The Increasingly Exorbitant Cost of (Transit) Infrastructure

[DirectionNorth]

This is something I've been thinking about for a while, both in UT posts and outside of it. Additionally, I've seen lots of allusions to this in many of our transport threads, so I thought I'd start a dedicated place to debate this.

In the last few years, we've seen the cost of transit infrastructure in Toronto explode.

Surface LRTs that cost in the region of $100 million/km (Finch West) a few years ago are now double that or more (Hamilton, Hurontario).^ TYSSE cost $450 million/km and we all derided that project as overbuilt. Now, SSE and YNSE are running towards $700 million/km. Eglinton West costs double what ECLRT cost, ($500 million/km vs. ~$280 million/km), but while the project's wholly tunneled, there's no underpinning or ROW difficulties to deal with. John Tory's always idiotic Smarttrack is at $1.4 billion for five stations. European cities can build an entire tramway network for that. My understanding is that GO RER is also overpriced for the work involved, but there aren't many comparisons and there's no final price yet.

Perhaps worst of all, the Ontario Line's capital cost is $19 billion, which works out to over $1 billion/km. This is a line that skimps on alignment: there's significant at-grade track, and tunnelling is only used where it has to be (under Queen and Pape).

This is in comparison to downtown European projects, such as Berlin's U5 from Alexanderplatz, which cost maybe $400 million/km (CAD); Paris's RER E to La Défense, which was a similar amount; Milan's Line 4, for $200 million/km; Barcelona's L9/10, a little over $220 million/km; even Amsterdam's Noord-Zuid Subway, built in the Dutch soil and taking 14 years, cost maybe $700 million/km.

(aaaand you get the point)

What gives?

I'm trying to read on it, but I can only scratch the surface of this issue, and its complexity means that I can't read everything and my knowledge base isn't that deep.

My best understanding of the situation is that there's poor oversight of designing projects. Our 1980s-2010s transit building gap means that expertise that IIRC built the YUS/BD subways for $100 million/km or less has left or retired, leaving inexperienced people in charge. Design is poorly done, and there's political meddling, so costs are higher, which makes for more politics. Meanwhile, we tunnel under existing surface ROWS (EWLRT) and build at-grade in the downtown (OL). We contract in large packages, so smaller firms can't compete; hide everything, making transparent pricing impossible (Metrolinx is very, very guilty); we delay because of political uncertainty (see: Hamilton LRT); and at the end of the day we end up with worse results.

(I'm not informed, humour me here)

Do the good people of UT have any insights? Is there some big thing I missed? And what is being done/can we do to ensure that our future projects will remain be reasonably priced?

^all prices come with inflation built in, as according to the BOC's inflation calculator

 

[crs1026]

I'm not well read either, but I have a few theories.

One is that we do load a lot more into designs than we ever did before.... ie more exits from a subway station, more stairways and escalators, deep bore stations that demand a lot more work to excavate and construct. There are few "vanilla" designs or structures. Even our LRT platforms have more cubic feet of concrete and tonnes of steel than anything we built previously. And there are more systems, more wiring, more everything in them.

A second is that we allow much greater contingencies, and we pad schedules more as a way of assuring that different contractors or trades don't overlap. That lengthens project timelines, which amounts to greater financing burden. Project teams last longer.

A third is that we time projects to a political schedule and not to an optimised workload for contractors or workforces. A couple of decades back, the theory was, we should build x miles of subway per year. Mike Harris killed that idea and we've never recovered to an "optimal" but steady pace.

A fourth is that our work methods are more risk averse. I marvel at how projects are protected by jersey barriers and fencing where in past years there might only have been sawhorse barriers or pylons. The effort required just to site prep a project is clearly greater.

Further, I wonder if we are putting too many eggs in international expertise pools. Maybe doing things with our own local design and construction forces wasn't all wrong.

And lastly, labour rates have gone up. If you read the old newspaper articles about the labour unrest during the University subway construction....it's apparent that that project utilised a lot of cheap exploited immigrant labour (to the point that when the tunnelling landed at Queens' Park, then Premier Frost had to appoint a commission to buy peace for the workers who were literally under his feet).

All just me spitballing.

