Stephen Rees's blog

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

Archive for July 19th, 2007

Massive cuts, fare hike coming to Toronto transit

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Last Updated: Thursday, July 19, 2007 | 7:18 PM ET



Toronto’s transit agency plans to close down its newest subway line, drop low-ridership bus routes and hike fares as a result of city funding shortages, the chairman said Thursday.

This kind of story is sadly nothing new for the TTC. For years the Toronto councillors and the province of Ontario have played silly games with transit in Canada’s largest city. They love to point the finger at each other and yell “It’s all YOUR fault”.

The Mayor came up with a funding plan, based on new powers from the Province. Just as in the early days of Translink it was based on a vehicle levy – and, in this case, a “land transfer tax”. Of course, there is only one taxpayer. The politicians do not want to get blamed for the inevitable outcry over new taxes. We had Ujjal – they have the TTC.

To reiterate, transit is never free. We need a lot more of it in Canada, and have done for a long time and the need for it is not going to go away. Sooner or later someone is going to have to bite the bullet and admit that since the federal government is not actually giving the cities the budget surpluses, then local taxes will have to pay for local transit.

Written by Stephen Rees

July 19, 2007 at 4:59 pm

Part of the parking market is working

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While we wait for our politicians to get their act together on road pricing, one part of the market that regulates mode choice is working as it should. The cost of parking downtown is going up.

A reserved office tower spot costs $268.80 a month on average, according to a survey by commercial realtor CB Richard Ellis, which is a 12-per-cent increase over a year ago. Six months ago, that same average spot would have set you back $250 per month.

The top rate that the survey found was $375.

Empty lots used for parking and parkades themselves are being redeveloped for condos. And there is now shortage of office space downtown (thanks in part to short sighted planners who allowed office buildings and zoning to be converted to residential use) – so this trend can be expected to continue.

However, there is no equivalent brake being applied to suburban office parks – where parking is not normally regulated by price. Translink tried to influence this market by a levy on parking space, which was, of course, very unpopular, especially with the movers and shakers of the BC Liberal Party – many of whom are property developers or owners. So of course their private concerns are of much greater import than the general concerns of the rest of the populace about why it is getting harder to get to work on time.

Equally on street parking is more likely to be free outside town centres – so in the absence of adequate parking controls, there is not much chance of a real parking market developing. Mostly it is seen as “free” by the user, and we all pick up the tab for them, whether we benefit or not. User pay is a better principle but it has to be applied equally and evenly.

Parking space at work of course is about status rather than cost. You will note that “important people” always get the best spots (closest to the door) often with their name prominently displayed.  This is as important to office culture as the corner office. I thought it very significant that when Japanese companies started operating in North America they did not have this practice. The senior people still got the closest spots — by arriving before everyone else!

Written by Stephen Rees

July 19, 2007 at 10:06 am

Posted in Economics, parking

Metronet to file for administration

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Guardian Unlimited Business

Metronet is one of the “Private sector Partnerships” (P3) which looks after the maintenance of part of the London Underground system. It has been wobbly for some time and now looks likely to collapse.

It is not evidence that P3s are disasters. Just that some are badly run – in this case, it simply awarded contracts to its own shareholders instead of holding open bidding. And, as usual, the public sector has to step back in and pick up the pieces to ensure that service to the public will not be disrupted.

The Province of BC now insists that all major public sector investments overt $20m be handled by P3s. About the only major project that has not been run this way is the Vancouver Trade and Convention Centre expansion which has huge cost overruns. Again, not a criticism of public sector management as such, just a very poorly designed project.

P3s would be much less contentious if governments dealt with them rationally and not as an act of almost religious faith. “Private good, public bad” is a silly principle. The privatization of the transport systems in Britain has had very mixed results indeed – British Rail being admitted by everyone to have been an unmitigated disaster. The sell off of BC Rail also seems to have been badly thought out, and poorly organized.

If a P3 is given the right sort of incentives and is monitored carefully, it can deliver projects faster and cheaper. But mostly this comes from the integration of functions – design, build, operate. Not, note anything to do with ownership. In fact when private sector borrowers go to the market, they have to pay more for money than governments do. And then they also have to make profits for their shareholders – not something that need be required of public sector corporations – though BC Hydro was bled by successive governments. It is simply bureaucracy that prevents DBO working in the public sector – and dogmatic right wing politicians who cannot stand to see successful public corporations doing a good job.

Somehow, I managed to file this piece as a draft rather than publish it. But that turns out to be just as well since Craig McInnes has a very important opinion piece “P3s just put the bill in another pocket” in today’s Vancouver Sun.

… in the past fiscal year alone the provincial government and its various affiliates added more than $27 billion in bills that will come due for taxpayers in coming years, bringing the total future obligation to more than $55 billion.

…while using private sector capital to build hospitals, roads and electrical generating facilities means that government can reduce its debt, taxpayers still get stuck with the bill. It just gets put into another pocket.

Written by Stephen Rees

July 19, 2007 at 9:43 am