Quote:
Originally Posted by Sir.Humphrey.Appleby
No reason why we couldn't do P3. But it is mug's game to say it saves money, it only creates certainty (which may save money). Paying a P3 partner, or paying off debt is no different.
Edmonton paid for the SLRT to Century Park by allocating the federal gas tax money directly to the line in their budget. For many years, the amount will not be there to pay for new capital, but will be paying the debt. No reason why we can't do the same. Just need to realize that no matter what we do we will have less money in the future. They don't have as much money to devote to new projects as we do because of their past actions. Marching ever forward, will hit the wall sometime. Whether we over leverage and build out the SE LRT and then have no expansion for 20 years, or take the measured approach and get to the same goal but a bit more sanely - I prefer the later.
To be honest, even trying the SE LRT before 2017 will stretch the city's fiscal capacity. Better to find another deserving project that fits within the budget envelop and increases regional capacity - debottlenecking the LRT in downtown by building a tunnel. No reason to build a truncated SE LRT that goes requires a long walk or bus ride at both ends.
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You raise some good points, however I'd be curious to get your take on 2 counter-points...
Paying a P3 partner, or paying off debt is no different. To this I would say, yes and no. From a financial perspective, there is little to no difference. If anything, a P3 partnership is more expensive over the long term than the City assuming the debt itself. However from a political perspective, there seems to be a huge difference. To me, people are a lot more willing to accept debt through P3 versus a level of government taking on that debt themselves. As you said, essentially a "mug's game" but it strikes me as one that needs to be played to ensure support from the general population. If I remember correctly, there is also a limit to the amount of total debt that the City of Calgary can assume. I believe that since the actual debt in a P3 is technically carried by the P3 partnership it would not be limited by these rules... perhaps someone else can clarify?
Whether we over leverage and build out the SE LRT and then have no expansion for 20 years, or take the measured approach and get to the same goal but a bit more sanely - I prefer the later.
From a purely transportation perspective, I agree. But from a transportation and planning perspective, I would have to disagree. To me, the City needs to do something to address urban sprawl. In the long run, sprawl will cost us more than any LRT project. If the goals set forth in Plan It Calgary are realized, the City will save itself $11.2 Billion in expenditures. For me, the LRT is the best catalyst to drive growth and investment in existing communities. If we put the tracks down now and then do nothing for 20 years, that's still 20 years where intensification in density can occur along the LRT network. That's 20 years of investment and building opportunities that are forever lost by delaying the project. People will be more willing to spend their money if the LRT is there, not because the LRT may or may not be there at some point in the future. So yes, in 20 years, we may be at the same spot from a transportation perspective, but from a planning perspective where will we be? That will be 20 additional years of sprawl, 20 years of lost opportunities for available private capital to fund inner city development opportunities. A combined SE/NC LRT will cost about $3.6 Billion to build now. But if by building it now, we are able to impact where growth occurs in the city, it will be 20 years of financial strain for a lifetime of financial gain. $3.6 Billion now to try and save $11.2 Billion down the road makes sense to me!
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