is in a delicate spot with commercially sensitive information and its obligations to government. Wish they would provide more info on their thought process at least on HFR. Just think of what the discussion here would be if you weren't around.

I don't think anyone knows (I certainly don't know!) who is going to fund the project and what his budget and priorities will be. Therefore, specifying any details like exact alignments, electrification or target travel times would just needlessly reduce the potential overlap with said investors budget or priorities. I would therefore treat everything you've heard from VIA - from cost estimates to average travel speeds - as the minimum project scope at which it still makes economically and commercially sense to pursue HFR.

My point is, the purpose of those numbers is to demonstrate sound judgement and generate confidence, not to arrive at a scientific projection of future dividend payments. If those formulae and methods were how Ottawa sets policy, they would be in a big manual on line somewhere, and every initiative proposed by Crown agencies would use them, and nothing would squeak through without equal fiscal merit. That isn’t so. We have VIA being forced through a boot camp obstacle course that would make USMC recruits quiver, while in the next lane, government executes other procurements using other criteria (or none at all, as we saw with WE) and with much more straightforward funding processes. I am criticising Ottawa, not VIA, who are undoubtedly being held to ridiculously strict decision rules.

I have to admit that I haven't seen many passenger rail projects being approved in this country since I first set foot onto your soil on Boxing Day 2009 and even though BCRs and IRRs evidently played zero consideration (at least from a taxpayer perspective!) in the one large project I witnessed in my home city of choice, this is how large-scale infrastructure projects are usually assessed and how the decision to approve and fund them with taxpayer-money is justified in every other democratic country - and it tends to also be the mechanism with which private investors make their investment decisions. Therefore, if you harvest the low-hanging fruits already before you have your whole project approved and funded, you reduce the remaining projects' benefits by much more than its costs, thus worsening both indicators and thus your project's attractiveness to investors. Similarly, if you inflate the scope of HFR to get closer to HSR, you will make it much less likely that HFR will ever be succeeded by HSR. Therefore, I believe that the cost and travel time estimates we are debating here represent a careful balance, but one would be foolish to not give in to a potential investor's insistence to increase the scope - one would just need to make sure that the extra improvements boost rather than reduce the BCR and IRR of HSR...

I was looking at old reports yesterday. I looked at the Ecotrain study with 200 kph diesel trains and a Lakeshore route till Kingston.

Toronto-Ottawa: 2:25
Ottawa-Montreal: 1:11
Toronto-Montreal: 3:38

That was of course for HSR with 200 kph diesel. But if we roughly correct for 177 kph diesel service by adjusting those times by 15%, we get:

Toronto-Ottawa: 2:47
Ottawa-Montreal: 1:22
Toronto-Montreal: 4:11

This basically exactly in line what I was suggesting HFR should aim for and be funded towards.

The Ecotrain study prices Toronto-Ottawa-Montreal at $9.067B in 2009 dollars. Probably closer to $12B today. That goes to show how expensive HSR is, as grade separation piles on the costs. But the ~ $2.2B rumoured for TOM under HFR also shows how much room there is for investment. Personally, I think $1-2B more to get Toronto-Montreal under 4.5 hrs would be entirely justified. Would probably create more robust infrastructure too.

The key thing your figures show is that once you leave existing right-of-ways, it doesn't really matter what your design speed is. If you look at the per-km cost of the Ecotrain study, building the Quebec-Montreal-Toronto Corridor for a design speed of 300 km/h only costs 12.2% more than for 200 km/h ($22.0 vs. $19.3 million per km) and once you substract the costs for electrification (the 200 km/h scenario was fuel-operated), the cost premium decreases to only 3.8% ($20.1 vs. $19.3 million per km):

Compiled from: Ecotrain Study (2011, deliverable 6 - Part 1 of 2)

Therefore, leaving the existing/former ROW except for where it is unavoidable only makes sense if you can go to true HSR (150-200 mph / 240-320 km/h) and that means ploughing an entirely greenfield ROW through difficult and sensitive terrain if you stay anywhere close to the Havelock Subdivision east of its name-giving community...

 

[kEiThZ]

Therefore, going beyond 110 mph only makes sense if you can go to true HSR (150-200 mph / 240-320 km/h)

Would you need to go beyond 110 mph?

Seems to me that the major challenges with the current HFR routing isn't max speed, but portions that prevent it from running closer to max speed, depressing the overall average speed to ~123 kph (77 mph) for Toronto-Ottawa. In theory, if running at a constant 100 mph, Toronto-Ottawa is a 2.5 hr trip. In reality, that would be 3.5 hrs because of speed restrictions along shared freight and suburban passenger rail lines. And track geometry outside the GTA. This is a problem that money can fix, without building fully grade separated HSR.

