Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Archive for December 6th, 2006

“The Pig That Flew”

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“The Battle to Privatize Canadian National”

Harry Bruce Published by Douglas & McIntyre 1997

I picked this up in our local library. It is all very positive – and it’s idea of success is that the IPO was heavily oversubscribed and the share price rose dramatically once it was traded.

“Privatization insiders would later argue that the five phenomena that made the deal so marketable were: the pending improvement in the regulatory environment [Canada Transportation Act 1996]; the arbitrated labour settlement that took account of the “economic viability” of the railways; the appointment of one of the best boards in Canada; the financial restructuring that included lopping $1.4 billion off the corporation’s debt [largely in return for land]; and the extent to which Tellier, Sabia and their team had already proved they had the drive to bulldoze through a U.S.-style turnaround”

Actually the book shows that it was only a battle against the unions and the media. The former defending some quite extraordinary contract arrangements, the latter simply being highly sceptical. The US railway investors were quite keen, and it makes me wonder why the privatsiation team tried so hard to sell stock once they understood that demand would exceed supply. Arguably the stock was initially underpriced, and the underwriters made out like bandits.

The behaviour of Tellier and his colleagues is reported to have been quite exceptionally unCanadian. People actually losing their tempers! Tsk tsk.

The story now needs to be updated. The continued pressure to cut costs has some people wondering if it has been done at the expense of safety, especially in view of the number of disastrous derailments. The take over of BC Rail showed that CN management really did not understand what a challenge this railway would be to operate and Transport Canada has intervened to limit train lengths and insist that locomotives have dynamic brakes. Too late to save the fish in the Cheakamus River of course.

CN was able to shed most of its social responsibilities – the operation of passenger trains went to VIA many years earlier (though apparently few commentators realised that) as has the need to provide freight service to small communities. Maybe CN think of their responsibility to protect the lives of their crews and the environment has been reduced too?

CN Train Wreck

But at least Canada can point to this privatisation as one that worked out well financially – unlike that of railways in the UK .

Written by Stephen Rees

December 6, 2006 at 10:00 am

St. Clair: Our new midtown highway

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St. Clair: Our new midtown highway

Although the TTC initiated the project ostensibly to improve the reliability of the St. Clair streetcar, the City’s Transportation Department quickly hijacked the scheme to divert criticism and detailed analysis of its real goal, namely to severely rebuild the street into a city highway slashing through the very heart of midtown.

Howard Levine, National Post

Published: Friday, December 01, 2006

Howard is rightly upset. The TTC hung on to streetcars when most cities in Canada, the US and UK were scrapping them. They have been very successful, and have become part of the identity of Toronto. They have even built an extension (the Harbourfront line) and separated streetcars from traffic on Spadina (pictured below), which is a model for other cities to reclaim street space for a wide variety of urban uses.

Streetcars on Spadina

What seems to have gone wrong here is that somehow the planners got sidelined and the engineers took over. A familiar story.

Written by Stephen Rees

December 6, 2006 at 8:01 am