Metrolinx Calls for More Transit P3s

According to a new report released by Ontario’s public transit agency, Metrolinx, all new transit projects in Toronto will be subject to a value for money review to be conducted by Infrastructure Ontario (IO). This includes the construction of several light rail transit (LRT) lines, along with the maintenance and storage facilities. IO will evaluate the feasibility of using an Alternative Financing and Procurement (AFP) strategy, or public-private partnership (P3), to develop the new transit assets.

The projects include the Eglinton Crosstown LRT, Scarborough RT/Sheppard Ave LRT maintenance yard, Sheppard East LRT, Scarborough RT conversion to LRT, and the Finch West LRT. While the tunnel launch shaft is already under construction and the bidding process is well underway for the construction of the Eglinton Crosstown tunnel, the remainder of the project is still untendered and will be reviewed by Infrastructure Ontario to determine the feasibility of using a P3 to complete the project.

Under Infrastructure Ontario’s AFP model, the private sector would be given responsibility for the project, most likely through a Design-Build-Finance and Maintain (DBFM) model. In this case, the private sector would complete the project using private sector investors and be repaid by the province over a set number of years. The government would retain full ownership of the infrastructure asset and the private sector would have no say in terms of operations scheduling or the fee for service (currently $3 per ride on the TTC’s network).

The main benefit of this type of arrangement is that a cost guarantee is provided to the government and therefore to the public. Any cost overruns due to construction or financial issues would be borne by the private sector.

The first major project that will be completed is the Scarborough RT/Sheppard Avenue LRT maintenance yard, which will see the first phase completed in 2015 to coincide with the delivery and testing of the LRT vehicle fleet. The entire project will reach substantial completion in 2016 through a DBFM contract. The Sheppard Ave LRT line itself will begin construction in 2014 after the Infrastructure Ontario review and has a project completion date of 2018, four years after it would have been completed if the project hadn’t been cancelled by Toronto Mayor Rob Ford in 2010. The Scarborough RT to LRT conversion and Finch Ave LRT will be under construction at the same time, with a projected completion date of 2019. Metrolinx is planning for all new transit infrastructure to be complete and operational by 2020.