Green Line LRT - $4.6 Billion Project

[MalcolmTucker]

Originally Posted by milomilo

There's room for both, serving different purposes. But if I had to pick one it would be the heavy rail link.

I know airport rail links are a "nice to have" and their value overstated but the city's plan of a people mover where you then have to transfer to our bargain basement LRTs? That's trash, no one arriving in Calgary wants that, they'll just take a cab. But a proper train to downtown (and Banff) actually would be an attractive proposition to a visitor.

The city plan would be good for workers and as a cross city link. But seeing as we'll not be getting the Green Line north for decades, if ever, the whole idea kinda falls apart.

As you said, both serve different purposes. The people mover link is to concentrate airport oriented people intensive uses close to the line for employees and everyday customers. And to secondarily provide a lower cost (for users) link to the LRT network. The CIB project is a strategic economic development asset for Calgary and the Bow Valley. It creates and unlocks opportunities that would otherwise be lost to us.

[jawagord]

While I expect something is more seriously wrong in Phase 1 procurement than is being told here, at least the City has a provincial fall guy to pin their planning incompetence on!

The city is delaying the next step in the Green Line LRT project, which could jeopardize plans to start construction next year.

Two sources with knowledge of the situation told Postmedia on Wednesday that the procurement process will be delayed some months as the city looks for certainty about the provincial government’s financial commitment.

“The City has made the decision to pause the segment 1 procurement schedule to provide time to conclude the work with the province. We do not believe it is responsible to continue with the current procurement while discussions with the province are evolving.”

https://calgaryherald.com/news/local-new...ed-over-provincial-funding-uncertainties

[milomilo]

Agreed, I don't know why the province felt they had to be the "bad guys" here, the city is doing a fine job of ensuring the project does not need the provincial money.

I'd love to know what is actually going on here. This project should be well underway by now, we should be talking about the latest construction updates and TBM deliveries.

[MalcolmTucker]

The province does not understand why the tunnel portion can't be a fixed price contract and low price at the same time. They need to take a P3 refresher that focuses on risk sharing and how P3 projects fail.

[YYCguys]

Originally Posted by MalcolmTucker

The province does not understand why the tunnel portion can't be a fixed price contract and low price at the same time. They need to take a P3 refresher that focuses on risk sharing and how P3 projects fail.

Is the tunnel portion still the sticking point here? Why can’t they get started on the non risk portion (Shepard to Ramsay) and work through the rest of it whilst that part gets underway?

[milomilo]

Originally Posted by MalcolmTucker

The province does not understand why the tunnel portion can't be a fixed price contract and low price at the same time. They need to take a P3 refresher that focuses on risk sharing and how P3 projects fail.

Well is there not an issue here then that the tunnel portion cannot be built in the budget allocated?

What is the way forward? If the project is to be built, then they either need to cut it further (almost certainly from the north) or increase the budget. The latter seems unlikely from the province and while I'm sure money from the city could be found, I can't see there being much political appetite.

Alternatively, the design of the central section could be completely changed, yet again. Not only would this delay the project further and completely prove the uselessness of all the "community engagement" that was done to decide on the design, I'm not convinced any other option would be feasible or save much money. Elevated always seemed like a non option for a number of reasons.

The further the Green Line project goes, the more it seems like it was doomed from the start, the moment the two legs were combined. "LRT on the Green" may end up being the ones to blame for the Green Line being abandoned, or at least delaying it until the city goes full circle and only builds the SE line.

[milomilo]

Originally Posted by YYCguys

Is the tunnel portion still the sticking point here? Why can’t they get started on the non risk portion (Shepard to Ramsay) and work through the rest of it whilst that part gets underway?

Maybe there still are some grown ups in charge somewhere that have put the brakes on building a line that would be completely useless on its own until the piece that makes it useful is decided on?

Building Shepard to Ramsay would make sense if it was all but guaranteed the central portion would be underway shortly after. If they are delaying the SE section, that implies to me we are nowhere close to a conclusion on the central part.

[Policy Wonk]

My understanding is the province is concerned that the city will knowingly blow the budget and then on the eve of the next provincial election demand that the Green Line be bailed out to the tune of billions of dollars just to finish the downtown segment which is something the NDP will be all too happy to oblige.

They’re also frustrated that the Green Line simply won’t reach the suburbs in the working lives of their supporters and if the Centre Street alignment is just awful they will be blamed for not providing greater funding or for having funded it in the first place depending on who you ask.