 

[Urban Sky]

Would you need to go beyond 110 mph?

Seems to me that the major challenges with the current HFR routing isn't max speed, but portions that prevent it from running closer to max speed, depressing the overall average speed to ~123 kph (77 mph) for Toronto-Ottawa. In theory, if running at a constant 100 mph, Toronto-Ottawa is a 2.5 hr trip. In reality, that would be 3.5 hrs because of speed restrictions along shared freight and suburban passenger rail lines. And track geometry outside the GTA. This is a problem that money can fix, without building fully grade separated HSR.

Sorry, I meant “leaving the existing/former ROW except for where it is unavoidable”... (I corrected it)

 

[roger1818]

But this is exactly the market that YDS was claiming HFR was positioned to tackle. Maybe the fares will be really cheap.....

The way I look at it, this is an optimization problem between capital cost and ridership. Highest ridership with HSR. Lowest capital cost with some Lakeshore upgrades. The optimum is somewhere in the middle. The current proposal seems the bare minimum to make the Havelock route serviceable. But the optimum is probably at some higher investment point. The concern I (and some others) have is that government is driving to the cheapest proposal rather than letting VIA and the JPO drive to the optimum solution.

I am curious where you got the idea that YDS was claiming that HFR was positioned to tackle trips by couples and families? From what I have read, he is only talking about being competitive with driving in general, and there are many people who drive alone. The main competitive advantage driving has is flexibility; you can leave whenever you want. By having frequent train departures, it helps reduce that advantage driving has and making the train more reliable gives it an advantage over driving. The main advantage of the train though, is that you get more "productive" time to work or relax.

Flying will always be the fastest option for "longer" distances (even the fastest, 300km/h EcoTrain option had Toronto-Quebec listed at over 4 hours where as a direct flight is only 1½ hours). For families who already have access to a car, driving is going to be the cheapest option. For couples, by the time you consider the cost of gas, parking and maintenance, it will be much closer. Driving might be cheaper and door to door travel times might be similar, but the more relaxing experience of taking the train is worth something. For that same reason, even some families might choose the train (even if it is more expensive and not significantly faster) because of the better overall experience, if they can make the train schedule match their vacation schedule (something that can be difficult with the current schedule).

For the families that choose to drive, that's okay, since a "full" car is a relatively efficient mode of transport. VIA is trying to improve its market share, not gain 100% of it.

 

[SFO-YYZ]

They announced $10B in infrastructure spending today. No mention of HFR.

And that FP article labeled it "high speed rail". This is exactly what I'm talking about. They are going to have PR issues when the public thinks they paid $5 billion for a not very fast train.

You are jumping the gun here. It's just a general infrastructure spending announcement - it's very common for them to keep their verbiage high level at this point. Specifically, the article mentioned the following:

Government officials say no investments in specific projects are to be announced at a news conference Thursday, where Trudeau is to be joined by the new chair of the bank’s board, Michael Sabia, and Infrastructure Minister Catherine McKenna.

 

[crs1026]

Therefore, if you harvest the low-hanging fruits already before you have your whole project approved and funded, you reduce the remaining projects' benefits by much more than its costs, thus worsening both indicators and thus your project's attractiveness to investors. Similarly, if you inflate the scope of HFR to get closer to HSR, you will make it much less likely that HFR will ever be succeeded by HSR. Therefore, I believe that the cost and travel time estimates we are debating here represent a careful balance, but one would be foolish to not give in to a potential investor's insistence to increase the scope - one would just need to make sure that the extra improvements boost rather than reduce the BCR and IRR of HSR...

In a broad way, VIA's strategy is, let us demonstrate what we can do on the Ottawa line and leverage from that credibility to propose better things in some future decade. Given government attitudes, I can't fault that strategy. I'm sure the BCR is being prepared to create the best possible outcome from the Ottawa line towards that objective.

It's fairly easy to accept (notwithstanding our angst over curves and trip time) that the Toronto-Ottawa segment will be fast enough to go beyond the "low hanging fruit" of non-driving students and seniors for whom trip time is less critical, and into the more demanding market of business travellers and those for whom travel is time sensitive.

It's harder to believe that VIA is able to harvest anything more than the low-hanging fruit from the Toronto-Montreal market, ie only attracting the least time sensitive customers, and foregoing whatever customers who might only buy a train ticket if there were a more direct, faster route. It's a challenge to believe that the Havelock route could ever be upgraded enough to plumb the latter market to an aggressive degree.

