– Local taxpayers pay heavily for new rail line

The Province

By Frank Luba, The Province   August 16, 2009

Without help from the federal government (Canadian taxpayers)  and the province of B.C. taxpayers, the Canada Line wouldn’t have been built.

But unlike the Expo and Millennium SkyTrain lines, local government and its taxpayers have to pay what is arguably the biggest portion of the $2.05-billion tab for the public-private project.

TransLink spokesman Ken Hardie said the transportation authority’s capital contribution to the project is $366 million, which it is amortizing over 32 years.

The payments on that debt, which includes the extra cost to make the North Arm Bridge accessible for cyclists and pedestrians, range from $35 million to $40 million and began in 2005. The capital payments continue through to 2037.

TransLink also has to pay the project’s private partner, InTransitB.C., annual payments for operating costs and repaying their capital costs beginning this year and running for the remaining 32 years of their contract.

The payments ramp up as the line begins service, so only total $33.6 million this year. That figure jumps to $82.9 million in 2010 and breaks the $100-million mark in 2012 with a payment of $104.1 million. The payment schedule was only available to 2019, when the bill hits a high of $121.6 million.

The schedule might not be available but the payments will continue and that’s among the reasons why Burnaby Mayor Derek Corrigan has been such a long-time opponent of the project. Corrigan pointed out TransLink is on the hook for about a billion dollars of Canada Line debt — its own capital costs and repaying the $720 million put up by InTransitB.C..

Corrigan also objects to a budget that grew by about $500 million from original estimates; the fact that the province stipulated the project had to be a public-private partnership; and that it pushed the Richmond route ahead of the Evergreen Line connection to Coquitlam.

“The Canada Line [cost] was estimated to be $1.5 to $1.6 billion,” said Corrigan. “It was estimated [to be that] by the provincial government and TransLink at the time the project was put together.

“Everything they’ve done has been what has caused TransLink’s problem,” said the fiery former chairman of B.C. Transit. “[TransLink] is servicing a billion dollars of debt on the Canada Line.”

TransLink, the regional transportation authority, is running on surplus funds which run out after 2011. It is currently seeking more revenue from Lower Mainland residents or it will have to cut service. The situation has prompted new Transportation Minister Shirley Bond to ask Comptroller-general Cheryl Wenezenki-Yolland to review how TransLink does business.

There are other implications to the big bills, most notably TransLink’s shortage of funds for the Evergreen Line — which was supposed to be built at the same time as the Canada Line. “As I predicted, the northeast sector line hasn’t even started, and it’s unlikely to start in the near future,” said Corrigan.

Federal taxpayers paid the biggest up-front chunk of the Canada Line bill with a contribution of $450 million, said Canada Line spokesman Alan Dever. He said the provincial government added $252 million during the construction phase and is responsible for another $166 million during the operating period for performance payments.

Vancouver International Airport contributed $259 million and the City of Vancouver spent $29 million to add the stop at 2nd Avenue that will be the Olympic Village Station.

InTransitB.C. put up the remaining $720 million but that is to be repaid during the course of the contract, as long as operating standards are maintained. In fact, the deal is structured so that InTransitB.C. can make a profit if it holds up its end of the P3 deal.


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