The Dangerous Trend Taking Over Transit Construction | Public-Private Partnerships

[@otterylexa4499]

To me, PPPs means private takes the profits, public takes the risk. Politicians always sell it as saving money but it's borrowing money at a bad rate without having borrowed money on the books. If the project was genuinely going to make money, the private sector would build it without the government underwriting the risk.

[@RMTransit]

Part of the problem is that the public has made a late or delayed or over budget project extremely politically dangerous too!

[@diedampfbrasse98]

@@RMTransit hardly, the consequences for running a public project over budget or against the wall are laughable, thats why it happens so often without anything of note preventing repetition ... Almost always its just exchanging chairs in public institutions while offloading all the damages on the taxpayer, worst case is leaving office and enjoying a nice chair in the private sector while having a pension on top. And even rarer are actual legal consequences for those in politics as there only is the option to sue the public office for damages, and that is practicly sueing yourself (the citizen) as all compensation would be coming from the taxpayer. Losing some points in an election is not a danger, its what politicians / parties go through naturally and its only their voters interests who suffer in such cases. That being said, ever since politics made it a habit to bail out private companies which run something even remotely essential the difference for the taxpayer seems to disappear. In the end the common taxpayer is the only one really running an actual risk. Which is fair tbh ... the ignorance, docile compliance and refusal to make real changes as a voting citizen practicly excuses all what is going wrong with infrastructure projects.

[@Blaze6108]

AFAIK 90% of the reason these are undertaken is that governments (especially local) don't want a minus on their balance sheet, so where you would normally need to issue a bond as in debt, a 3P allows you to hide the expense by billing it as a part of a totally not at all expensive 'free market contract'. You're still spending THE SAME MONEY or more, just in a way that doesn't pop up the word 'debt' on the news, so that you will be safe from the gaggle of neoliberals and 'economists' who will see a minus and screech about communism and irresponsible big government waste. Also useful if your country has 'debt brakes'. This is, of course, an issue in and of itself, because it evidences how governments are so unwilling to spend for extremely basic and highly worthwhile projects - that already do make money in the end (otherwise the private sector wouldn't sign those 3Ps!).

[@martytu20]

Politicians get the bribe, private takes the profit, public takes the risk.

[@TheNewGreenIsBlue]

There CAN be truth in that... but in many cases, the lines become political... this neighbourhood protests their local political rep to get a station or an extension, or to have the line avoid their neighbourhood, or gold plating happens with elaborate stations or additional view mitigation (for above ground lines), tunnel portal complaints, etc. etc. While under construction, the Canada Line was protested because it was cut n' cover.... however it's easier to protest and get money from an gov't through an elected official than to go through courts and sue a private company... so it can be political protection in some ways as well. Also, the Canada Line was pretty controversial at the time. A P3 on Burnaby Mountain for the SFU gondola may also have worked... but it seems the region wants to move ahead on that project anyhow. For a private company, they're looking, not at immediate profit, but at 30 years of sustained income. SOME companies look at the balance sheet and can do that. An elected official USUALLY only looks at the next election cycle. In short, politics is what often handicaps local governments from building a project efficiently and P3s take SOME of the politics and blame OUT of the hands of the government.

[@JohnUnit]

my mother was in both the political and public service part of government, both federally and provincially for about 3 decades, often being in the room for high level policy and implementation. She's always said she NEVER saw a p3 save money, but did see lots of hints of corruption between the political people and the companies that just happened to get the deals. See also: "consulting"

[@Blaze6108]

The funniest thing about this is that after it became quite clear that 3Ps cannot save money almost by definition (guess who has the ability to almost infinitely raise capital and who doesn't...?), a bunch of consulting firms began printing out studies that talked about much more malleable concepts like 'value for price' or 'risk management'.

[@fernbedek6302]

The 'good old days' were when various private sector companies tried to undercut each other building redundant infrastructure, oversaturated the market, went bankrupt, and then got nationalized. XD

[@yaush_]

They went bankrupt because of car development. Railroads were some of the most successful companies. Edit: ok guys😭 I get it there are a lot of railroads that have failed. But guess what there are also a lot of grocery store that failed and we aren’t talking about how the grocery store industry is disaster. Competition in the railroads was a good thing and railroads failing isn’t bad for the general populace. It gets bad if the railroads never fail and form a monopoly. The advantage of publicizing rail is that the networks can become more efficient and the customers can pay less. The private passenger rail industry did not go bankrupt in the US until widespread use of the car. As we all know, that’s why Amtrak was formed, to purchase the bankrupt railroads to keep some service left.

[@fernbedek6302]

@@yaush_ Depended on the lines. Plenty went bankrupt in the 1800s during various waves of rail-mania in different countries.

[@katrinabryce]

@@yaush_ In the UK, the bankruptcies came long before cars became popular.

[@memunist5765]

​​@@yaush_In the Netherlands the rail companies became unprofitable at the end of the first world war. The car was way after that.

[@RTSRafnex2]

​@@yaush_ In Switzerland, nationalization happened in 1898 following a referendum.

[@tompuckeridge]

Sydney's Kingsford Smith Airport line ticket costs changed some time ago, the non-airport stations no longer have higher ticket costs than the rest of Sydney trains network, the government renegotiated the way these charges were paid to the private operator for the non-airport stations a few years back. Since then patronage has increased 70% through those stations.

[@rogersexton7857]

Thanks Reece. Brilliant video. As someone who was a trained lawyer I particularly note two things you said. At about eleven minutes you say, 'Writing solid contracts and winning legal battles seems to be a lot of the game with P-Threes' A little later you say '[We should be] learning best practices in innovation and creating new station designs [rather] than employing a ton of lawyers.'

[@billythorne]

Meaning?

[@robertheinrich2994]

@@billythorne I guess: employ good lawyers on the public side to ensure, that the contracts are good. this will save you a ton of money in the long run and will scare away private entities, that are on the more shady side.

[@LoneHowler]

There's times lawyers are needed and times they are not. Yes it's important to get solid contracts, but having constant interference from outside entities NIMBYs lawyering up that causes delays and rising expenses. If the government sets rules on what can be challenged, when the challenges can be brought forward etc it could streamline the process

[@CyanideCarrot]

Billable hours wins yet again

[@RMTransit]

Thanks for watching Roger!