The problem is that the most probable strategies for generating a BCR for direct Montreal-Toronto service requires intrusion into freight railways' "private" affairs. That is clearly a non-starter under current government policy, but it is really not that sacred an issue IMHO.

It's just a perverse thing of VIA's strategy that in order to win at all, Via must preclude winning between the most populous city pairs that represent a huge source of growth.

Would Toyota adopt a business strategy that precluded selling Lexus, in order to sell more Corollas? Maybe, if the BCR pointed in that direction. The difference is that VIA is the executor of transportation policy first, and only a business second. The more HFR takes its business strategy in this direction, the worse the result will be as an infrastructure strategy.

Hopefully VIA will share more informed and expert analysis of its markets in due course. We amateurs can only speculate. The thing to watch is, what are they saying about the Montreal-Toronto market, and why is connecting the two largest cities in Central Canada only a secondary consideration?

- Paul

 

[kEiThZ]

I am curious where you got the idea that YDS was claiming that HFR was positioned to tackle trips by couples and families?

From all his interviews. He's been explicit they HSR is not good for the middle class and that he wants to build a service that everybody can use. Nowhere did he say, "I want to build a service only competitive with single occupant driving."

From what I have read, he is only talking about being competitive with driving in general, and there are many people who drive alone.

Very much debatable that the bulk of long haul travel is alone. 200 km Ottawa-Montreal or Montreal-Quebec? Sure. 400 km Toronto-Ottawa or 500 km Toronto-Ottawa-Montreal? Less likely.

 

[Bordercollie]

From all his interviews. He's been explicit they HSR is not good for the middle class and that he wants to build a service that everybody can use. Nowhere did he say, "I want to build a service only competitive with single occupant driving."

Very much debatable that the bulk of long haul travel is alone. 200 km Ottawa-Montreal or Montreal-Quebec? Sure. 400 km Toronto-Ottawa or 500 km Toronto-Ottawa-Montreal? Less likely.

Even in the 400KM distance, flying doesn't always work out. 30 Minutes to the Airport, walking from the parking lot to the terminal, checking in, and arriving 90 minutes before departure, time from landing. Then from the airport you need to rent a car to get to downtown or wherever you are going.

So if you take all that into consideration and weather delays it might be about the same. Comes down to which is more convenient and consistent.

 

[kEiThZ]

The problem is that the most probable strategies for generating a BCR for direct Montreal-Toronto service requires intrusion into freight railways' "private" affairs. That is clearly a non-starter under current government policy, but it is really not that sacred an issue IMHO.

It's just a perverse thing of VIA's strategy that in order to win at all, Via must preclude winning between the most populous city pairs that represent a huge source of growth.

Would Toyota adopt a business strategy that precluded selling Lexus, in order to sell more Corollas? Maybe, if the BCR pointed in that direction. The difference is that VIA is the executor of transportation policy first, and only a business second. The more HFR takes its business strategy in this direction, the worse the result will be as an infrastructure strategy.

Hopefully VIA will share more informed and expert analysis of its markets in due course. We amateurs can only speculate. The thing to watch is, what are they saying about the Montreal-Toronto market, and why is connecting the two largest cities in Central Canada only a secondary consideration?

Part of the problem here is the CIB. I used to be super enthusiastic about them and a huge defender. But now I'm less clear on their role. Are they there to make this project commercially viable or to bring it to fruition? What happens if the BCR is positive but it's not financially profitable on a commercial basis? Are they guided by a minimum BCR (as governments traditionally are) or maximizing BCR with additional capital investment if necessary?

The example was given of Calgary where they sprang for an extra station. But that's tens of millions more. Not hundreds of millions or even billions more.

The lack of transparency is bothersome. Especially given that this idea has been getting circulated for the better part of a decade now. And I don't think any of us can say confidently that the CIB will provide any info but the final decision in 6 months.

 

[kEiThZ]

Even in the 400KM distance, flying doesn't always work out. 30 Minutes to the Airport, walking from the parking lot to the terminal, checking in, and arriving 90 minutes before departure, time from landing. Then from the airport you need to rent a car to get to downtown or wherever you are going.

So if you take all that into consideration and weather delays it might be about the same. Comes down to which is more convenient and consistent.

This was discussed two pages back. I wish people would read back before getting into another rehashed discussion.

 

[roger1818]

This was discussed two pages back. I wish people would read back before getting into another rehashed discussion.

To be fair, this thread has 496 pages and lately it has been tending to accumulate several pages a day, making it tough to go back more than a couple days. That is one of the reasons (its Toronto centric nature was another) I was hesitant to join this forum (I have been a regular on other forums for years). The fact that Urban Sky is a regular here is what eventually enticed me. I do understand the frustration though.