[Policy Wonk]

Originally Posted by Corndogger

Yes, no one knows for sure what will happen but major events often lead to permanent change. There are plenty of studies showing that demand for office space will drop significantly, people will work more from home, people are moving to larger homes in the suburbs, etc. This is a societal-changing pandemic whose impacts will felt for decades.

Work from home is something I have been thinking about a lot and I keep coming back to my old “white collar gaze” trope.

Working from home sounds amazing when you have a nice comfortable home office to work from and the best internet connection money can buy, for one of my old colleagues who had to move to Toronto to find work it meant working at a tiny kitchen table with her two roommates who had been girlfriends but now hate each other on internet connection that was shared by all the units in the building and rarely pulled down more than 3 Mbps at any time other than the middle of the night. She said working from home was like trying to shave her legs while using a camp shower.

So it is something that works just great for privileged people but is a horrible imposition of just about anyone who doesn’t have the space or technical resources. I imagine in the long run it will just become a perk for those people.

[MalcolmTucker]

Originally Posted by milomilo

Well is there not an issue here then that the tunnel portion cannot be built in the budget allocated?

Not exactly. The problem is they can't sign a fixed price contract within the budget. Because there is risk, a fixed price contract would have to include a risk premium incase the project went sideways in a major way due to the known risk of the 2nd street underground sand valley. It is better in a case like this to sign a risk sharing contract, as the chance of having to pay for that risk is 100% in a fixed price contract, and lower in shared contract.

Originally Posted by milomilo

What is the way forward? If the project is to be built, then they either need to cut it further (almost certainly from the north) or increase the budget. The latter seems unlikely from the province and while I'm sure money from the city could be found, I can't see there being much political appetite.

The province needs to understand why the project can't be contracted using their preferred method. If the province wants to contract it using their preferred method, the province should take over the project and the costs involved from using their preferred method.

Originally Posted by milomilo

Alternatively, the design of the central section could be completely changed, yet again. Not only would this delay the project further and completely prove the uselessness of all the "community engagement" that was done to decide on the design, I'm not convinced any other option would be feasible or save much money. Elevated always seemed like a non option for a number of reasons.

TBH, the contracts should go forward and if the tunnel section has a failed RFP, we should redesign phase 2. But it isn't a reason to stop.

Originally Posted by milomilo

The further the Green Line project goes, the more it seems like it was doomed from the start, the moment the two legs were combined. "LRT on the Green" may end up being the ones to blame for the Green Line being abandoned, or at least delaying it until the city goes full circle and only builds the SE line.

No. Since the SE line includes the tunnel. and the tunnel is the entire problem. Because of a known issue that we can only mitigate with money, or an alternative design that downtown business owners have scared the city away from.

[milomilo]

Originally Posted by MalcolmTucker

Not exactly. The problem is they can't sign a fixed price contract within the budget. Because there is risk, a fixed price contract would have to include a risk premium incase the project went sideways in a major way due to the known risk of the 2nd street underground sand valley. It is better in a case like this to sign a risk sharing contract, as the chance of having to pay for that risk is 100% in a fixed price contract, and lower in shared contract.

The province needs to understand why the project can't be contracted using their preferred method. If the province wants to contract it using their preferred method, the province should take over the project and the costs involved from using their preferred method.

TBH, the contracts should go forward and if the tunnel section has a failed RFP, we should redesign phase 2. But it isn't a reason to stop.

No. Since the SE line includes the tunnel. and the tunnel is the entire problem. Because of a known issue that we can only mitigate with money, or an alternative design that downtown business owners have scared the city away from.

But this still all just sounds like it is going to cost more than the province wants to pay. Either up front or when the cost overrun inevitably happens. Surely it's just politics on the province's part? They must understand this all just fine, but rather than outright say they don't ever want to pay more than they have committed, they can use a contracting strategy that either keeps the cost within that or doesn't happen. And the city can happily blame the province even though this situation is of their own making. The province's position sounds totally fair to me and it's what voters elected them to do.

The SE line mainly includes the tunnel because it has to join the north line, if it didn't have that limitation then other options would have been feasible. Or maybe looked at in isolation we'd realize the SE doesn't actually justify a multiple billion dollar LRT line...