[@charliebramley]

London's HS1 was private partnership, and now it's really expensive for trains to run on the track

[@gelber_kaktus]

Isn't UKs whole Trains system currently nearly completely private partnership and because of that pretty expensive?

[@BrodieChree]

Urban enshittification

[@grassytramtracks]

​​@@gelber_kaktus yes, it is. The new Labour government are going to nationalise the franchises as and when they expire, but won't renationalise the rolling stock companies who are amongst the ones taking the biggest cut

[@oldtechnobodycaresabout]

As a local can confirm. its a £5 surcharge to use it

[@oldtechnobodycaresabout]

@@gelber_kaktus yes. but HS1 is worse

[@euanduthie2333]

The UK's P3s should be enough to scare anyone else away from the model. They've ended up delivering badly built projects, at an eye-watering cost, often with contracts locking the country into paying for them for 30 years. On top of that, the push to privatise everything has led to a hollowing-out of the state's capacity to take on this sort of project, and treating everything as a new contract means that you don't build up the expertise that controls costs in the long term.

[@mark123655]

Some work, some don't. Just like if the government took all the risk.

[@jamesphillips2285]

@@mark123655 Government takes all the risk anyways!

[@kaitlyn__L]

Part of the issue I think is that almost everything in the UK that people are aware of here are PPP/PFIs that did involve getting private companies to operate and maintain originally state-built and state-maintained infrastructure. And those examples have led to cases like schools being charged 100x more to mow their lawns while getting them mowed only one-quarter as often. Or all the chaos in the 5? 7? years the London Underground was operated under a PPP. I also think having ownership revert to the state is another key factor. Projects where ownership does not revert to the state, and where the private companies did not build anything, are clearly a bad deal. They usually try to pretend they'll do big signalling or rolling stock upgrades, but these have rarely materialised in the UK. I must admit it was a surprise to hear about them working well in Canada. It does sound like the terms are remarkably different though. Mostly just giving the company 10-15 years of profits before the government takes it back, to save the government having to borrow the money to build it. Versus paying the companies state money to operate infrastructure the state already built, at an inflated rate. (We're only just starting to get back to political discussions about city governments being allowed to _manage_ their own transport networks. Let-alone _own_ them!)

[@Eric_Hunt194]

PPPs have a very bad name in the UK after the ill-fated scheme on the London Underground. This involved the network being split into three operating sectors: SSL (Sub-Surface Lines, i.e the Metropolitan, District, Circle, Hammersmith & City, and East London lines); JNP (Jubilee, Northern, Piccadilly lines) and BCV (Bakerloo, Central and Victoria lines, with the Waterloo & City tagged on). These were then contracted out to various consortia to operate, maintain and upgrade on something like 30-year leases. I think the whole scheme just about made it to five years before collapsing in on itself, though my timeline might be a little bit off. It's worth looking into though, if only as a guide of what not to do!

[@jerrytwolanes4659]

Sorry I got here late. I was watching the european tram driver championship!!!

[@RMTransit]

The greatest sporting event of all 🎉

[@eve-marie6751]

They do it in a big coliseum, driving bumper cars, dueling incessantly like gladiators until the biggest and baddest driver survives and wins:- hmmm perhaps that's the bus drivers' event. For the tram-drivers they have a double track and two drivers at a time race against each other:- no that's wrong, it's more like a slow-race to see who can go the slowest and at the end of the day they all go to a secret place called "Not in service" and have a big party just for tram drivers. 😂

[@Ra0s]

The Valley Line in Edmonton would be another example of things not turning out so well with a P3

[@HandiTransport]

A lot of UK PFI schemes were conceived just to have the debt not on the government accounts to comply with EU rules. The whole thing was badly thought out and the contracts badly written with all the risk applying to the government and the profit went elsewhere. I'm not totally against using partnerships but the government is usually easy to bamboozle and the final contract doesn't give value for money. That said building anything in the UK usually goes well over budget and is delivered late, sometimes decades late.

[@barvdw]

Yes! I blame accounting rules that don't make a lot of sense, big investments should be able to be written off over time, but the EU is a bit too obsessed with budgetary orthodoxy, even if it increases the cost over time. The Dutch HSL Zuid and the Brussels Airport Diabolo project are the ones I'm most familiar with.

[@Eric_Hunt194]

Fun fact though- HS1 is mentioned upthread as an example of an expensive P3 project... but the construction part was completed on time and under budget!

[@pcplayerclarkey3026]

Honestly the Eglinton LRT should have just been an underground subway line given how many years it has been consuming; plus the length of the line itself is pretty long for a LRT

[@LuckyAtom-dx5yf]

Not even close , Netherlands claims that

[@eve-marie6751]

​@@LuckyAtom-dx5yf Yeah, those Dutch folks are so much better than us, we can't even excel at being grossly inefficient! 😉

[@mygetawayart]

I read the Italian case from the Transit Costs Project. Milan's M4 and M5 are a great example of a PPP-DBFOM done right, with in house expertise, standardized, practical station designs, good public sector oversight, strong political dedication and a local company that's entirely dedicated to the designing, building, operating and maintaining of the lines of the entire system. Costs are low and the lines are built quickly. Rome's Metro C is instead a good example of the opposite. The project is funded in a Design-Build scheme, based on a preliminary project that failed to assess the risk of delays due to archeological finds that forced radical changes in some stations and massive station infrastructure to accomodate them in others. The procurement process wanted to shift the risk onto the private sector, eventually backfiring onto the public when the risks became realities (and the General Contractor can't do anything about it), the future of the complete line was questioned and the political will behind the project (aswell as the public's confidence in it) came and went. Not to mention, the uncertain future of the line is also due to the fact that it's being built in sections instead of all at once, making it more appealing in the short term but FAR MORE EXPENSIVE in the long term. Between 2007 and now Milan was able to begin construction and open two brand new metro lines, for a fraction of the cost that it took Rome to build half of a single line (utilizing existing infrastructure for part of it) at an exorbitant cost.

[@rodrigomenegucci]

Milan is a great case, but they awarded the 3P mostly to themself (the city, the transit agency, the national railways, the city public engineering corp 'metropolitana milanese'..)

