Partners sought for airport transit route

David DaSilva
Business In Vancouver, December 2000

For the first time in B.C., private companies are being courted to participate in a large-scale public-private partnership to build and maintain a rapid transit line.

In the past, the provincial and federal governments have built SkyTrain lines and the West Coast Express by doling out public money to consortiums to build the lines.

But with TransLink funds stretched due to the transportation body's current slate of projects, that financing relationship may change. Officials with the Richmond-Airport Rapid Transit Office are exploring an enhanced partnership idea that would see a consortium of companies not only design and build a transit line linking Richmond, the Vancouver International Airport and downtown Vancouver, but also fund it, maintain it and operate it, said transit-office project manager Jane Bird.

Companies involved may help finance construction costs and generate returns by collecting future fares, she added.

"Essentially, you are looking at a situation where there is some kind of revenue stream that goes back to the operator," Bird said.

Talks are in such an early stage that discussing just how a relationship would work is premature, but Bird noted that there are a number of advantages to including the private sector. They include lower financial risks to public agencies and more scope to take advantage of the private sector's innovation, creativity and ability to lower project costs.

In October, Bird and other officials held a well-received workshop with businesses looking at such a partnership, she said. Canadian and international companies are expressing interest in getting involved in a deal.

"Yes, there is interest from Canadian companies. This is a billion-dollar project," she noted, before adding that was a very rough estimate.

The regional transportation authority, TransLink (www.translink.bc.ca), is currently searching for an advisor to help agencies working on a financing formula.

The earliest date a rail-based rapid transit line could be in service is 2010. Bird is scheduled to complete a cost/benefit analysis by the end of March.

The current study is being funded jointly by the federal government and the Vancouver International Airport, which is keen to have a rail-based rapid transit line connecting it to downtown Vancouver. The federal government and the airport contributed $250,000 each for the six-month study, which is trying to determine if there is community support to build a rapid transit line and whether there is the potential to fund it.

The airport is so eager to have a line built that it has even agreed in principle to contribute to the construction costs, though exactly how much as yet to be determined, Bird said.

The study will not delve into the contentious issue of selecting the route or the technology.

Agencies involved in the study include the cities of Vancouver and Richmond, TransLink, the Vancouver Port Authority, the Greater Vancouver Regional District and the provincial and federal governments.

A completed deal would present a unique opportunity for the companies involved. Very few large-scale public-private transportation projects have been built in Canada. Two notable exceptions include the construction of Confederation Bridge linking Prince Edward Island and New Brunswick and the tolled Highway 407 in Ontario.

However, transportation projects using private sector expertise in design, construction and financing are widespread in the U.K., South America and Australia, says a report written by Bird and Richmond city staff.

For the Confederation Bridge financing formula, the federal government agreed to pay $41.9 million a year in subsidies to Strait Crossing Development Inc. while allowing the corporation to make money from toll booth revenues.