The more we learn about the details of a P3 light rail project in Montreal, the clearer it becomes that it’s a train wreck when it comes to the public interest.

The Réseau électrique métropolitain (REM) is being planned and partially financed by the Caisse de dépôt et placement du Québec, which manages the funds of the Quebec Pension Plan and other pensions. The Caisse will own and operate the system on a for-profit basis.

CUPE Quebec has been a vocal critic of the project since it was announced, arguing the profit motive will overshadow the public interest and environmental concerns. CUPE’s brief to the provincial government agency holding hearings into the project warned that the REM could only be profitable with significant public subsidies.

New analysis of the Montreal light rail project shows the public will be financing an even bigger part of the P3 project’s profits than originally expected.

La Presse has analyzed the Caisse’s most recent reports on ridership and fares, as well as the budgets of existing regional transit authorities. Working with two public transit experts, the newspaper predicts that the Caisse’s expected profit falls far short of what the light rail project will generate.

Using a rate of return of 10 per cent – a yield the Caisse has demanded elsewhere – the annual profit on the pension fund’s $3.1 billion investment would be about $300 million. But best estimates of the REM’s operating profit are only $66 million, leaving approximately $240 million unaccounted for.

The result: the public will be expected to make up the difference, likely in additional payments made by municipal and provincial governments, as well as riders. The Montreal Gazette is also reporting that the Caisse will charge the regional public transit authority a per-passenger fee, in addition to direct fares paid by riders.

Federal finance minister Bill Morneau has said the REM is “perfectly suited”  for funding through the Liberal government’s infrastructure bank.

In reality, the project is a prime example of everything that can and will go wrong with having private finance control public infrastructure. Some proposals for an infrastructure bank could give private, for-profit investors – including pension funds – unheard of control over our public infrastructure.

The total project cost has risen to $5.9 billion, from an original estimate of $5.5 billion.

CUPE Quebec is part of the Trainsparence coalition opposing the REM.