[@mygetawayart]

@@rodrigomenegucci for M5 the split is about 60% public/40% private, whereas for M4 it's about 67/33

[@rodrigomenegucci]

@@mygetawayart and all the wise design choices came from a strong, well funded and staffed, public sector

[@gabrielebianchi8976]

Regarding Milan MM4 and MM5, I have to say however had to renounce to quite a lot, the two lines have few interchanges, and when there are built in such a more architectural-financial friendly position rather than in a user-friendly one. Another aspect are the finishings which are nothing but the ones we were sold with the renderings, ten years after opening with wall tiles and floor tiles ckraked, non-color matching and rusting handrails turn pale if compared to the 50+ years old ones of the iconic MM1.

[@mygetawayart]

@@gabrielebianchi8976 M4 and M5 are definitely designed for practicality over style

[@whophd]

“DBFOM” has had different names over the years across the countries. In Australia in the 2000s it was “BOOT”, Build Own Operate Transfer.

[@MaxS-hn8we]

Fun fact: The public-private partnership on Sydney’s airport rail link will end in May 2030 at which point the infrastructure will belong to the state government and the station access fee is expected to be removed

[@mark123655]

We shall see.. personally think the Govt will find some excuse to keep a fee (maybe slightly lower) much like we never got rid of tolls on the Harbour Bridge or Tunnel when they were paid off (and now the WHT under construction). Wouldn't be surprised if we end up with say a $5-10 gate fee at either SYD or WSI so treatment is equal.

[@seanrodgers1839]

I think that the real problem with the P3 is the lack of accountability. Each party can blame the other when any serious problem occurs, which they do in large infrastructure projects. Hence all the legal issues, rather than focussing on the project. When no one takes ultimate responsibility things can slide and be less effective. The buck needs to stop with someone, rather than being​ passed around. Just look at Ottawa.

[@TheRealE.B.]

Good or bad, it can't be ignored that part of the reason public-private partnerships are popular is that the managerial bureaucrats who like to spew meaningless jargon they learned in business school think "P3" is fun to say.

[@DatMeleeMan]

the sydney airport link actually only has fare for the two stations attached directly to the airport and not green square and mascot. a lot of people actually just get off at mascot and take a bus into the airport to avoid the fee (which i agree is terrible but the agreement with the company will expire in the distant future at least)

[@gusbus265]

Mascot and Green Square used to also have the same access fee on top of the existing ticket price. However the government removed it at these two non-airport stations about 10 years ago and compensating AirportLink the difference. Now the government collects so much money from the access fee at the two airport stations, that after paying AirportLink their share, the government makes a profit each year in excess of a hundred million dollars!

[@katrinabryce]

In London, you can save a lot of money on your journey to Heathrow Airport by getting off at Hayes and taking the Superloop bus, or getting off at Hatton Cross, and getting back on the same line using a different payment card.

[@juhan966]

International is a 25-30 min walk from Wolli Creek station. Mostly through a park even. The station access fee is an absolute ripoff.

[@TheMl145]

@@juhan966 I feel like the advantage in Sydney is most people are coming off long flights so people will pay it. I've flown from Canada to Australia. After a 14 hour flight I just want to get to my accommodation.

[@RMTransit]

@@gusbus265what if you work at the airport? Do you have to pay the fee?

[@whophd]

Well done on pointing out that no project is 100% public or 100% private.

[@MorseAttack]

P3 do have the advantage of depoliticizing decisions. CDPQ awesomely refused to build a lot of parkings around it stations, that the government was demanding.

[@Diego-pc4rc]

In sao paulo the new privately operated subway lines have free transfers onto thr network, but the pay is structured in such a way that if you do trasfer the city ends up paying more to the company then they receive from the fare

[@vcostaval]

actually you dont even need to transfer for the public operator to be required to pay the extra fare to the private operator. if the private company does not meet the profit quota set on the P3 contract, for whatever reason, like low ridership, the public operator is legally required to cover the difference with its own funds, so yeah even if no one used the private operated lines the companies operating them would still profit from it lol and the worst is the public company now has to deal with a gigantic whole in its finances, where before it has always been financially self sufficient, and therefore maintenance and operation are severely impacted from all of this. then of course the problem according to the average political discourse is that the problem is the unneficient nature of public services, and how the public system is a liability for the state goverment, and that it should be privatized, and how good the private lines are....

[@tl8211]

@@vcostaval And note that the private Metro lines are all relatively new and highly automated. When the same guys took over a CPTM line, the results were (and are) disastrous, with several times worse KPIs than the (already pretty bad) results of the CPTM.

[@RMTransit]

Fairly common unfortunately

[@kurttosczak8544]

For a potential future topic, Calgary has cancelled the green line because the province cancelled the funding. As a Calgarian this makes me furious.

[@unreliablenarrator6649]

Successful Exemplar: Hong Kong's MTRC, which has even won projects across the border in China because it is so professional and profitable.

[@NickBurman]

It's worth pointing out that many 19th century "private" transit schemes were in fact P3s. It's just that nobody at the time referred to them as such. For instance, the first sections of the Paris Metro were built under a contract between the city and the "Compagnie du Chemin de Fer Metropolitain de Paris" (CMP), controlled by French banker Édouard Empain; the agreement was that the city would build and finish the stations and tunnels, while the CMP would lay track, electrical systems, purchase trains and run the service for a set number of years under a concession. The same for New York City, where the city built the subways in Manhattan and parts of Queens and Brooklyn, then leased them to IRT and BMT for operation. It was only with the IND that the city became both owner and operator. Some Japanese commuter/transit lines, especially those which wander into a different province/city from where it originated, are P3s. Off my head I can think of the Saitama Rapid Railway, jointly funded by municipalities, Saitama Prefecture and Tokyo Metro (which despite being a limited liability company is half owned by the central government and by Tokyo Metropolis).

[@RMTransit]

They were not structured the same way as modern P3s, so I wouldn’t leap to comparing them

[@My-nl6sg]

@@RMTransit it'd be nice to have a video comparing them

[@robertthomson1587]

The 'station access fee' on the Sydney airport rail link applies only at the two terminal stations (Domestic and International). It does not apply at the other two suburban stations (Green Square and Mascot).

