Very good.
In your opening document, you spoke of lightweight, aerodynamic, intelligent types of vehicles, and the efficiency of existing transportation networks. We feel—it's our belief—that the present-day technology really lies with off-the-shelf European-design equipment.
For this discussion, we do not define existing transportation networks as subways, high-speed rail, or long-haul VIA or Amtrak types of operation.
We believe that the biggest benefits lie in the ability to move people from outlying points across areas directly into larger cities, either through high-speed rail, subways, or long-haul. This can be accomplished by utilizing European-designed DMUs.
In the United States, New Jersey Transit is considered to be one of the larger transit operators. In 2008, prior to the recession, because of the fact that they had a lot of diesel- operated transit equipment, the impact on their budget, if the cost of diesel fuel rose 1¢ per gallon, was $360,000 U.S. Also back in 2008, prior to the recession, the study they did stated that if gasoline went from $3.25 a gallon, or 85¢ per litre, to $3.50 a gallon, or 92¢ per litre, this is the point at which people would stop driving automobiles and ride the transit equipment.
This is from their board meeting documentation issued in March of 2011.
You can see that now, four years later, we're talking about the cost of gasoline as being $1.23 a litre, and in some cases in the United States over $5 a gallon. Your Calgary mayor last week put out a document that stated he would need $8 billion for the future transportation needs of the city of Calgary.
In operations, if you're moving in this direction, what we'd like to see you do is choose a European style of design rather than a Canadian or United States design. The reason for this is that the type of equipment they manufacture has a lighter-weight design, and therefore, because of this lighter weight, it has a better fuel economy. It also has lower maintenance costs. The reason for the lower maintenance costs is that they don't require what we would term and classify as the “bells and whistles”. They do require some, but far less than in the United States or Canada.
They are more technically advanced because they have concentrated on moving people via trains and via DMU-type operations. DMUs are not new to them. I first rode one from Marseille to Aix-en-Provence in the 1980s. It was a very slow but very efficient type of operation.
Because of the fact that their designs have been progressing along the lines of rail transit rather than airline transit, they have a lot longer longevity with them. They have a greater off-the-shelf availability. One of the things you see in North America, when you go to a request for a proposal for a design of new-style type of equipment, is the length of time it takes for the equipment to be engineered to meet the standards in North America. Consequently, what you also will see, or should see, is lower origination costs. As well, because this equipment is simple in design, you get a greater variety of design.
That's how we see where you're at in 2012.
In the second part of your statement, you're asking what the obstacles are that are incorporated with this.
The greatest obstacle that we see is what we call “mixed right-of-way”. You have to separate the freight from the passenger. The minute you attempt to separate the passenger and the freight, this is where everything starts to break down. This is where the rules come into consideration. This is where regulations come into consideration. Because of that, you can understand that there's a need to find methodologies for how to compensate for this.
George.