Time-Sensitive: Alberta Must Commit to Rail Proposals Now
There’s been lots of activity on the Alberta Passenger Rail File since we last communicated with you.
The Calgary Airport Rail Connection Study is well underway by the City of Calgary and scheduled to report recommendations by the Fall of 2024. The Government of Alberta announced the launch of a Passenger Rail Master Plan to prioritize the delivery of Passenger Rail Service across the Province. Devin Dreeshen, the Minister of Transportation and Economic Corridors, sent a letter to Mayor Gondek indicating two key conditions for the Province’s $1.53 billion funding of the Green Line. The first condition is no additional funding will be available from the Government of Alberta and second, the current provincial funding is contingent on the Green Line being fully integrated with the Province's recently announced Master Rail Plan.
On June 29th the Calgary Herald published an op-ed written by Liricon Capital’s Managing Partner, Jan Waterous (Calgary Airport – Banff Rail (CABR) lead proponent) which addresses the budgetary challenges of the Green Line, the Province’s desire for a Central Station in the Rivers District as part of its Master Rail Plan and CABR’s solution for a timely and cost-effective passenger rail service connecting Calgary’s Airport to Downtown.
The op-ed highlights the following critical points and solutions:
Private-Sector Delivery Model – Lower Cost, Lower Risk
A private-sector delivery model will reduce costs to taxpayers and transfer the development and operational risk to a public-private-partnership. CABR’s public-private-partnership will finance its $2.6 billion capital cost, 50 percent by Canada Infrastructure Bank (CIB) and 50 percent by the private sector, and not only assume development and construction risk but ongoing revenue and operational risk. Similarly, the central station could also be developed with risk capital from CIB, in stark contrast to the Government of Alberta stepping in to finance a station without any certainty of the future rail service to be provided. CABR, in the near term, can anchor the potential central station, providing critical integration with the adjacent private-sector owners and a clear line of sight to a real train service for the newly expanded BMO Centre and future Event Centre projects.
Timely Delivery of Passenger Rail
A private-sector delivery model will reduce development time — in CABR’s case, years ahead of any government-led project, since CABR already has eight years of studies and a detailed memorandum of understanding with CPKC Rail, in whose corridor the system would be built. With a targeted construction date of 2027 and completion in 2029, CABR can be built and operational before the Green Line’s expected in-service date beyond 2030. Without this certainty, there’s a real risk that the private-sector property owners will proceed with current development plans in the Rivers District, which will preclude a Central Rail Station. A near-term rail project connecting the airport to downtown and Banff with a stop in the Rivers District will also provide the expanded tourism market hotel developers need to advance projects adjacent to the newly expanded BMO Centre and the future Event Centre.
Cost Savings CABR Connecting to the Blue Line
A private-sector delivery model for the airport-to-downtown connection will increase available funding for the city to complete the Green Line. CABR has proposed to extend its service four kilometres east of the airport to replace the city’s planned Airport Transit Line — which would connect the Blue Line to the airport — saving the city $750 million, which could be reallocated to the Green Line.
Time Sensitivity for a Private Sector Delivery Model
Should this private sector delivery model be of interest to the province, the urgency to advance the Green Line, secure the central station site and lock up CIB funding will require that the private-sector rail proposals be evaluated in parallel with the Master Rail Plan. CIB will not survive if the Conservatives win the federal election next year. To secure that funding, the province must advance a project development agreement by fall 2024 or CABR will be terminated. This still preserves the province’s flexibility on delivery models to reach a final investment decision at a later date.
Concluding Remarks
We are at a critical juncture with consultants about to be engaged to deliver the Master Rail Plan in the Summer of 2025, the Calgary Airport Rail Connection Study set to report its findings this fall and the CIB funding window set to expire in June 2025. CABR proponents are urging the Government of Alberta to initiate a thorough professional review of the Passenger Rail Unsolicited Proposals of which CABR is one. We are urging the Government of Alberta when doing its Rail Master Plan to look closely at commercial viability, cost containment and the risk mitigation opportunities associated with CABR’s private sector delivery model. In doing so a private sector delivery solution can be equally considered concurrent with the development of the Rail Master Plan.
Bruce Graham
Executive Director
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via email
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