[@mark123655]

Now.. from 2000 to 2011 there was a fee paid by the consumer. Usage of Green Square went up 70% when it was removed by a new agreement. The Govt still pays a shadow fee which is afaik effectively part funded by the Govts share of the airport fee. (Indeed given growth I believe the Govt may currently be paying a subsidy) Line reverts back to full Govt ownership in 2030 and Govt recently funded the new second entrance at Mascot

[@robertthomson1587]

@@mark123655 Indeed, 'now' is the operative word. The information in this video is years out of date.

[@RMTransit]

Something which existed for over a decade and still exists (albeit in the background) is absolutely relevant to the topic of P3s

[@ih-jao]

In São Paulo PPPs are terrible. First, all the money for the transit system goes into a single pot, and the lines under PPP get first dibs on the money and also get a higher amount per person than the actual fare. The okes still under the city/state don't get enough money and the issues caused by that are used as justification to further out then under a PPP. They also have basically contractually guaranteed profit, so during COVID the government had actually to give them money because of the lack of passengers.

[@WilliamChan]

I think public financing almost always needs to be involved in some significant way since you would still want to keep building transit at a consistent rate, as opposed to the feast-or-famine pace we see with the housing market.

[@ricequackers]

The bit about "trying to privatise the risk" reminds me of HS2, where the government insisted on having zero risk contracts where the private company would shoulder it all. Well, just like an insurance policy with zero excess payment for a claim and unlimited claims, this turned out to be very expensive as the companies set a high price if the public sector wasn't ready to shoulder even a small amount of the risk. That's one of the reasons why HS2 became so expensive.

[@desanipt]

The first high speed train line in Portugal between Porto and Lisbon should start building this year. It will be built and mantained for some decade through a PPP, while the day to day management of the line (assigning train time slots and all that) will be done by the national infrastructure management company. Whishing it works decently this time (when the Madrid-Lisbon line had strated being built, the project was paused because of the 2008 financial crisis), given that the PPP makes the project a bit more independent from public money.

[@KyrilPG]

Will it be a true high-speed line? (300-320 km/h). Or just a "higher speed" line?

[@desanipt]

@@KyrilPG The commercial speed will be of 300 km/h. Meanwhile it will be built using Iberian gauge (same gauge as most convencional rail in Portugal, to allow to serve central stations on the convencional line and hybrid services off the high speed line, wouldn't the need for gauge changing trains). With the infrastructure being prepared to change the gauge into standard gauge when standard gauge lines get to the border from Spain eventually

[@nyxw]

I think construction is due to begin early next year. One of the contracts for the first phase hasn't been finalized yet, unless Construction Package 1 (Awarded to Mota Engil) starts first.

[@estrheagen4160]

In my opinion, combining the design and build steps makes sense, purely because getting all the necessary paperwork done is a lot easier for a single company than a sprawling government. Financing, operating and maintaining... Not so much. Turning to roads for a moment, the Istrian Y second carriageway in Croatia was a DBFOM. Tolls there are twice as expensive per kilometre as for the rest of the highway network.

[@MrLukealbanese]

This is a very good video Reece. We invented the PPPs in the UK Transit industry about 30 years ago and I've worked on a number of them. Its notable that they have completely fallen out of fashion now, especially in transit - a friend of mine who is a seriously top contractor and was the CEO of a couple of colossal transportation PPPs explains it like this - "there is never any limit to how much promoters (and contractors themselves) overestimate the Contractors' ability to handle risks'. I've seen some classic disasters, although also one or two successes, but as you so rightly say, there is no free lunch.

[@naso_g]

Good take, if gov bodies took the time to retain personnel with project knowledge the cost of building new projects would go down every time.

[@ClemBreadEater]

Great video to better explain what happens with P3 projects in Canada! I’ve worked on a few of these projects myself and it’s really frustrating the lack of education the government provides to better inform the public. I’ve worked on multiple sides of these contracts and there are a lot of hardworking people who actually care. Unfortunately, projects like the Ottawa LRT and Eglinton Crosstown LRT really put a bad name on these types of projects.

[@KevinT3141]

Definitely one of your best Reece!

[@entized5671]

this video is going to be the best take this channel has ever had, I can smell it

[@LS-Moto]

@RMTransit as the video got uploaded, I just saw that there is a livestream of a european tramdriver championship in Frankfurt going on. Yes, this exists. How cool is that. I think RMTransit should look into that.

[@CitiesForTheFuture2030]

I'm watching too. The fun side of public transit - who knew! Hopefully there'll be a world championship one day...

[@katrinabryce]

Yes, I've just come here from watching it.

[@CitiesForTheFuture2030]

@@katrinabryce What fun! It was great to see such a great crowd enjoying all the action...

[@crowmob-yo6ry]

Why does no one on the internet ever use a question mark?

[@RMTransit]

It’s a yearly thing IIRC

[@Lucaat]

I am not against private business or a product or service that is valuable plus turns a profit BUT I dont think this model is good for: 1. Public Infrastructure 2. Public Transportation 3. Healthcare 4. Housing (or neighborhood planning). (Free market for profit real estate can be great in the right places, but not everywhere, a mix of cooperatives, social keeps rents and prices down). In these instances, livability and well being does not go hand in hand with the most $$$ and it shouldnt either.

[@AnotherDuck]

I would add police, fire, and other emergency services. Things that are for public safety and it's morally corrupt to price gouge people for.

[@Lucaat]

@@AnotherDuck yes, true!

[@gabrielebianchi8976]

I think that in all those sectors there should be always a mix because of the cost and price dynamics. Privates have the incentive in reducing costs (being efficient) but being a licenced monopoly have no incentive in reducing prices. Public companies have political pressure to reduce pricing but no incentive to reduce costs. If both are allowed to exist the private sector will pressure public institutions to reduce costs, while the public sector can undercut the privacy sector as soon as excessive costs (and profits) are made.

[@AnotherDuck]

@@gabrielebianchi8976 A licenced monopoly can be private. It's also false that there's no incentive to reduce costs for public services. You can just as well argue that private operations will lead to a hollow service that does the bare minimum for maximum profit. But in most of these cases, you don't have a choice as a consumer what to purchase. You usually can't choose which public transit service you want, since there's only one choice most of the time, and there just isn't room for more.

