Thank you very much. Good afternoon to members of the committee. Thank you for the opportunity to present ITF's testimony in this important study.
The International Transport Workers' Federation is a global trade union federation comprising 700 affiliated trade unions from 153 countries, including, in Canada, our rail affiliates, the International Brotherhood of Teamsters and Unifor Canada, from which my colleague Joel Kennedy is here today.
We have nearly 20 million affiliated transport workers as members of our organization. Our mission is to safeguard the rights of all transport workers through our global network of affiliated trade unions.
Upon reviewing the testimony presented to this committee on November 6, we noted that there was a consensus regarding the advantages of a high-frequency rail project, including the obvious benefits for passengers, economic growth through job creation and the environmental advantages associated with rail's low-carbon emissions. While we strongly endorse public investment in enhancing and expanding railway systems, we also share some of the concerns that were expressed by Unifor before this committee regarding the public-private partnership model that is being promoted in this case.
The ITF has found that privatization has led to fragmented and inefficient rail systems and contributed to a decline in the quality of the services and the quality of work for the workers involved through P3s. Public-private partnerships in major national and international transport services have incurred some significant financial losses. Unrealistic bids from the private sector to secure contracts have resulted in failures on major routes, burdening governments with financial responsibilities and often leading to substantial subsidies from taxpayers and passengers. Private sector financing has proven more expensive than the public sector alternative, with profits going directly to shareholders and thus causing underinvestment in services.
Nowhere is this clearer than in the United Kingdom. The privatized rail system requires more public funding than it did before the wave of liberalization. Ticket prices for passengers have surged, and U.K. rail users are some of the most dissatisfied passengers in Europe.
The failure of privatization and P3s has resulted in rail services being renationalized or operated as joint government ventures, such as, for example, the Perpignan-Figueres high-speed rail line between France and Spain. Despite the initial promises, it has been up to the public purse to sustain failed private endeavours. Similarly, in 2012 the Argentine national government was forced to renationalize train services after a tragic accident due to poor maintenance and lack of repairs. In Kenya, the Standard Gauge Railway, a P3 with the China Road and Bridge Corporation, faced transparency issues and operational challenges, leading to state takeover just four years into the 10-year contract.
Private sector financing, including P3s, often entails social costs such as poorer working conditions and risks to the health and safety of transport workers, passengers and affected communities. This has been reported by our affiliated unions operating in railway systems around the globe. A 2012 study of rail P3s globally revealed that these projects are successful only when public authorities guarantee profits for private concessionaires. Rail projects for which concessionaires assume financial risks tend to fail.
The Asian Development Bank highlighted in a review of thousands of P3s around the world that out of 6,273 P3 projects, only 216 were completed between 1991 and 2015, and the vast majority had to be put on hold. The U.K.'s experience, again with rail privatization, including that of the London Tube system and national railway services, illustrates failures, escalating costs and adverse outcomes for workers and passengers. When the Eurotunnel was built, the overestimates of ridership as well as escalating construction costs meant liabilities had to be restructured in 1997 and again in 2007. Adding to that, they had to also increase the contract from 55 years to 99 years to guarantee a minimum revenue for the private concessionaires.
Conversely, Germany, Spain and South Korea demonstrate successfully publicly funded high-speed rail systems. Positive outcomes include reduced travel times, economic development and improved connectivity.
In conclusion, P3s and other forms of privatization and contracting out fail to deliver the promised savings and, in many cases, simply fail, as mentioned above.
The ITF recommends that the government review the HFR structure and take bold steps to invest in a genuine, sustainable public passenger rail system, one that is publicly owned, publicly operated and democratically controlled, with good working conditions and safety that ensure a good-quality service.
We hope this will contribute to your reconsidering the HFR project as it stands today.
Thank you.