- Paul

 

[Northern Light]

This is something I've been thinking about for a while, both in UT posts and outside of it. Additionally, I've seen lots of allusions to this in many of our transport threads, so I thought I'd start a dedicated place to debate this.

In the last few years, we've seen the cost of transit infrastructure in Toronto explode.

Surface LRTs that cost in the region of $100 million/km (Finch West) a few years ago are now double that or more (Hamilton, Hurontario).^ TYSSE cost $450 million/km and we all derided that project as overbuilt. Now, SSE and YNSE are running towards $700 million/km. Eglinton West costs double what ECLRT cost, ($500 million/km vs. ~$280 million/km), but while the project's wholly tunneled, there's no underpinning or ROW difficulties to deal with. John Tory's always idiotic Smarttrack is at $1.4 billion for five stations. European cities can build an entire tramway network for that. My understanding is that GO RER is also overpriced for the work involved, but there aren't many comparisons and there's no final price yet.

Perhaps worst of all, the Ontario Line's capital cost is $19 billion, which works out to over $1 billion/km. This is a line that skimps on alignment: there's significant at-grade track, and tunnelling is only used where it has to be (under Queen and Pape).

This is in comparison to downtown European projects, such as Berlin's U5 from Alexanderplatz, which cost maybe $400 million/km (CAD); Paris's RER E to La Défense, which was a similar amount; Milan's Line 4, for $200 million/km; Barcelona's L9/10, a little over $220 million/km; even Amsterdam's Noord-Zuid Subway, built in the Dutch soil and taking 14 years, cost maybe $700 million/km.

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View attachment 579839View attachment 579843

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(aaaand you get the point)

What gives?

I'm trying to read on it, but I can only scratch the surface of this issue, and its complexity means that I can't read everything and my knowledge base isn't that deep.

My best understanding of the situation is that there's poor oversight of designing projects. Our 1980s-2010s transit building gap means that expertise that IIRC built the YUS/BD subways for $100 million/km or less has left or retired, leaving inexperienced people in charge. Design is poorly done, and there's political meddling, so costs are higher, which makes for more politics. Meanwhile, we tunnel under existing surface ROWS (EWLRT) and build at-grade in the downtown (OL). We contract in large packages, so smaller firms can't compete; hide everything, making transparent pricing impossible (Metrolinx is very, very guilty); we delay because of political uncertainty (see: Hamilton LRT); and at the end of the day we end up with worse results.

(I'm not informed, humour me here)

Do the good people of UT have any insights? Is there some big thing I missed? And what is being done/can we do to ensure that our future projects will remain be reasonably priced?

^all prices come with inflation built in, as according to the BOC's inflation calculator

You've got some good thoughts as does @crs1026

But lets give you some light bedtime reading on the subject, LOL.

https://rccao.com/research/files/RCCAO-STATION-TO-STATION-REPORT-APRIL2020.pdf

I will put it down to a lot of what Stephen has to say above, but I will add greater emphasis on a couple of things....

P3s. This isn't an ideological question for me, its simply the note that

a) If you contract out financing to a non-government entity (you don't have to do with with a P3 but its common here), the private entity on raw cost will borrow at slightly more than double what the government could. That's a number in the billions on a large project. That's before realizing, they will not do this for you as a favour, they will charge a fee on top of their cost of financing.

b) If you nominally shift all the risk onto a consortium, they will, duh, charge you a risk premium to cover themselves, if they don't, watch out for the problems of penny-pinched sourcing (see Bombardier losing money on every Flexity they sold the TTC, and the substandard work on same performed in Mexico.)

*****

Also a problem is that these things tend to go to randomly formed consortia (that is to say, the players haven't necessarily worked together before and don't have teams that know and understand each other's needs, see Ottawa)

*****

Finally, I'd add..........what else is the project paying for......... I've seen the estimates coming in for the new GO Stations and for the Rail Path (both being built by Mx for the City).....there is 100% stuff being billed to the City that should not in my opinion be part of the contract cost.

ie. adding a crash wall along the Rail Path is debatable in necessity, but certainly is a choice for Mx, not a design mandate for a bike trail. In K-W, there is active freight rail still running through downtown, on-street/lanes shared with pedestrians.