[@RMTransit]

Private involvement will always exist in these places, it’s just important that the right structures and regulations are implemented so you get good outcomes

[@u1zha]

6:29 Disagree that they function just as well :) Cut-and-cover tunnels function better than deep level tunnels, because getting to a shallow station from street level is faster and more convenient. Less burdensome transfers = more ridership.

[@dznrboy]

Eglinton Cross Town is a prime example of why P3 does not work, 13 years to build a line with no ending in sight, and budget overruns and lawsuits are ridiculous. Metrolinx has made it so that the TTC has no involvement in any decisions or any input whatsoever.

[@BrodieChree]

Yep, and if one of the wealthiest parts of Toronto can't afford it or pay enough to complete the work just imagine how easy it is for Hamilton or Kitchener-Waterloo or Fake London? We just don't get things or need Google money to complete them. It creates transit have-nots all so Toronto can. Same old knee-crippling fake competition the GTA has been doing since the 1940s. Ontario sucks.

[@RMTransit]

I discussed it in the video, the projects problems are more related to its structure

[@spartancanuck]

It's one of those things where the choice is often out of the hands of the municipal government. Any mass transit project in Edmonton since the completion of the Capital Line to Century Park, for instance, has come with one or more of the senior funding parties making funding conditional upon a P3 model being used. This made our options with the Valley Line, "Do we go P3, or do we not build it at all?"

[@allenm.5363]

Vancouver's Canada Line also has an Airport surcharge, which sounded similar to what you described of the Sydney Airport service.

[@RMTransit]

It’s not, because it only applies to the airport stations

[@garritorious7587]

In Sydney, currently only the stations in the airport charge a surcharge. Green Square and Mascot suburban used to but not since 2011.

[@collarsncolours]

Canada's problems with transit is moreso due to lack of competition in construction. The oligopolies have no reason to do better and practically benefit from doing things slowly & poorly so that they can continue to get paid to address their own defects

[@RMTransit]

I don’t agree, we had construction oligopolies before

[@karl4824]

As a Systems Engineer P3s are very tricky and complex to execute. My boss use to work for Edmonton Transit earlier and we all know how big of a mess P3 was for Valley line west in Edmonton. Always a tussle between city employees and private company on who's right and who's wrong. A typical blame game scenario

[@jordanroyer5702]

Ok pretty good video! You get at the performance vs prescriptive specs pretty well. I would say the best way to describe P3s is really about risk transfer. Each ‘letter’ you include, you transfer that risk over to the private sector. The idea is that the private sector will bring more innovation and efficiency to more than cover the higher costs of capital. That’s the value for money equation. In short P3s are neither good or bad - it’s just about if it’s the right tool. I think you hit that well. The less room you give the private sector to innovate (prescriptive specs) the less likely they are to cover the costs of the risk transfer. Interestingly, in Canada at least, the idea of P3s in transit is out of fashion and has been replaced by DBs, target price and alliances.

[@roberthicks2191]

My experience in local government says that P3s can offer some sleight of hand advantages in moving some financing and debt costs off the immediate public ledger. They seem to be mostly ideologically driven.

[@LexusLFA554]

Don't know if you will mention it but a company called Go Ahead tried taking over the Augsburg Munich area, which was heavily neglected by the Deutsche Bahn. It didn't go so well. Now the company is called Arverio, and belongs to the austrian Bundesbahn ÖBB.

[@drdewott9154]

God. Just god. Also this feels surprisingly relevant for me. Long comment ahead Reece just fyi. We dont have any P3's for rapid transit in Denmark per say, but the Copenhagen Metro basically acts like a P3 while being entirely public. And not always in a good way. The politicians come with wild goals like wanting specific destinations or districts to be served, often in ways that seem counterintuitive, and the entire financing hinging on paying back loans to the government with fare revenue and real estate deals as part of construction agreements. Either you get massive overcrowding like on line M2, or you alternatively get lacking ridership like on the M3 metro. Heck ever since the M3's opening, there has been a surcharge on most trips to use the Metro, which is also very unpopular. Especially as the city's long established bus (and former tram) corridors have been twisted around to force people to transfer to the Metro as much as possible and forcibly trying to inflate ridership. Heck with the M3 underperforming on ridership, municipal politicians are now thinking of doubling down on bus short turning to create less direct trips and force people to transfer to the metro for more journeys and just... URGH! I HATE THIS! And speaking of the M3, that whole lines allignment as been a mess. Its a circle line but theres often just 2.5km in diameter from one side of the loop to another. So why even go on the line to go from one district to another if its just faster to bike. And the line became the way it is because politicians, especially on the right (who have been the most pro-metro) wanted to fufill promises of Metro service to every central distrct. Even if said metro service isnt very practical to people. It has been tampered with to fufill misguided political promises, rather than actually serve the city effectively. And now with the proposed M5 line, primarily meant to serve the artificial island project of Lynetteholm, while the Metro company initially came with reasonable proposals, politicians have since then tampered with the line, forcing it off of busy choke points to serve other districts, settling on a less effective allignment that doesnt serve key downtown destinations at all, and bloating it with other stuff, and the economic prospect for the line now looks terrible, yet the politicians have sunken too far down in the mud to back out now. And if peer pressure from Nimbys to dig it in bored tunnels to not disturb a tiny bit of greenspace cause it to actually get tunnelled even more, its over. It doesnt help that the citys politicians are seemingly high on metro crack and still studying massive expansions that would likely take half a century to even complete and desiring oddball metro routes to every district, even if the allignments are ineffective. At least they realize the current financing cant work, but they also dont have the financial means to fund such expensive projects at this rate on their own, especially while also lowering taxes and having obtuse national laws that limit their budgets and hinders their income from the likes of paid parking, which basically kneecap the city government. And sadly alternatives like Light rail are more or less off the table, even if there are several cases where trams would make more sense than a fully underground bored metro with scribbly lines that look more like a 5 year old drew on a piece of paper.

