Streetcar financing plan panned

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Bombardier prefers stimulus cash for streetcars; mayor wants public-private partnership

THE head of the company that makes the streetcar Sam Katz desires has panned the method Winnipeg's mayor wants to use to pay for the vehicles.

City council's executive policy committee will meet this morning to approve a plan to endorse light rail as Winnipeg's preferred mode of transportation, incorporate light rail into the city's new transportation strategy and continue to explore ways to pay for light rail by accessing a pot of federal money dedicated to public-private partnerships.

The plan is ambitious because Ottawa and Manitoba have offered to use a different pot of cash -- the Building Canada Fund -- to funnel $130 million toward the $220-million second phase of the Southwest Rapid Transit Corridor, a busway that will eventually extend from Queen Elizabeth Way near The Forks to the University of Manitoba.

The mayor would rather see the Building Canada cash pay for road and bridge projects and use P3 Canada to help build an ultra-light rail corridor for flexible streetcars that can run on city streets as well as dedicated transitways.

But in an unusual twist, the president of one of the best-known manufacturers of flexible streetcars recently denounced public-private partnerships as a means of building public transportation.

Speaking at a California conference in May, the president and CEO of Quebec manufacturer Bombardier said public-private partnerships are not the best way to finance public transit, especially during tough economic times.

"I believe the private sector is well-placed to manage the costs of a project and to respect the books, but I am not convinced it is best placed to finance projects," Pierre Beaudoin said in a Los Angeles speech covered by The Canadian Press.

Bombardier lost approximately US$164 million following the collapse of a public-private partnership to maintain the London subway system and has pulled out of another partnership in Denver. In his speech, Beaudoin urged governments to use more of their stimulus cash to invest in public transit.

Katz has so far snubbed the use of stimulus money for transit, partly because projects such as traffic improvements at Polo Park and the western extension of Chief Peguis Trail are higher up the city's priority list. Beaudoin's comments about public-private partnerships are irrelevant, he said.

"If you're manufacturing a product, your goal is to sell the product. You don't care who pays for it," Katz said. "Our situation could be a simple design-build P3, which is (close to) what we're doing right now with the first phase of bus rapid transit."

Partnering up with private firms to design or build projects does not force the city to rely on private financing, he explained.

The city is in the midst of completing the $138-million first leg of the Southwest Rapid Transit Corridor, a 3.6-kilometre leg from Queen Elizabeth Way to Jubilee Avenue. The project is expected to wrap up in 2011.

The absence of a deal to start building the six-kilometre second leg of the corridor in 2012 has prompted transit proponents on council to accuse Katz of placing the future of rapid transit in jeopardy.

Fort Rouge Coun. Jenny Gerbasi said Winnipeg is in danger of winding up with no federal or provincial money for transit, as this year's deadline for P3 Canada funding closed on June 30 and future applications won't be accepted until 2011, according to the P3 Canada website.

"He's putting us in a very dangerous situation, because we could lose $130 million. We're risking big money," she said.

Transcona Coun. Russ Wyatt, meanwhile, said it's foolhardy for Katz to ask city council to endorse light rail before he has a plan to complete a light rail network. The city's new $1.15-million transportation strategy is not due to be finished until 2011.

Both the provincial Selinger government and the federal government have used strong language to urge Katz to complete Phase Two of the southwest corridor as a busway. A city-commissioned study suggests there are no significant obstacles to upgrading busways to rail corridors in the future.

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 7, 2010 A3