On Feb. 16, 2016, the Transit Alliance held a seminar on Private-Public Partnerships, particularly as they apply to transit and transportation. The final summary comment from one of the panelists was pretty profound:
- Be Brave with your Transit Vision and plan, otherwise it just won’t happen,
- Be Aggressive in getting business to support and help fund transit, and
- Build public Confidence that the project will be delivered on time and on budget.
This sounded very similar to a panel I moderated a few years ago with former Mississauga Mayor Hazel McCallion who’s answer on how to get the transit we want and need was: “Political willpower. Cash. And just do it already”.
I had the pleasure of moderating a rapid fire panel discussion, and then a fireside chat with an impressive group of experts including:
Bruce McCuaig, CEO Metrolinx;
Bert Clark, CEO Infrastructure Ontario;
James Stewart, KPMG Infrastructure’s Global Chairman / former head of Partnerships UK;
Brad Smid, Director, LRT Design & Construction, City of Edmonton;
Carol Pennycook, Partner Davies, Capital Markets, M&A, and Infrastructure;
Ed Sajecki, Commission of Planning and Development City of Mississauga
Gord Willcocks, Partner McCarthy Tetrault, Projects and Infrastructure.
The panel argued strongly in favour of P3s as the best way to ensure transit and transportation projects are constructed on time and on budget, particularly the biggest and most complicated ones. The panelists recognized that the public had lost confidence in Government’s ability to deliver projects on time and on budget. They stressed that, while Government is good at making policy decisions and setting budgetary constraints, the public is better served by leaving the actual implementation to experts in the Private Sector…experts across the Design, Build, Operate and Maintenance phases associated with efficient and effective transportation networks. They countered many current myths of P3: they are not privatization, not just procurement, not just financing, not more expensive, and not just motivated by fiscal constraints. They are collaborative arrangements that share risk between the public and private sector, they are accountable agreements offering greater transparency than previous ‘all-public’ projects offered, they are a way to ensure competitive tension and innovation are brought into projects alongside standardization and lower costs, and most importantly, they are the best way to ensure projects are built on time and on budget. P3s are not only good for design and construction; but also for ongoing maintenance and even operations.
Brad Smid from Edmonton discussed their recent LRT implementation, and said the success of their P3 model arose in part that they included an LRT governance group to take the implementation decisions away from politicians. He also talked about the challenges of having 46 at-grade street crossings giving the private operator the right to control traffic signals, and that, in retrospect, he wished they had done more grade separation. But he strongly urged Toronto to consider replacing the Scarborough subway extension with an LRT solution instead.
James Stewart discussed the 15 Billion Pound London Cross Rail project in Great Britain’s capital, and how business support and contributions were key to getting this long dreamt of transit finally built. Heathrow Airport the London airport authority, a large home developer of a site in need of revitalization, and Canary Wharf, a prime commercial property developer; all played lead roles in contributing tens and even hundreds of millions of dollars to route the transit near development projects underway by them. A business group called London First was formed to lobby on behalf of the transit plan, and they obtained consensus from business stakeholders who offered to pay increased business property taxes to fund a large portion of the Cross Rail project. Business focused on the importance of better transit for the dynamism of London and its economic prosperity. James also stressed how transit can be a rejuvenation project, transforming run down or low density areas into new mobility hubs with higher density, transit interchanges, and a vibrant live-work environment. Fare-sharing, enabled by electronic fare cards, and differential pricing according to time of day are all instituted here to re-distribute transit volumes outside of peak, ‘rush hour’ timeslots.
Ed Sajecki stressed how transit development was a City-building activity, and that we had to think about how transit can transform a city and streetscape, and how design can influence ridership and the projects ultimate return on investment. Gord Willcocks suggested municipalities too often didn’t understand P3s and needed to focus on due diligence, documentation, and appoint a client lead / point person to ensure complete understanding of the relationship, contract, responsibilities and costs.
A provocative question raised about the Scarborough subway extension confirmed that nowhere else in the world has a six-mile subway extension been built with only one stop…that is more in character with regional rail than subways. Finally, the conclusion was reached that the worlds of real estate development, municipal infrastructure, and transit-transportations systems are merging. One example discussed was the London Cross Rail build completed at Canary Wharf…without the Cross Rail line being underway yet, the shopping malls built integrated into their stations are already open and achieving viable levels of customer traffic. Development and transit going hand in hand.
To work together towards transit and transportation solutions to put the Great back into the Greater Toronto & Hamilton Area (GTHA), all levels of government and the corporate community need to collaborate on P3 agreements that are brave in vision, aggressively sold to the private and public communities served, and confidence-building for their efficiency and effectiveness to the citizens of cities and regions they serve. The panel clearly stressed the critical role for business in achieving these goals.