Quote:
Originally Posted by outoftheice
I know I've mentioned it before, but I think that the question being posed in this thread is the wrong one. If Centre Street does become the preferred route for the NC LRT I think the question we need to be asking is "How can we build the NC LRT at the same time as the SE LRT?" I realize that with the infrastructure funding programs currently in place, the total cost of building the NC LRT and SE LRT is too much, however people always seem to over-look a P3 model to provide the financing. Some food for thought:
- Putting the NC LRT and SE LRT out to tender at the same time creates an opportunity for savings through economies of scale.
- If there has ever been a time to finance a project through the private sector, now is the time to do it. With interest rates the way they are, money is cheap and with the economy the way it is, those dollars will stretch further.
- While a P3 model will ultimately cost the city more than a traditional funding model, it also allows the shovels to be put in the ground much sooner than they ever would be otherwise. The NC and SE LRT have the power to transform the city by bringing re-investment and added densities to the communties that border the routes. If we are to believe the reports that accompanied the Plan It: Calgary document, continued urban spawl could potentially add $11 BILLION in additional costs to the City. The sooner the shovels go in the ground, the sooner the NC and SE LRT lines can begin to have an impact on where private development dollars are invested. If pursuing a P3 strategy moves up the construction timeline by 10 years or more, I have no doubt the additional costs a P3 model would bring would be more than offset by the savings in reducing Calgary's potential urban footprint.
- Ultimately, any construction financing will have to be sold to the public. There are numerous examples (the Calgary ring-road being one of the most notable) that show the public are much more receptive to a debt burden being added to a government through a P3 than through any other means. Saying "we're borrowing $6 billion to build a combined NC/SE LRT" will meet with resistance. Saying "We're spending a $6 billion funding grant on a combined NC/SE LRT" will meet with resistance. Saying "We've entered into a P3 agreement where we will see the NC/SE LRT open with-in 5 years and only then will we have to begin paying a couple hundred million dollars a year with the burden being shared with various levels of government" will probably be easiest to sell out of all the options.
- Building the NC/SE LRT all at once will provide a huge amount of relief off of the city's main artery (Deerfoot Trail). How much economic productivity is lost on an annual basis due to congrestion and grid-lock on this corridor?? Once again, if we can move up the construction timeline by 10 years, how much money can be saved due to recovered economic productivity??
And finally this: The biggest reason I find people give for not building the NC and SE LRTs at the same time is simply that the scale of the project is "too big for Calgary". Well the City of Toronto (more specifically Mayor Ford) has committed itself to spending $12 Billion to build a cross-town LRT line ($8 Billion) and a subway extension ($4 Billion). The subway extension will be financed using a P3 model and can serve as a model for the City of Calgary moving forward. While there is a lot of debate as to exactly what should be built for the money (subway versus LRT, etc....) the fact is that the public in Toronto has realized that rapid transit needs to be a priority and they are willing to spend $12 Billion to make that happen. Calgary has half the population of Toronto and a combined NC/SE LRT would probably carry about half the cost of Mayor Ford's transit plan. If they can make this work in Toronto, why can we not make it work in a city known for it's innovation and can-do spirit and just so happens to sit in one of Canada's wealthiest provinces that is also home to a large number of MPs with Canada's governing party??
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A P3, exactly like debt financing it ourselves except that we could probably get a better interest rate than the consortium, is still a long term liability to the city's finances. If we cannot afford, or are blocked by statue from attaining, six billion in debt then we cannot afford to pay someone else to take on that debt. With that 6 billion figure, we would be looking at payments in the neighbourhood of 425 million a year on a 30 year agreement just for a build contract if we couldn't pay for any of the initial construction costs. It would be even higher if we had a build/operate/maintain contract. I do not think the city can take on that kind of an annual liability at this time.
The thing is, Toronto is not spending 8 billion on the Eglinton line; Ontario is paying for it. Likewise, we need the support of a higher level of government for such a project. Hopefully, with the completion of the Ring Roads, Alberta will see the value in building out Calgary and Edmonton's primary transit networks. I simply can't see it being done without the province, if not the feds as well, on board.
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