[@wyldhowl2821]

We have a similar problem in British Columbia with our ferry system (BC Ferries). Not a PPP but acting like one as a matter of corporate ideology. Years ago a right wing government decided it was time to "run it like a business" turning it from a public agency to semi-privatized, with American business guy imported to run it. What a disaster, as the fleet decayed, service became both more expensive and less reliable, and employees began to quit and not be replaced, because the ferry "business" started treating the crew members as on-call employees, rather than hire them as full-time permanent staff. They also had some new large ships built overseas for low cost reasons, that were unreliable "lemons", needing full engine rebuilds only 1/4 into their service life. That government eventually got thrown out by voters, but by then the ferry service was in ruins and ships cancelling sailings every other week. It was a hard fight for the next government to turn the situation around to normalcy, but they still have not made it a fully public agency. The whole purpose behind the semi-privatization was ideology, but they forgot (or ignored) the history of BC where BC ferries was created as a public agency because private business had up to that point failed to give the citizens the level of service people actually needed.

[@EduNauta95]

PPPs are best for trams and light rail. Here in Barcelona they made the new tram lines like so. However, full on metro lines and HSR are just too important and expensive to depend on a private company with profit seeking attitudes.

[@katrinabryce]

It was a complete disaster on the Edinburgh trams, partly because the supplier left them with a half-built project and a load of legal disputes.

[@RMTransit]

I don’t agree, they are problematic everywhere

[@EduNauta95]

@@RMTransit the issue is that Barcelona is, electorally speaking, one of the most lefty cities in the world, maybe the most one, you can check the results of the municipal elections. So, the amount of public scrutiny that the concession firms had was inmense, i follow barcelona politics daily since 15 years and this issue always springs up, rallies, etc

[@catprog]

Here in Brisbane the airport line is run under a BOOT schme (build, own, operate, transfer) Although it actually is run by the public operator under a contract with the copearion. 2036 is when it get transfered back.

[@SmallSpoonBrigade]

I think the clear answer is that it depends. Hong Kong's train system was dug by the government and service is now done by a private company. There are major files for service problems and nearly everybody gets where they're going within a few minutes of when the schedule indicates they wlll.

[@staryoshi06]

Thankfully, sydney's airport link no longer charges extra at mascot and green square. Only for entering and exiting the airport stations. Still sucks though.

[@RMTransit]

Yeah, because people work at airports!

[@msyoungau]

​@@RMTransitI think most of the workers either get off at Mascott or Wolli Creek and walk to the airport.

[@mark123655]

Not to the end consumer.. there is still a shadow fee being charged to the Govt

[@erkinalp]

@@msyoungau is that even allowed?

[@msyoungau]

@@erkinalp They've been doing it for awhile

[@williamdixon4936]

Were the Tokyo Metro and Toei Subway P3's? I think supreme leader notjustbikes made a video (with Tokyo as the example) about how letting a rail company own the land near its stops was a recipe for successful rail networks.

[@rislingpodiumperformance]

Just ask us in Ottawa how terribly the P3 has gone or that Eglington line. Its been a clusterfuck of delays and cost over runs and complete crap

[@BrodieChree]

Hamilton just waiting since 1979 or 2002 for rapid transit, depending on how you look it it. Don't worry: we get nothing. P3s can't be judged just on their failures, they also FAIL TO START in places that all have one feature: no pile of money for them to steal.

[@RMTransit]

Hamiltons lack of LRT is more likely due to local governance issues than P3s

[@rislingpodiumperformance]

@@tubatim oops. the 2nd g is there now for "GOD FUCKING DAMNIT"

[@alacnaythegreat1054]

Would you say that defaulting to P3s is still a case of 'building transit is still better than not building transit' or do they present a sufficient risk to the long term health of a system to justify avoiding them even at the cost of not building a new project (or at least not building it yet)?

[@TheReactorLore]

P3s are one of prime reasons why Eglinton Crosstown is delayed, and they are very micromanaged. However, this depends on the contractors and the politicians. The Canada Line is an example of a well-designed public-private partnership that doesn't funnel money into the transit agency's executives or run into corporate greed problems. In conclusion, the Private Sector optimization of the Canada Line is objectively better than the corporate greed of the sydney airTrain faires and the construction micromanagements of the Eglinton Crosstown.

[@stever4899]

Except for the equipment being incompatible with all other rail transit in Vancouver 🙄

[@jdniemand]

You mentioned the Sydney airport link - what's your take on the P3s for Sydney Metro and light rail?

[@Wpdhsx]

The Canada Line is under built! Why is the Bridghouse and YVR terminus stations both single tracked? The line will NEVER keep going southbound to Steveston and then further into Delta! It was a VERY big mistake to build the Canada line by SNC-Lavalin

[@chow-chihuang4903]

The “private” part wouldn’t be needed if those “private” interests paid their taxes instead of leveraging methods of dodging them.

[@SmallSpoonBrigade]

It's more complicated than that. For example, Hong Kong dug the subway tunnels and a private entity actually operates the service. A city can build the internet architecture in town and then contract private companies to figure out the best way to operate it under the threat of losing the contract if they don't do a good enough job of it.

[@dinoseen3226]

​@@SmallSpoonBrigadeI don't see why that would refute what OP is saying though

[@mittsverigeurbanisten]

Thank you for teaching me financial ways that shall be avoided in Sweden. I normally think infrastructure projects shall be financed by the public sector, but there are some projects like Ostkustbanan that must be at least partial a government loan to catch up with how long it has been underprioritized.

[@FurFamily-j5e]

Great explanation and analysis! Regret that we here on the DC area have another poster child for a flawed P3: Purple Line, anyone?

[@kelly2631]

The issue with (most) P3s these days is that they are publicly funded but the profits go private - there is very little risk to the company if the entire thing goes under, and yet they get exclusive control over the shiny new project funded by tax dollars for the next decade or two. In other words, it's basically highway 407 if ran badly.

