Private partner may design, build and finance new TTC projects

By Allison Hanes, National Post

Metrolinx and the Toronto Transit Commission are in talks to bring in private partners to design, build and most notably finance the new Finch Avenue light rail line, the overhaul of the Scarborough rapid transit line and possibly the 33-kilometre partially buried Eglinton Crosstown line.

While the TTC often contracts out design and construction work, it would be the first time a major infrastructure project in the city is bankrolled by the private sector and paid for with public dollars on delivery, said John Howe, the vice-president of investment strategies for Metrolinx.

“I guess the part that is really new for transit in Toronto is the financing part, looking at private-sector financing to cover the construction costs of the project and then payment for the project would occur after completion and after the project has been completed to the satisfaction of the owner, which would be Metrolinx,” he said.

The TTC would still operate and maintain the lines.

Despite the TTC’s past reluctance to cede control over projects to outside sources, Metrolinx, the provincially mandated regional transportation body, has been flexing its muscle since Premier Dalton McGuinty ejected local politicians such as Toronto Mayor David Miller and stacked the board with transit experts.

Metrolinx is presiding over unprecedented transit expansion in the region, including Ontario’s investment of $10-billion to build Toronto’s Transit City light-rail network.

Two Transit City lines — Finch and Eglinton — are “candidates” for private financing, Mr. Howe said. The SRT and Phase 2 of the Viva bus rapid transit line in York Region is also likely to be subject to the model, a version of which funded Vancouver’s new Canada Line for the Olympics.

“These are the first TTC projects so to speak that would be delivered by [private financing]. And if they are successful we would see it perhaps as the model to deliver more transit projects in the region.” Mr. Howe said.

Gary Webster, chief general manager of the TTC, said the body is looking at private financing on a “project-by-project basis,” which defers some of the upfront cost.

“We’re working with Metrolinx and Infrastructure Ontario to determine what the appropriate construction approach is, whether it’s a design-bid-build, which is the normal approach the TTC has used to build major projects, or if you use an alternate financing approach, which allows you to back-end load your costs to this,” he said.

But councillor Adam Giambrone (Davenport), chair of the TTC, warned getting such private financing partnerships off the ground can delay projects — especially ones the province wants to get done in time for the 2015 Pan Am Games.

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