British Columbia’s Richmond-Airport-Vancouver (RAV) rapid transit line will cost $92 million less as a public private partnership than it would if it was done by the public sector, says a new report. But the prediction is based on questionable rider projections.
Canada Line Rapid Transit Inc. – formerly Ravco – says it expects 100,000 passengers a day to be riding the RAV line by 2010. The line is due to open in late 2009.
“I believe this is the right contract for this project for this market,” Canada Line Rapid Transit chief executive Jane Bird has said. “And I believe that it does create value for the taxpayers.”
But if revenue from riders falls short of projections, the government and taxpayers will have to make up the shortfall.
Under the terms of the P3 agreement, the RAV will be built and operated for 35 years by InTransitBC, a partnership of SNC Lavalin and several major pension funds. TransLink – Vancouver’s transit authority – bears 90 per cent of the risk of a ridership shortfall because it controls most of the factors that determine how many people will use the system, including fares, feeder bus service and marketing.
Strelioff, whose office reviewed the plan, has cautioned that the ridership numbers used to tout the cost savings involve “significant known and unknown risks, uncertainties and assumptions.”
He added that “actual results and future events, in particular ridership and ridership revenue, could differ materially from the results discussed or implied ”in the final project report.
The higher ridership forecasts for the P3 project were mainly due to several changes in the original plans, including stations that are closer to the surface, more trains between rush hours and alignment changes at the airport and in Richmond.
Asked whether a public project could not have boosted ridership through similar moves, Bird is quoted as admitting that it was possible.–with notes from the Vancouver Sun