[@PWingert1966]

All the same, issues exist with building affordable housing using PPP models. In the case of RGI social housing Private partners can't build it since they would never make a profit, and it explains why we have not built RGI housing in the last nearly 50 years since about 1975 (The last big push for social housing)

[@Skip6235]

I think it’s interesting that the next two expansions of the SkyTrain in Vancouver have not been P3’s (although they have been Provincial projects, not TransLink’s, and they are expansions, not new lines). I think it’s great that the interchange station at Broadway City Hall construction has been relatively smooth between the DBFOM Canada Line and the Provincially built Broadway Subway

[@RMTransit]

It’s hard to do a P3 as an extension

[@barvdw]

The main PPP example in Belgium is without a doubt the Brussels Airport through tunnel, the so-called Diabolo project. Like in Sydney, it, too, includes a fee for rail passes to the airport, with fare gates to count the number of passengers getting off, plus some other requirements (like the obligation of running direct trains to Brussels Airport), and if the number of passengers stays behind, the consortium behind them can unilaterally decide to increase the fee. Of course, there's no mechanism to lower it if successful... Luckily, it's fully integrated in the rest of the rail network, but we're stuck with the fee until at least 2047.

[@joaovitormendescerqueira6985]

You should do a vídeo on the Beijing metro. It recently surpassed shanghai's in lenght and Just became the world's biggest metro

[@etbadaboum]

Surprised REM was not added in the discussion

[@LetterboxFrog]

The Sydney Airport Train PPP is a classic case of Neoliberal desperation when the view that the market can solve anything was at an all-time high. The outcome has been a poorly designed solution where corners were cut in terms of platform design and vehicle choice (double decker trains high-floor trains and luggage are a horrible combo, and the pricing excludes many families from the service. The company had to be bailed out by NSW Government. With Sydney Airport now privately owned and making most of its money from parking, they aren't interested in fixing it either

[@jackiepie7423]

i was gona go on a rant about how P^3 is not at all new, but you popped that bubble within the first 10 minutes :(. so maybe i should take the bigger picture route. these p^3 debates are almost as old as the nation itself. Hamilton was the first proponent in his day it was the building of light houses for the sake of shipping companies. The debate got so fierce that duels were fought over it. P^3 lost. Later came Henry Clay's American System. In his day subsidizing of the Rail Roads was all the rage. The debate got so bad a civil war was fought over it. The P^3 won and the rail roads gained 14th amendment rights. But a president was lost.

[@jamesphillips2285]

The Valley line in Edmonton was a P3 because the Harper government would refuse to fund it otherwise.

[@FabiaLp]

I mean.. handing over a system of tunnels and bridges after 30 years sounds great for the company that built it, cause it will change hands right before MAYOR maintenance and repairs have to be done (bridges need mayor maintenanace after 30-40 years, same for tunnels and rails. So, sounds like a great deal for everyone, especially the tax payer.

[@FromtheWindowSeat]

Those things should have been considered and written into the contracts upfront.

[@Artista_Frustrado]

i will give shoutouts to the way Chile did it with Metro, they run it like a private company but is actually owned by the State

[@ramsesqcdsmart4155]

Was waiting for the REM in the video

[@thezenuna6307]

I'm still waiting

[@johndwilson6111]

I understand for Sydney that the Mascot station is normal fare as it was when I used it last year but the Domestic and International stations have a huge surcharge of 17AuD per Adult or 15AuD per child or senior, which is 2AuD less than 24hrs car parking. Unfortunately I can't remember who paid for the stations, whether it was the Airport or the Rail Operator. Somebody may remember, I just remember there was a big fight about it because the Australian Federal Government was Privatising the major city airports at the time.

[@mark123655]

Still a shadow fee paid on Mascot / Green Square by Govt by 2030 of about $2+/pax (usage went up 70% when the consumer surcharge ceased in 2011) Context was the Govt was essentially broke on all the other projects for the Olympics and the PPP effectively funded the stations. Govt still funded the tunnels and line.

[@jorgealbertogarridogallard3622]

Late comment. I think a lot of the problems of a bad negotiated P3 come from the fact of how well the stuff is regulated or who is the regulator. If it's just the transit agency giving some right to operate their own route, that is guaranteed it's ridership from some politician, then you're doing things wrong. In my city, we have that experience, and one that is actually a concession to operation and maintenance of the whole line. Whose fares are actually regulated as a public service, and the concession is actually paid per rider. They actually have to compete with alternative means of transportation, so they're actually have the incentives to provide good service. The other experience (a BRT, by the way) is complaining that the city didn't provide all the needs to being profitable, and they use that leverage to keep rising the fares.

[@RipCityBassWorks]

Man, picture if Toronto had built a Canada Line style service for the Eglinton Crosstown.

[@Jammer2001]

Whats your take on the newer Toronto P3s?

[@RoboJules]

I like the idea of building developers helping with station construction to serve large TOD's, like what's being done at Capstan Way in Richmond. I think the design of the transit system itself in terms of operation and rolling stock is best left up to the government. But when you consider that so much money is spent on station construction alone, and developers will utilize adjacent land to build mad amounts of housing, it doesn't take a rocket scientist to realize that there's a major opportunity that benefits both public and private interests.

[@chidaluchukwuneke9078]

Waratah Trains in Sydney is a PPP and is highly successful!

[@owenthomson4031]

Hoping you'll soon be doing something on our Green Line fiasco here in Calgary.

[@kediloaf]

Awesome breakdown.

[@patrickdougherty6390]

Look at the Suburban DC Purple Line. What could go wrong?

[@quoniam426]

Worthy of note, the original Paris metro was built by the equivalent to a P3 between the Seine Department (City of paris and its suburbs) and the private corporations owned by Baron Edouard Empain from Belgium. Yes Paris metro was built using Belgian funding ! BTW, Empain was an eccentric billionnaire not unlike the Elon Musk of the day... Tunnels and Station works were funded by Paris, entrances, amenities, superstructures, rails, power generation, trains and exploitation were from Empain companies, forming the CMP, ancestor of RATP. What are now Lines 12 and 13 (Northern part of 13) were built by a competitor (NS) entirely privately and the company was so bankrupt that CMP incorpotated its competitor twenty years later. So P3s are not new in the public transit unisverse... CMP later assimilated the Busses and Trams companies before becoming RATP, a Public organization in 1949. Ironically, if everything goes according to the EU plan, RATP will become private by 2039... Originally a P3 was chosen in Paris metro to avoid the big Rail megacorporations of the time to have an unbeatable monopoly inside the city. And also because such an investment was too much for the City's finances.

