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Knowing Cost-Benets of Projects Important
Putting an economic value on a major transportation
project can only occur with strong cost-benefits evaluation
systems in place. It is also vital from the standpoint of
transparency and the extent to which we as taxpayers have
a clear understanding of the rationale and business cases for
major regional transportation infrastructure projects. Public
trust and willingness to consider revenue tools is highly
contingent on having these facts in plain view. Without a
full understanding of the total costs and benefits, including
operating, economic and environmental, of any proposal, we
are into the realm of highly subjective and emotive debates
about subways versus LRTs, buses versus streetcars, etc. We
need concrete and easily digestable figures and numbers, not
baseless assertions.
As a recent report prepared by transportation expert, Michael
Schabas, for the Neptis Foundation points out, Metrolinx
has not released a Benefits Case Analysis (BCA) for certain
projects, despite making a committment to doing so in
2008. Most notably no BCA has been issued that justifies the
Scarborough subway, which the Province, at the behest of
Toronto City Council, says it will now fund (Schabas 2013).
However, it is important to note the positive steps Metrolinx
has recently taken to address this issue. Its website, has now
posted BCAs for such projects as Eglinton Crosstown and
Hurontario - Main rapid transit project.
WHAT IS NEEDED
Economic criteria must be given priority weighting in
selecting future transportation projects - Given the strong
linkages between economic growth and transportation
connectivity strong weighting must be given to economic
factors including, labour market impacts, connectivity to
major employment districts and potential for driving high-
value commercial and residential development.
Robust and transparent cost-benefit analyses -
Consideration of these economic benefits needs to be in
the context of robust and transparent cost-benefit evaluations
of each transportation project. These analyses must be readily
and easily available to the public to review and comment.
Public-Private Joint Development Strategy - Metrolinx,
municipalities and private sector partners, including the
development industry, should work together on land-value
capture and other joint development strategies to drive
high-value residential and commercial growth and private
sector contributions toward the cost of stations and other
infrastructure. Such a relationship could be facilitated
by the creation of a public-private advisory council. The
council would bring together government representatives,
transportation officials and business leaders from across the
region to explore opportunities for the promotion and joint
development of critically needed transportation corridors,
such as the Yonge Relief Line.
Joined-up transportation and land-use planning - In order
to optimize the economic potential of transportation projects,
provincial and municipal planning rules must be reviewed to
ensure they direct high-density residential and commercial
development toward major transportation hubs and corridors.
Vancouver, London, Copenhagen, Stockholm, Frankfurt and
Hong Kong, to name just a few, are among the major urban
regions with policies that direct employment development to
hubs on the regional rail system.
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THE CHALLENGE
Calling all Leaders
It has often been said that the secret of business success is the
combination of smart processes and having smart committed
people. One feeds off of the other. Without the right systems
and processes, businesses cannot optimize the performance
of their employees, nor attract the best and brightest talent.
Yet, an absence of the human element, crucially leadership,
makes the successful execution of any business strategy
impossible.
In trying to understand the difficulties the region faces
in effectively addressing the problem of gridlock, we see
evidence of both weaknesses on the leadership side and also
in the structures and ways we go about planning, deciding
upon and executing transportation infrastructure strategies
in effect governance.
By leadership, were talking in simple terms about the ability
of elected officials to mobilize the electorate to not only
recognize its most pressing problems, such as traffic gridlock,
but to also deal with them (Bertlemann Siftung 2006).
In raising the leadership question, by no means are we
making a partisan statement. It is now a decades old
predicament that cuts across party lines and levels of
government. Recent analysis from the University of Torontos
Martin Prosperity Institute highlights how, since 1989,
Ontarios per capita investments in public transportation
(roads and public transit) have consistently lagged well below
its provincial peers (Gilligan et. al. 2013). The failure to make
transportation infrastructure investment a priority is one for
which governments of all stripes over many decades share
a responsibility.
