Quote:
Originally Posted by Klazu
One thing I don't fully understand though is how can Port Mann Bridge be making so much in loss? I mean, if we assume that there are 100 000 crossings every single day and everyone pays at least $3 to cross, the bridge must be making way over $300 million a year. How that can then turn into a $100 million loss is mind-boggling, meaning that the operating and interest costs must be something like $400 million a year.
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Klazu, with all due respect, you are incorrect as well.
Off the bat, I again wish to re-iterate that typically BC highway/bridge projects have been funded out of general revenue... and in BC's case, out of MoTi's fiscal budget (with some fed funding these days). No tolls have ever been applicable.
To wit, just a couple of previous BC highway projects mentioned here on SSP... the 8-lane Pitt River Bridge on BC-7 as well as the $1 billion, 25 km Kicking Horse Pass portion of Hwy 1, east of Golden, in eastern BC. Again, in that vein, the original Alex Fraser Bridge along with the accompanying 91 Fwy. All were/are funded from annual fiscal MoTI budgets. No tolls. No "loss".
We also have the P-3 biz model, regarding some other projects, but not applicable to the PMB/ 1 Fwy upgrades.
In any event, the new PMB was not fully upgraded to a 10-lane cross-section, IIRC, until late 2014. And, of course, the latter period also witnessed numerous non-toll paying users move over to the Pattullo Bridge. Since May, 2016 that factoid has apparently considerably reversed.
And the PMB/Hwy 1 improvements were also placed within the BC crown corp. known as Transportation Investment Corp., which requires total capex/opex recapture... IOW no "subsidized" BC MoTI general revenue funding. A new BC concept, which I don't actually agree with as it requires a $3+ one-way toll. Again, a $1.50 one-way toll would be much more palatable to the driving public IMHO.
Now let's look at the last publicly released TIC financial statement, for the new PMB/1 Fwy upgrades, for the April 1, 2014 - March 31, 2015 fiscal year:
REVENUES
Tolling and related revenues $121,222,000
Other revenues $751,000
TOTAL REVENUE $121,973,000
DEPARTMENTAL OPERATING EXPENSE
Tolling and customer engagement $16,095,000
Highway operations and maintenance $9,670,000
Technical services $2,498,000
Finance and corporate services $4,571,000
TOTAL DEPARTMENTAL OPERATING EXPENSE $32,834,000
INCOME AFTER DEPARTMENTAL OPERATING EXPENSE $89,139,000
OTHER OPERATING EXPENSE
Borrowing costs $130,573,000
Depreciation and amortization $43,602,000
Doubtful accounts $1,218,000
TOTAL OPERATING EXPENSE $175,393,000
NET LOSS FROM OPERATIONS ($86,254,000)
Write down of assets $2,615,000
NET LOSS ($88,869,000)
http://www.ticorp.ca/wp-content/uploads/2016/02/2014-2015-Annual-Service-Plan-Report1.pdf
Of course, the foregoing is under GAAP accounting practices. In this instance, I personally prefer working capital/cash-flow based accounting. In that vein, remove the GAAP "paper losses" of Depreciation and Amortization in the amount of $43,602,000 as well as Write-down of Assets in the amount of $2,615,000, which leaves an actual working capital/cash-loss in the amount of $42,652,000 during the April 1, 2014 - March 31, 2015 fiscal year. Again, a loss? Sure with BC's new unconventional financing/tolling model, which is not followed by most, if any, other provincial jurisdictions in Canada.
Again, since then, weekday PMB traffic count has increased, for example:
May, 2014: 103,700
May, 2015: 108,500
May, 2016: 135,200
Quite a jump of 26,700 per weekday or 24.6% year-over year. And right here, we are talking about TIC fiscal years involving 2 fiscal years hence compared to the above 2014-2015 financials.
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