[@RMTransit]

They aren’t really comparable to modern P3s

[@anthony_chow]

Small correction, the Canada line only runs from 5 am to 1 am now, unfortunately closing before many bars close down for the night :(

[@etbadaboum]

In France PPP worked remarkably well the Tours-Bordeaux high-speed line

[@davidreichert9392]

Although I was a supporter of David Miller, I could never get behind the "Transit City" idea, which Eglinton Crosstown, and Finch West, came out of. It remains to be seen but I have huge doubts about the effectiveness these lines will have and don't address the areas where the real issues exist. They're part of the old Toronto thinking where you pick a street and just run along it and never deviate no matter how practical it may be. I'm more optimistic about the Ontario Line, which makes much more sense with respect to the route and rolling stock. Championed by Doug Ford, whom I cannot otherwise stand.

[@phil1625]

There's a big debate in Montreal on whether REM is 3P. Caisse has a return-oriented mandate and is separate from the state but its board and CEO are named by the Premier because it's a retirement fund mostly for public employees.

[@nuffaildaniaelle977]

Malaysia HSR - P3

[@matthewlittler8387]

Our public sector needs to be better equipped to build public infrastructure projects. Blank cheques for our GC duopoly and consultants. BC is currently trying to build up that capacity but who knows if that will continue under different political parties.

[@muzk3962]

In my opinion, the Eglington line was delayed primarily due to issues associated with utility relocation. Buried utility assets are owned by utility companies and at the time of the Eglington project construction, private consortiums weren't able to compel utility companies to relocate their buried assets in a timely fashion. This issue led to the passing of the Building Transit Faster Act (BTFA) which is aimed at streamlining the utility relocation process for the four transit project in Toronto: the Ontario Line, Yonge North Subway Extention, Eglington Crosstown West Extention, and the Scarborough Subway Extention.

[@BrodieChree]

Wow you'd think the P3s we paid to do that would've had a plan. Oh right their plan was to lobby and take rent the whole time and all along. It's corruption. We live in a corrupt province. People in construction just get paid enough to not talk about it.

[@RMTransit]

Even if that’s the case, the other issues all apply

[@Slevin-Kelevra]

At least with the Canada Line it was built with expansion/upgrading in mind. Which some has occured. The single track section was due to Richmond crying murder over sight lines and such. I remember them selling the different cars as better suited for people with luggage to/from the areoport cause it was wider.

[@roberthicks2191]

Huh? Expansion and upgrade in mind? Everything was scaled back, stations moved, others deleted. Its backers didn’t believe it would have the ridership it has and saw it only as a necessity in getting the Olympics. Its stations are woefully small and not easy to expand. How are they going to go to three car train sets without major station rebuilds?

[@Slevin-Kelevra]

@@roberthicks2191 the stations were built in such a way where the platforms can be easily extended when they put longer trains in service avoiding the issue they are now having with the Expo Line. Capstan Station is almost finished. Being added years ahead of projected. The project was finished on time on budget ready to go for the 2010 Olympics.

[@roberthicks2191]

@@Slevin-Kelevra Thanks! Let’s hope the station extensions will be as easily accomplished as envisioned. The amount of demand that will be added to the Canada-Line over the next decade will be huge.

[@ollie2074]

Are any of the numerous private rail lines in Japan P3's or are they something else ?

[@PromenadeMTL]

I think the biggest incentive for these 3P partnerships is the political flexibility. You can entirely avoid the public unions that most cities have in their transit systems. The benefits with public unions are such a huge problem that adding bus drivers or metro drivers is always a loosing starting point for transit expansion. In Montreal the REM will likely provide a contrast. Once the projects are built you can compare costs. The big difference will be the expensive public labour.

[@jg-7780]

Surprised the MD Purple Line mever came up. I think its a great example of a poorly executed P3 construction process, especially when you consider that the original construction contractor was able to just straight up quit after facing $800 million in cost overruns, leading to years of delays and massive blows to the budget as the project scrambled to get a new contractor. Also, if you look at the cost breakdown for the probject, its about $10 bil for design, construction, and 30 years operation (the 30 yesrs operation makes up about $2bil) but nearly $3 bil of that is just for financing!

[@leonkernan]

Very common in Melbourne. We’re still paying for projects built decades ago that should have long been paid off.

[@LetsJamFunk]

Two other important factors: (1) what is the government's track record, and (2) who is the private sector entity? 1) I'm from Sydney and early PPPs were disasters. Not only the surcharges at 12:56. Expressways went bankrupt and were bought by a single company now accused of milking its monopoly to price-gouge locals who have to 'drive until they qualify' and live in godforsaken urban sprawl. But if not for lessons learned, I don't think we'd have the protocols that enabled a transit renaissance with Sydney's new Metro and LRT, all of which are PPPs. 1.5) The video mostly cites Western/developed world examples. In emerging markets, PPPs are popular among DFIs (World Bank, ADB etc). With their experience, they set best practices, and are bringing mass transit to places where governments couldn't afford them otherwise - crucially, before auto-mania culture takes over. 2) Sydney Metro's PPP consortium involves MTR (the Hong Kong operator, which many of us may agree is a "gold standard" of metros). It makes a difference that the private sector entity knows what it's doing.

[@trnstn1]

No mention of REM in Montreal? Private Design-Build-Operate , first phase built and opened in 5 years.

[@gtoddun]

Haven't we be building transit long enough that we can do it nationally? Why do we have to have all these different systems? Wouldn't there be a huge savings in time and resources if everything was standardized Canada wide? We have unique climate concerns, lessons learned in Canadian cities can be transferred to other cities. Ottawa's new light rail having trouble in the winter is one of the most unnecessary and enraging things about it's design. A Canadian company would have known how to deal with ice.

[@michaelvickers4437]

So, TLDR; P3s serve a purpose, but ultimately cities need to put on their big boy pants and have to learn to have the political fortitude and develop the in-house expertise to build transit themselves? Disappointed that only a passing reference to Ottawa's LRT. Maybe in the grand scheme of things it isn't as terrible as people in Ottawa feel it has been. But it certainly highlights the problems of an inexperienced city and transit agency establishing unusual specs, and then just turning everything over to PPP partners who say "yeah, we can do that" when it's clear that they can't, or it can't be done as defined.