No new taxes! Wynne and Trudeau's spending is out of control on a number of 'activist' pet projects of dubious value. By the end of Wynne's mandate 50 billion will be added to the province's debt. All departments should immediately slash spending. There should also be a moratorium on hiring except in highly technical fields across government departments. We are cruising for lowered credit ratings and higher debt payments. Ontario is one of the most indebted sub national jurisdictions. I suggest taking a close look at what can be salvaged and privatized. The only way that any of these fantastical transportation projects will be funded is through highly creative funding tools. I feel sorry for my grandkids. The millennials have already given up on home ownership.
So, for clarification; you believe this proposal and your related one for the Allen, can be funded by tolling only the proposal themselves and/or TIF.
I think the issue of using TIF and the problems that entails have already been thoroughly discussed.
So I'll skip over to your other financing notion.
For this to work, either as a private, or autonomous public (self-funding) proposal.......
We need to know the total cost you seek to recover.
As yet, you haven't put forward numbers, so I will throw out some admittedly very crude, back-of-the-envelope ones.
Cost of basic, underground, subway, excluding vehicles, and yards, in the ballparks of 450M per km, excluding terminal/interchange stations).
So a route covering in the range of 15km from the north-west of the City through to downtown runs you, $6.75B
Add in rolling stock at around $800M; plus a minimum of 3 interchange stations at +200M a pop for 600M, and a subway yard......probably running in the vicinity of 1B including properly aquisition.
So 9.2 B give or take a rounding error.
Now.....let's admit that your idea has the added complexity of a highway underground to deal with, requiring additional depth there and in certain areas downtown due to underground infrastructure.
I can't say what the added cost would be, but charitably, I would add 30% to the line-based costs, that's easily justified, and it would likely be more.
So we're all in at $11.2 B, on the low side for the subway portion of the scheme.
Now, we know transit fares don't recover operating costs, so your capital costs must be recovered from those using the highway.
But we haven't yet added the highway costs.
I could use Boston's 'Big Dig' as benchmark..........on the one hand that would be harsh, given the rather poor project management and costing of that effort; on the other hand their plan, in many respects
featured fewer complications than yours.
It cost in excess of $2B per km.
Inflation notwithstanding, I'm willing to assume you could build your highway at roughly 3x the cost of the subway, based on straight lane width vs tunnel width and replacing the cost of stations w/the cost of ramps.
That gives you a cost of around $9.4B; frankly I find that quite low...........but let's leave it for now...............so add that to the subway for a total cost of $21.5B.
Assuming a private entity built this, it would, as is likely w/gov't be debt-financed.
Commercial lending for this type of project would likely see rates in the range of 6% if the gov't issued guarantees, and 8% without.
So....let's assume an 8% carrying cost on the $21.5B
Assuming a 30-year amortization; you need to recover $700M+ per year, plus interest, so another $1.7B per year.
That's a total of 2.5B per year, with no profit.
Let's assume your highway is full to the brim.
That's around 15,000 cars each way in rush hour, or 30,000 daily trips in the peak.
Let's assume an additional 30,000 trips for the balance of any given day, or 60,000 trips per day on weekdays, and 30,000 per day on weekends.
That's 360,000 trips per week.
That's about 18.7M trips per year.
So now let's get to the cost per driver shall we?
At $10 per trip, you generate $187M per year.
Or less than 10% of what you require.
Taken to its logical extreme, you would have to charge each driver about $140 PER Trip.
$280 per day in commuting costs.
This assuming the private consortium has no interest in making a profit!
Assuming, you went to a pure government model, which still requires borrowing, you might get your interest costs as low as 2% right now, though that's optimistic.
But if you could, and if that reduced your total borrowing cost to around $400M per year, you need only recover $1.1B per year from drivers.
That let's them off with a paltry $60 per trip, or $120 per day in costs.
Now you can nitpick my numbers, change the amortization, modify the debt structure (assuming a declining balance would lower interest costs in the out years) but on the whole, I don't see you getting this done any cheaper than what I've outlined.
Now tell me again, please how this could be self-financing w/o new taxes?
Please don't imagine that Hong Kong style development would recover your costs; I don't have time to address that, in detail, right now, but I can tell you if the builder maxed out density on every available site already costed for, there is no hope of coming close.