As such, any hope of addressing the problem of traffic
gridlock in the Toronto region is impossible without effective
political and civic leadership. It is encouraging then to see
public transportation issues take a prominent role in the
recent provincial election and in the platforms of municipal
mayoral candidates across the region. Work undertaken
by the Institute on Municipal Finance and Governance
demonstrates the ability of elected leaders to engage the
public and regional stakeholders around shared challenges
and to shape a region-wide vision. This is a critical success
factor in advancing the transportation agenda. This fact is
evident in jurisdictions as diverse as Stockholm, London and
Los Angeles, which were able to get public buy-in for new
taxes and road tolls to pay for public transit expansion (IMFG
2012, Booz Allen Hamilton, 2011).
Decison-Making and Project Execution
a Struggle
By bringing the discussion onto the matter of governance,
the question we are posing is simple. Do we have in place
the right organizations with the requisite powers, expertise,
responsibilities and processes to deliver a truly regional
transportation system? The question is important; as a wide
range of academic research demonstrates that a failure in
governance leads to poor decision-making processes and
ultimately a substandard transportation network (PTUA
2008). It also jeopardizes the roll-out of major multi-billion
dollar projects. A study by the UK government found that
5 of the 8 common causes of infrastructure project failures
were governance related (HM Treasury 2014). Globally it is
much the same story. A 2012 LCW global study on project
management trends identified that weak governance was the
main contributor to project failure (HM Treasury 2014).
PILLAR 2: GOVERNANCE AND LEADERSHIP
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At the heart of any sound governance structure is
accountability and efficient decision-making. These elements
were clearly not in place with the on going Scarborough
subway versus LRT standoff. Indeed, it demonstrated much
confusion around the roles and responsibilities of Metrolinx
and who exactly was accountable for driving regional
transportation expansion. Despite Metrolinxs transportation
planners reccomending an LRT line, including close to
$100 million in sunk costs associated with environmental
assessments and other preparatory work, Metrolinxs advice
was, in the end, ignored by both the Province and the City
of Toronto. Over the span of several weeks, the agency was
compelled to first endorse a subway proposal from the
then provincial Transportation Minister and later Toronto
Councils approved subway route.
An obvious question then is, who acts as the final decision-
maker? Is it the Minister of Transportation, TTC, Metrolinx
Board of Directors or local councils? Taxpayers just want to
know, where does the buck stop? This is not a trivial question.
As the region considers major transportation projects
such as, the Yonge Relief Line and Richmond Hill subway
extension, we cannot afford a repeat of the Scarborough
experience with its costly delays and jurisdictional turf wars.
This cannot be the template for how we make decisions with
hugely significant and long-term implications for the region.
Yet, even when projects are finally given the go-ahead, a
lack of clarity around project planning and management
governance structures creates further problems. One
example was the recent power struggle between the TTC
and Metrolinx over who should manage construction of
the Crosstown LRT project and the role of P3 approaches.
Again this stalled work and created doubt among
potential investors and other private sector partners,
adding both delays and costs due to heightened political
risk. International experience demonstrates that private
infrastructure investment and participation in project
development and delivery relies on a solid and reliable
political stamp of approval with clear direction on what are
the rules of the game over the long-term. Recently, weve also
seen delays and cost-overuns with respect to renovations of
Union Station. As a recent report to City of Toronto council
noted, many of these issues were related to the challenges of
coordination among key stakeholders including, Metrolinx,
the TTC and private contractors (City of Toronto, Staff
Report, 2014). Again pointing to the need for clear project
governance and accountability mechanisms that set out who
is ultimately responsible for ensuring projects are delivered
on time and on budget.
Regional Fare Integration Still in the Distance
The problems with the regions transportation governance
structure go beyond bottlenecks and opaqueness in decision-
making and project management processes. They also
manifest themselves in serious operational shortcomings
and a failure to innovate through the adoption of new
technologies and systems. Just recently the City of Toronto
celebrated the 60th anniversary of the opening of the Yonge
subway line, Canadas first. News reports at the time talked
breathlessly about a new ticketing technology known as the
token that worked flawlessly on its 1954 debut (Filey 2014).
Six decades on, the regions largest transit system, the TTC,
continues on with the token, the last major transit system in
North America to do so (Garlock 2013).
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