VIA Rail network developments

[lrt's friend]

We need to hit as many significant locations in SW Ontario as possible. In my opinion, to maximize ridership, there needs to be stations in Guelph and Stratford. Stratford is a major tourist destination in summer anyways. Rail stations also must become multi-modal stations so that it is easy to access rail service from anywhere in each city. Where rail service currently exists in smaller communities but will be bypassed, VIA (or another public operator) should operate bus service to connect to the closest HSR station, for example, St. Mary's and New Hamburg. The alternative is to operate some 'local' trains but I am not sure if demand will be sufficient when all the major centres receive high speed service.

I question whether this will be true high speed trains or maybe the type of rapid trains proposed on the Toronto-Ottawa-Montreal route.

The model used in Europe has intercity trains sharing the track with local trains with only local trains stopping in smaller communities. Is this an option here? This may require additional track in certain locations to accommodate local trains.

[YOWetal]

Originally Posted by roger1818

A Southern bypass? Seems to require either a lot of new ROW or a significant detour since Guelph is in the way. For fun I created a rough map showing the existing VIA routes and potential bypasses (rough guesstimates on my part).

Southern Ontario HSR Map



I don't think the cost would be terrably expensive compared to all the land required to build a detour. Granted there will be NIMBYs, but in reality it would an improvement over the current situation for those near the tracks (no more level crossings and less noise).



True, but in time the trench could be capped to effectively turn it into a tunnel (especially if the line is electrified to reduce the need for ventilation).

It should be way cheaper to expropriate farmland than build a tunnel. An Ottawa to Toronto train through the north could be even cheaper as it is mostly scrub land.

[Truenorth00]

Originally Posted by acottawa

Ok, we can use your numbers.

A 5% return on $4B is $200 million per year. That means before Via can pay a cent to workers, maintenance, energy, utilities or toilet paper they have to give the pension plans $200M.

The Toronto-Ottawa-Montreal corridor current attracts 2.1 million pax/year (from the 2015 Via Annual Report). If HFR leads to a 100% increase in passengers, each ticket would have an average payment to the pension plan of $47.51, so without paying for the train, it is already more expensive to pay the pension plan than it is to take the bus, buy gas, or even take Via's current service if you book in advance. Even if you assume all of the HFR efficiencies lead to a 50% reduction in cost (from $107 to $53) - which is a huge assumption- you're looking at an average ticket price of $100, which is not going to lure people off the bus (which was your original assertion that started this conversation). As I said earlier, a train service can have cheap tickets, it can have high capital costs, it can have significant private sector funding, but it can't have all of the above.

I think Via is trying to follow the UPX playbook. Step 1) Distract politicians and the public with talk of big private sector funding. Step 2) When the private sector funding falls through (because the numbers don't add up) assure politicians it will "pay for itself" based on fanciful revenue expectations. Step 3) Act "surprised" that the high ticket prices in the projections did not lead to high interest from passengers. Step 4) Force the government decide between permanent subsidies and a white elephant and hope they will choose the former.

I thinks it's rather challenging to pull the UPX thing again for two big reasons.
First, institutional investors can see past —. And their due diligence is a lot tougher than any government agency might consider. Moreover, they've got tons of experience doing P3s in all sorts of formats, all over the world. There's no way VIA can pull the wool over their eyes. Second, the infrastructure bank is not going to let through a hallmark project that makes them look utterly incompetent. Nothing will get the bank shut down faster than a massive multi-billion dollar project with every politician taking a photo holding a shovel, failing miserably.

As for the numbers, I will say this, there's a lot of variable to look at here. First, the project costs has so many variables. The biggest one being $2 billion for electrification. Eliminate that and costs go up but all of a sudden, the investors may have to put in only $2 billion, not $4 billion. Next, is government funding. One of the theories for why government would subsidize the project is because they are subsidizing VIA anyway. They have to pay $1.5 billion to recapitalize the fleet as its due. And they have to pay $200 million per year to keep Corridor services going. So they idea is to pay x number of years of subsidies up front and the $1.5 billion for recap and use that leverage private investment to get VIA's Corridor services off subsidies forever. The business case to make that work depends on how many years of subsidies the government would have to pay up front and how much the institutional investors will shoulder and want in returns.

As for ticket prices, the way I understood it is that they can achieve higher average ticket prices while still offering plenty of lower fares. For example, have $150 walk up fares, but offer $50 fares if booked in advance. When you look at a route like Toronto-Ottawa, they'll be able to make bank because they'll be stealing share from the airlines. And a lot of Corridor air traffic is short-booking business traffic.

