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Should private sector be in public transit?

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  • Ronald Dawson
    From http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Artic le_Type1&c=Article&cid=995234598277&call_page=TS_News&call_pageid=9683321884
    Message 1 of 1 , Jul 28 2:51 PM
      92&call_pagepath=News/News Dawson

      Jul. 16, 2001. 02:37 AM The Toronto Star

      Should private sector be in public transit?
      Joseph Hall

      There's a plan making the rounds at Queen's Park and various GTA municipal
      offices these days that would see light rail trains running between Toronto
      and the 905 regions along underused freight lines and the Finch hydro

      If this scheme sounds somewhat familiar, there's good reason.

      Similar plans have been paraded out for years now, only to join a dormant
      legion of paper solutions to the Greater Toronto Area's growing
      transportation crisis.

      The big difference with this one, which reportedly would place about 40 new
      light rail stations within Toronto alone, is that the private sector would
      largely build and run it.

      And the proposal, most details of which are being kept under wraps, is
      backed by a potent business consortium with strong connections to the
      province's ruling Tories.

      Headed by Borealis Funds Management Ltd., its backers include Tory bagman
      Steve Hudson and Toronto lawyer David McFadden, a past president of the
      provincial Conservatives.

      The $1.8 billion plan, which would likely see fast, French-built light rail
      trains run between Toronto, Pearson International Airport and various 905
      centres, is one of two being pushed by powerful business groups.

      The second, unveiled last month by the Toronto Board of Trade, would also
      bring in the private sector to help build and run a $14 billion network of
      commuter rail lines throughout Greater Toronto.

      For those who might consider these plans, however, the man charged with
      co-ordinating the GTA's transportation future has a small piece of advice:

      ``We're not now in a position to evaluate what the pluses or minuses are of
      private-sector involvement, what are the risks, what are the dangers,'' says
      Greater Toronto Service's Board chair Gordon Chong. ``We do not even have
      the capability right now of evaluating what private-sector involvement
      means, let alone what it ought to be.''

      Chong, who has long dwelt contentedly on the political right, has no
      ideological aversion to the flow of private capital into traditional public

      But without a mechanism for judging the potential benefits and pitfalls of
      private transit, he's cautioning that no move be made to favour these types
      of initiatives.

      ``It might not be the panacea that those of us on the right might think,''
      says Chong, who has pushed the board to commission a report to help provide
      an objective way to evaluate private-sector transit proposals. And an
      evaluation template is sorely needed. In any private transit scheme, two
      competing truths must be reconciled.

      The first is that almost nowhere in the world do transit systems, public or
      private, exist without significant government subsidies. In Toronto, which
      runs the continent's most fiscally efficient transit system, 20 per cent of
      the TTC's operating costs and all of its multi-billion dollar capital costs
      must be borne by government.

      The second truth is that private companies will enter the transit business
      only if they can make money.

      So at what point, Chong asks, do the reputed efficiencies of the
      profit-seeking business model make government investments less taxing than
      keeping the systems in public hands?

      And if government money is flowing into private transit enterprises, is it
      flowing out of public systems?

      Chong says any private commuter lines might well compete with GO Transit and
      the TTC for both customers and funding and thus pose a real threat to those
      ``backbone'' systems.

      That's a worry shared by TTC commissioner David Miller, who also sits on the
      services board. ``Ultimately the public would be paying to allow some
      private people to get very wealthy and that money should be going into
      public transit,'' he says.

      Valid or not, concerns like these will form one side of an emerging and
      critical GTA debate - can the private sector fit into our public transit

      Readers can contact Joseph Hall at (416) 869-4390 or gjhall@...
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