Why transit fares must increase.
Some years ago, I corresponded with a chap in the UKAi??who was (and still is) a respected transit consultant and much what I discuss about in this blog comes from our discussions. One striking comment he made; “Building metros on routes that do not have the ridership to sustain them, only invites higher subsidies and fares.“, resonates today.
It is common sense really and in Vancouver, we have three under performing mini-metro lines; the Expo and Millennium SkyTrain Lines and the truncated Canada Line.
The Expo Line does indeed carry a lot of ridership, but – this is only because TransLink has cascaded every available East – West transit passenger it can on the one metro line. TransLink admits that over 80% of SkyTrain’s passengers first take a bus to the metro, which means SkyTrain is not generating much new revenue, but instead must share its revenue with the buses. All the Expo Line is doing isAi??forcing bus customers to inconveniently transfer from bus to metro.
The same is true of the Canada Line, which cost at least $2.5 billion to build (TransLink gives the construction costs of the Canada Line between $1.9 billion to $2.2 billion, depending who is being interviewed), yet carries a mere 50,000 customers a day, which translates into about 100,000 boardings a day. Of the 50,000 actual customers, 35,000 were previous bus customers and about 10,000 are YVR employees who park near the Templeton Station on Sea island and commute for free (all travel on the Canada Line on Sea Island is free) one station to the airport terminal! Factor in multiple rides by U-Pass holding students and the Canada line has only attracted a few thousand new transit customers, which is a very bad return on a $2.5 billion investment.
The result of very expensive metro systems under performing is simple, higher gas taxes, higher property taxes and higher fares.
The following email was sent to me by a Vancouver transit advocate and certainly point to the reason Translink is floundering in debt, needing huge subsidies to stay afloat.
Subject: Opposed to Fare Increase
Due to Translink’s illegally-singed and inflated P3 contracts, I will not
pay more and am opposed to a fare increase for the general public.Why is Translink now paying over $110 million dollars per year to the Canada
Line P3 operator, a figure far above that required to operate the line and
recoup its capital investment over 25 years?The Translink Board of the day never approved funding for this longterm
payment schedule, once termed “Performance Payments” in a Provincial funding
document.Ai?? These payments were to be specifically tied to the P3
contractor’s assumed and unverified cash contributions to the construction,
and based on the claimed $600 million private sector contribution, payments
over $100 million per year for over 25 years are an illegal gouging of the
public purse.Ai?? Again, these payments were never approved and allocated by
Translink in the capital budget of the Line, and payment is thus illegal.This sickens me, as I watch funding dry up for real transit service.
Randy Chatterjee
Vancouver
The capital contribution to the Canada Line by the P3 consortium amounted to $716,773,000 (see Note 9(a) in TransLink’s 2010 Consolidated Financial Statements).
The capital contribution by the various public bodies amounted to $1,371,000,000 at June 30, 2009, with seven weeks to go before operations started. This suggests a final total capital cost of about $2.1 billion.
TransLink’s annual payment to the P3 operator for operations and maintenance (shown in Note 9(b)) is partly defrayed by a payment by the B.C. government of approximately $19.3 million annually (Note 9(c)).
TransLink’s estimated payment of $102 million for 2012 is thus $83 million on a net basis.
But what is forgotten, is that the P-3 consortium is paid back by the taxpayer one way or another, either by direct subsidy or by maintenance agreements or alike, thus the true cost is hidden from the books. Thus the real cost of the Canada line to the taxpayer may well be $5 billion over time and this cost is in line with similar light-metros being built. Unless the BC’s Auditor General signs off on the Canada Lines finances, I wouldn’t believe a word from the BC government or TransLink.
A well experienced transit consultant overseas scoffed at the $2.1 billion price tag claimed by many and has stated to me that the Canada Line, as delivered must have cost in excess of $2.5 billion (Susan Heyes research showed the real cost of the Canada Line in excess of $2.8 billion). If TransLink could have built a major 19 km subway/metro for $2.1 billion, the world would be knocking on our door; the world hasn’t and for good reason, the advertised price is not the real price.
One has to wonder who paid for the utility relocations along the Cambie Canal. The only reason for relocation of the utilities was the building of the Canada Line. These costs are usually part of the tender but in the Canada Line’s case they were not.
So, did the City of Vancouver pay for them, Translink or SNC Lavalin?
I’m becoming interested in the subject so was happy to read through your thoughts. Your overall quest to find the most efficient way to deliver passengers is a good one to be on, thanks…
I think there is a flaw in your logic though when you call the metro lines under utilized… Just because the lines are fed by buses, doesn’t necessarily mean they are redundant… the lines may best be described as a lower costs system of passenger delivery than the buses, and therefore funnelling to the metros would be viewed as a positive.
Have you seen any analysis that confirms/contradicts that?
regards,
Ben
Thanks for your observations.
I would guess that transit planers are now rejecting the bus/light-metro spine, there is something wrong. The problem is, one can not get enough bus service to satisfy the metro’s demand and the extra cost to build the metro, could have been better spent extending a cheaper to build LRT to new destinations. The lack of sales for light metro (SkyTrain, VAL, etc.) seems to confirm this.