In any event, like I said earlier, we'll have to wait for more details about the business case to come out. I am optimistic. But I'll withhold final judgement till we know more. I don't think VIA would be pitching this publicly if they weren't already talking to institutional investors behind closed doors about it. Also, I'd argue that Desjardins-Siciliano has put his credibility on the line. If the pitch falls through, he'll be out of there. The guy has tons of experience. I doubt he'll stay if this falls through. And I actually doubt he would have pitched it if he didn't think the plan was feasible. Keep in mind they started pitching this under the previous government, with no infra bank.

[Truenorth00]

Originally Posted by HighwayStar

So let me understand this... a healthy chunk of the VIA revenue from the tickets purchased by Joe Public will go to (at above market rates) to Teachers pensions (thanks for the calculations acottawa!).

If the average citizens don't by enough tickets... then the revenue will certainly made up by Federal Taxpayers...

Anybody else see anything wrong with this model??

Originally Posted by HighwayStar

At above market... and government guaranteed.. rates.

Wow... how do I invest in the "infrastructure bank" ????!!!!! What a freakin shell game

All happening because Canadians refuse to accept debt and deficits to build infrastructure. And I don't see anything wrong with it. We shouldn't build infrastructure because somebody, somewhere might profit? What kind of nonsense is that? Why should we shoot ourselves in the foot because somebody might profit on a project?

Canadians have utterly failed at investing infrastructure at rates necessary to keep the economy competitive. So if voters aren't going to let governments do what is necessary, then let the private sector have a crack at it.

People love to complain. Especially about the private sector. Ask them if they'd support the tax increases necessary to build all this infrastructure. The government is proposing to put in $35 billion into the bank to build $105 billion worth of infrastructure over 10 years. The alternative would be the public supporting an extra $7 billion in re-allocation or taxes to pay the same level of delivery. I don't see Canadians being all that interested in additional $7 billion in government spending. At least here, the infrastructure gets built and it's users shouldering more of the costs.

[Truenorth00]

Originally Posted by lrt's friend

We need to hit as many significant locations in SW Ontario as possible. In my opinion, to maximize ridership, there needs to be stations in Guelph and Stratford. Stratford is a major tourist destination in summer anyways. Rail stations also must become multi-modal stations so that it is easy to access rail service from anywhere in each city. Where rail service currently exists in smaller communities but will be bypassed, VIA (or another public operator) should operate bus service to connect to the closest HSR station, for example, St. Mary's and New Hamburg. The alternative is to operate some 'local' trains but I am not sure if demand will be sufficient when all the major centres receive high speed service.

I question whether this will be true high speed trains or maybe the type of rapid trains proposed on the Toronto-Ottawa-Montreal route.

The model used in Europe has intercity trains sharing the track with local trains with only local trains stopping in smaller communities. Is this an option here? This may require additional track in certain locations to accommodate local trains.

I agree with this. I don't think they need as many stations as VIA today. But they need to hit Stratford. They proposed running another service from London to Kitchener over the Northern Mainline. I thought that was strange. Why not add 15 km of track and a stop in Stratford and be done with it? The towns themselves could then provide shuttle service to Stratford.

As for sharing. I don't think that's feasible here. To start with, they are already sharing till Kitchener. Beyond that, there's no real market to have additional local trains. Especially on the North Mainline. If they were along the Southern Mainline sure. But there's nothing other Stratford in the North.

[acottawa]

Originally Posted by Truenorth00

All happening because Canadians refuse to accept debt and deficits to build infrastructure. And I don't see anything wrong with it. We shouldn't build infrastructure because somebody, somewhere might profit? What kind of nonsense is that? Why should we shoot ourselves in the foot because somebody might profit on a project?

Canadians have utterly failed at investing infrastructure at rates necessary to keep the economy competitive. So if voters aren't going to let governments do what is necessary, then let the private sector have a crack at it.

I don't recall a government ever get voted out of office for building too much infrastructure. Politicians the world over are always tripping over themselves to cut ribbons on new projects.

The federal government is planning to spend $186B on infrastructure over the next 12 years. There is no particular reason why they couldn't spend $4B (about 2% of the total) to build a new railway.

I think all of these gimmicks actually slow down the delivery of infrastructure because it creates extra layers of complication. Instead of getting money from the Government, via the bond market, Via has to borrow from another crown corporation at above market rates and a third crown corporation has to broker the deal. It creates a lot of job for bureaucrats, lawyers, and lobbyists, but few jobs for people with hard hats.

If Mr. Desjardins-Siciliano had just told the government: "hardly any railway in the world makes money or can pay for its own infrastructure out of the fare box, but a $4B investment would have the following benefits..." then I think the chances of getting built would be higher. But by pretending he can pay capital out of fares (which as per my earlier post I think is impossible, no matter how you fiddle the numbers) or pretending it will break even on operating (which hardly any railway does) or pretending fares will be so low it will get people off the bus (again numbers don't add up), or pretending a loan from a crown corporation is "private sector investment" I think the whole plan loses credibility and is less likely to get built.