I find it impossible to know what the actual reasons for the route decisions were - elevated vs tunnel etc, as the city definitely lies in the pdfs it releases. The stated reasons on the pdfs do not match what the councilors say when they let slip what they believe the reasoning to be. If the reason they decided against elevated was downtown business owners, that wasn't clearly stated in official documents. Either way, I think there are pretty strong reasons why elevated is a non starter, I'd be surprised if that's where we end up, but who knows?



Option C being elevated

[MalcolmTucker]

But this still all just sounds like it is going to cost more than the province wants to pay. Either up front or when the cost overrun inevitably happens.

Well, no. The risk sharing. It is to fix the price you have to pay for the worst possible outcome in 100% of the cases. That risk is fairly low probability, but high impact. The problem for bidders is they have been hit in the past decade by low probability but high impact events on multiple fixed priced contracts.

[milomilo]

Originally Posted by MalcolmTucker

Well, no. The risk sharing. It is to fix the price you have to pay for the worst possible outcome in 100% of the cases. That risk is fairly low probability, but high impact. The problem for bidders is they have been hit in the past decade by low probability but high impact events on multiple fixed priced contracts.

If the bidders have been burned that many times it sounds like these high impact events aren't actually low probability at all. We all are well aware that infrastructure projects frequently go over budget due to "unforeseen" problems, especially with complex projects with tunneling like the Green Line.

The city decided on a budget and came to an agreement with the province. I don't really see much issue if the province wants to stick to the funding they agreed to. If the city doesn't want to take on the burden of cost overruns either, oh well, no Green Line.

[MalcolmTucker]

I don't really see much issue if the province wants to stick to the funding they agreed to.

I think the province is taking it a step further - trying to paternalistic-ally protect the city. The feds aren't liable for cost overruns, and neither is the province to my understanding.

[milomilo]

Originally Posted by MalcolmTucker

I think the province is taking it a step further - trying to paternalistic-ally protect the city. The feds aren't liable for cost overruns, and neither is the province to my understanding.

That's a fair criticism then. And I don't know why they feel the need to do this, the city is doing a good enough job of ensuring the project doesn't get built on their own. It also goes against the conservative ideology of local control. If we Calgarians want to mismanage our city, we should be allowed to.

[YYCguys]

Originally Posted by MalcolmTucker

The province needs to understand why the project can't be contracted using their preferred method. If the province wants to contract it using their preferred method, the province should take over the project and the costs involved from using their preferred method.

What would the design implications likely be if the province takes over the project (elevated or street level through downtown? Route re-alignment to stop the line at the edge of downtown like at City Hall or similar? Etc)? And why haven’t we heard from the feds on this since 1/3 of the funding is theirs?

[MalcolmTucker]

The feds confirmed their funding years ago. so did the province. sigh.

[Doug]

Originally Posted by milomilo

That's a fair criticism then. And I don't know why they feel the need to do this, the city is doing a good enough job of ensuring the project doesn't get built on their own. It also goes against the conservative ideology of local control. If we Calgarians want to mismanage our city, we should be allowed to.

Unlike in the US, Canadian municipalities are financed by their respective Provinces. The City of Calgary borrows from the Province. It does not float its own bonds. If the City were to default, the Province is the creditor. That means in effect, the Province bears all risk of cost over-runs. Of course the Province could negotiate with City taxpayers to take on some of the burden, but it would not be in a strong bargaining position.

[milomilo]

Originally Posted by Doug

Unlike in the US, Canadian municipalities are financed by their respective Provinces. The City of Calgary borrows from the Province. It does not float its own bonds. If the City were to default, the Province is the creditor. That means in effect, the Province bears all risk of cost over-runs. Of course the Province could negotiate with City taxpayers to take on some of the burden, but it would not be in a strong bargaining position.

Seems a bit of a stretch to say that Green Line cost overruns would be enough to push the Calgary to default on its debt. And assumes the city would actually go ahead if it assumed all the risk.

The province did their bit by funding the project. Otherwise, they should let the city make its own decisions. The province could give the cities more funding options too... but both of these things assume the UCP actually believed in a consistent conservative ideology, but they don't.

[MalcolmTucker]

Originally Posted by milomilo

That's a fair criticism then. And I don't know why they feel the need to do this, the city is doing a good enough job of ensuring the project doesn't get built on their own. It also goes against the conservative ideology of local control. If we Calgarians want to mismanage our city, we should be allowed to.

This government talks the language of local control, but doesn't walk the walk. Across government their actions are about centralizing control and reducing other voices and alternate centres of power.