[roger1818]

Originally Posted by lrt's friend

We need to hit as many significant locations in SW Ontario as possible. In my opinion, to maximize ridership, there needs to be stations in Guelph and Stratford. Stratford is a major tourist destination in summer anyways. Rail stations also must become multi-modal stations so that it is easy to access rail service from anywhere in each city. Where rail service currently exists in smaller communities but will be bypassed, VIA (or another public operator) should operate bus service to connect to the closest HSR station, for example, St. Mary's and New Hamburg. The alternative is to operate some 'local' trains but I am not sure if demand will be sufficient when all the major centres receive high speed service.

It would be easy have GO trains extend from Kitchener to Stratford (at least seasonally). Including the detour to Stratford on HRS would add significant delays, not only because of the longer route, but because of having to slow down through both Stratford and St. Marys. A detour around Guelph would save less as it would make the route longer (though the trains could travel faster).

Originally Posted by YOWetal

It should be way cheaper to expropriate farmland than build a tunnel.

From what I gather, a tunnel isn't in the proposal, only a trench (just deep enough for roads to have overpasses build over the tracks). This would be much cheaper than a full tunnel. Later, parts of the track could be capped to reclaim some land and improve connectivity mid block.

Also, expropriation is only part of the cost. The land needs to be graded and prepped to ensure there is enough drainage and support. You don't want the tracks to flood, sink in the mud or be washed out during a storm, nor do you want it to be a roller-coaster.

An Ottawa to Toronto train through the north could be even cheaper as it is mostly scrub land.

For Ottawa Toronto, VIA is considering repatriating the old Ontario and Quebec Railway line from Perth to Peterborough (and on to Toronto). Some of it is part of the Trans Canada Trail though.

[phil235]

Originally Posted by YOWetal

It should be way cheaper to expropriate farmland than build a tunnel. An Ottawa to Toronto train through the north could be even cheaper as it is mostly scrub land.

I would agree. There is a reference to expropriating 50- houses in Guelph for the trench, and there would undoubtedly be relocation of services, overpass structures etc.

[phil235]

Originally Posted by Truenorth00

I agree with this. I don't think they need as many stations as VIA today. But they need to hit Stratford. They proposed running another service from London to Kitchener over the Northern Mainline. I thought that was strange. Why not add 15 km of track and a stop in Stratford and be done with it? The towns themselves could then provide shuttle service to Stratford.

As for sharing. I don't think that's feasible here. To start with, they are already sharing till Kitchener. Beyond that, there's no real market to have additional local trains. Especially on the North Mainline. If they were along the Southern Mainline sure. But there's nothing other Stratford in the North.

If Stratford got a station, it would be by far the smallest destination on the proposed line. While it is a tourist destination for 4-5 months per year, it only has about 30,000, which is 1/5 the size of the next smallest stop (Guelph). In terms of ridership, I'm not sure, but iit may not warrant the extra costs of putting a station in town, or the delay an extra stop would cost riders from London and points west.

[roger1818]

Originally Posted by Truenorth00

When you look at a route like Toronto-Ottawa, they'll be able to make bank because they'll be stealing share from the airlines.

Originally Posted by acottawa

pretending fares will be so low it will get people off the bus

Mr. Desjardins-Siciliano's plan isn't to compete with the airlines or buses (their market shares, even when combined, are too small). Instead he is looking at the big market (the remaining 90%), those who drive. To do that, you need to look at why people drive and compete at that level. You can't take over all of the market, but even if the can steal 10% of it, they have gained more passengers than either the airlines or bus companies have to take.

[Kitchissippi]

Originally Posted by roger1818

For Ottawa Toronto, VIA is considering repatriating the old Ontario and Quebec Railway line from Perth to Peterborough (and on to Toronto). Some of it is part of the Trans Canada Trail though.

I've been on that stretch of trail from Perth to Tweed on a bicycle. It's pretty rough and remote. If I were in charge of the TransCanada Trail, I would route it from Carleton Place to Smiths Falls on the old OVR, then continue its current course along the Cataraqui trail past Harrowsmith and head south for Kingston or Napanee to merge with the Waterfront Trail instead of unnecessarily heading back north again. If VIA can help make that happen, they can have the OQR

[roger1818]

Originally Posted by phil235

I would agree. There is a reference to expropriating 50- houses in Guelph for the trench, and there would undoubtedly be relocation of services, overpass structures etc.

Interesting. I haven't seen that reference, but it does make sense. With the right plan they could turn this cost into a profit though. I'm guessing they need those 50 houses to allow them to dig the trench while keeping the existing line open. Once complete, the old tracks would no longer be needed so they could sell the land they don't need to developers. If they also agreed to let the developers cap the trench, they could potentially have more land developed than expropriated and end up recouping as much if not more than they paid for expropriation.

Now obviously this wouldn't be good for those who had their house expropriated, but it would be the impetus for urban renewal in the centre of town.

[acottawa]

Originally Posted by roger1818

Interesting. I haven't seen that reference, but it does make sense. With the right plan they could turn this cost into a profit though. I'm guessing they need those 50 houses to allow them to dig the trench while keeping the existing line open. Once complete, the old tracks would no longer be needed so they could sell the land they don't need to developers. If they also agreed to let the developers cap the trench, they could potentially have more land developed than expropriated and end up recouping as much if not more than they paid for expropriation.

Now obviously this wouldn't be good for those who had their house expropriated, but it would be the impetus for urban renewal in the centre of town.

The railway in Guelph literally runs down the middle of Kent Street. There is no way any modern building code would allow new buildings to be rebuilt.

https://www.google.ca/maps/place/Kent+St...3d43.5413824!4d-80.2511932!6m1!1e1?hl=en

[acottawa]

Originally Posted by roger1818

Mr. Desjardins-Siciliano's plan isn't to compete with the airlines or buses (their market shares, even when combined, are too small). Instead he is looking at the big market (the remaining 90%), those who drive. To do that, you need to look at why people drive and compete at that level. You can't take over all of the market, but even if the can steal 10% of it, they have gained more passengers than either the airlines or bus companies have to take.

I didn't know car share was that high. The 401 at Prescott isn't that busy (and not all of those people are headed to Toronto).

[roger1818]

Originally Posted by acottawa

I didn't know car share was that high. The 401 at Prescott isn't that busy

Prescott? I would never drive to Toronto via Prescott. Even Greyhound doesn't use that route. Having said that, a highway doesn't have to be very busy to carry thousands people an hour (even single occupant vehicles). For example, a car every 20 seconds is over 10,000 cars an hour.

(and not all of those people are headed to Toronto).

Similarly, not everyone flying to YYZ (or even YTZ) is headed to Toronto (many they are continuing on to another destination).

[roger1818]

Originally Posted by acottawa

The railway in Guelph literally runs down the middle of Kent Street. There is no way any modern building code would allow new buildings to be rebuilt.

True, but that is only 2 blocks of the entire route. Besides, they could cap that stretch, put Kent St on top of the new tracks and use the recovered land for something else (not that much different from what RendezVous LeBreton's is doing with the LRT). It just takes a little imagination.

If they build the bypass, it isn't as if the current tracks will go away, as they will still need them for GO train service, so trenching the tracks will be better in the long run.

[acottawa]

Originally Posted by roger1818

If they build the bypass, it isn't as if the current tracks will go away, as they will still need them for GO train service, so trenching the tracks will be better in the long run.

If they build a bypass Kitchener bound GO trains would use the bypass. Not sure if there would be enough traffic to maintain a Guelph to Kitchener GO service (especially since they are building a new highway to encourage Kitchener-Guelph traffic to drive).

[Truenorth00]

Originally Posted by acottawa

If Mr. Desjardins-Siciliano had just told the government: "hardly any railway in the world makes money or can pay for its own infrastructure out of the fare box, but a $4B investment would have the following benefits..." then I think the chances of getting built would be higher.

Because history has show how interested the Feds are in pouring billions into VIA services for Ontario and Quebec?

I doubt he's gone the private sector route because he had options and that was the best pick.

[1overcosc]

Originally Posted by HighwayStar

At above market... and government guaranteed.. rates.

If it's the CPPIB getting those "above market government guaranteed rates".. it's you and me and 18 million other Canadians who pay into CPP that will benefit from it.

[acottawa]

Originally Posted by 1overcosc

If it's the CPPIB getting those "above market government guaranteed rates".. it's you and me and 18 million other Canadians who pay into CPP that will benefit from it.

Ok, so rather than buy bonds, or invest in the equity market, or buy real estate, the CPPIB is going to lend money to another crown corporation at a rate higher than if the government just floated a 30 year bond to pay for the rail line. And they won't make this loan directly, but have it brokered by a third crown corporation. So the CPPIB gets about the same return it could have got elsewhere, some combination of Via Passengers and the Federal Government pay more, plus a whole lot of consultants, lawyers, advisers, lobbyists and political parties make off like bandits from all the money floating around.

This kind of complicated scheme makes sense of your religion believes interest is forbidden, or if you're a small southern European country trying to hide debt from the EU so you can join the Eurozone, but it makes little sense for a secular country with a AAA credit rating.