Transport Committee on Feb. 13th, 2024

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I have another question about the links between cities.

We have talked about a link to urban centres, which would be more expensive since the lines would have to be built through existing infrastructure. One might be tempted to take the “lazy” route by building a station that is far from the city centre. There might also be pressure from cities along the line that would also like to have a station, adding stops along the route.

In Europe, do high-speed trains stop in the suburbs of major cities or at stations that are far from the city centre? In your opinion, would that be a good approach or not?

[Friedemann Brockmeyer]

The French especially have built high-speed rail from the outskirts of cities to the outskirts of cities. They use a legacy network and have mixed traffic for the last mile going into the city stations. The same is true for all the other European countries, with the exception of Spain.

This is a very good decision, because it's so expensive to build additional tracks into city centres. I think this is really one of the advantages, and I've tried to address it from the beginning. This is also determining capacity constraints, because you have to share with mixed traffic, and you have to bring them into city centres to make the connections to the metro systems and the commuter rail systems to have a good interchange of passengers between your intercity service system and the local trains.

If you have smaller cities, and there are several examples from multiple countries in Europe, then you can really build stations at the outskirts, and there will be big park-and-ride systems, for example, to bring commuters via the high-speed rail system to the major metropolitan areas.

To make a long story short, go to the city centres of the most important cities—Toronto, Ottawa, Montreal, and Quebec—and build the stations outside of the smaller cities if possible. If you can't go easily through the cities, then you can't do it, but don't build any tunnels in the smaller cities. That makes no sense, the trade-off is too low to have the advantage of being in the city centre of smaller cities.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

If I may, Mr. Chair, I would like to save my remaining 20 seconds for the next round of questions.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Barsalou-Duval.

Next we have Mr. Bachrach.

Mr. Bachrach, the floor is yours. You have six minutes, sir.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Perhaps I'll start by asking the clerk if my audio is sufficient for the interpreters.

[The Chair, Liberal, Peter Schiefke]

We are getting the thumbs-up, Mr. Bachrach. The floor is yours.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

That's wonderful. I apologize for the technical difficulties this morning.

Thank you to Mr. Brockmeyer for joining us. His testimony has been very interesting.

This study has touched on a number of issues, both technical issues and issues around the procurement model and the question of how building high-frequency or high-speed rail can serve the national interest in a large country, so I want to touch on a few of the aspects we've been discussing so far over the course of the study.

Your firm, I imagine, has worked on both publicly procured projects and projects that have a greater role for the private sector, including P3s. What would you say are the biggest differences between public and private rail projects in Europe?

[Friedemann Brockmeyer]

That's a very good question. I would say that public projects are less designed to budget; private projects are very designed to budget. I would say that is the biggest difference. In the end, as I stated at the beginning, it's all based on public funding, even if you have a P3 project. They are not very common in Europe. I would say that it's really about the focus on the budget.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

There's only one rail rider, so eventually the budget all comes back to either the passenger or the taxpayer.

You highlighted Switzerland and Austria as examples of countries that have a long-term vision and have really succeeded in incrementally building their high-speed rail network in the public interest. Could you talk about the operational models in those countries? Are these rail lines privately operated or publicly operated? What's the role of the federal governments in those cases?

[Friedemann Brockmeyer]

First of all, there's an important difference, because Switzerland is not part of the European Union, so the Swiss don't have to comply with EU law. That means that the business in Switzerland is a little different. It is completely operated by SBB, the national operator of the Swiss federal railways.

In Austria, it's different. There we have two operators. One is the state-owned operator, ÖBB, or Austrian federal railways, and there's also a private operator, WESTbahn, but its minority shareholder is SNCF, from France, so there's a difference in the model.

They are both very successful. In Switzerland, they are commercial, but, as I said earlier, the subsidies are in the infrastructure, so they pay a very small track access charge to the infrastructure manager. It doesn't cover the full cost, but it's an incentive not to use too many tracks. They have the same model in Austria, and both operators were very successful commercially until the coronavirus, when they decided to change the system. Now they're both public service-obliged.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

In Canada, the terms of reference for the project we're talking about, the current government's HFR proposal, are essentially that the private sector will play a major role in designing the project, will finance the infrastructure, will operate the trains and will set the schedule and fares.

When you think about the long-term public interest, what are the questions you would have about how the government should ensure that, 100 years from now, the public interest has been protected, given the role of the private sector in the government's current conception of things?

[Friedemann Brockmeyer]

This really depends on the period of the contract. I'm not very familiar with the public-private partnerships model, which is in place in Canada already, or what the plans are.

What you really need, as I said earlier, is a long-term vision here. Why do I have a rail system? What's the long-term plan? What should the schedule in the long term look like? Then, if you're using a private consortium to build and operate the system, you have to agree very early on regarding the long-term schedule.

What's the supply side in terms of intervals and the capacity you expect in 2030, 2040 and 2050? They have to be very clear. Then, on the same side, you have to be really careful to calculate very carefully how much capacity you need on the newbuild stretches as well as on the city access stretches. That's very important.

Let's say, if you have that—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Brockmeyer, I just have one more minute. You mentioned that public-private partnerships are usually about buying capabilities. They're not really—or they shouldn't be—about securing financing or these other factors. We talk about risk transfer.

When it comes to buying capabilities, are there other procurement models that allow you to secure the capabilities of the private sector while retaining public ownership and public operation of the service? Does your firm work on publicly operated and publicly owned rail projects in Europe and bring your capability to those projects so that they can tap into the innovation you bring?

[Friedemann Brockmeyer]

We do more of the management stuff, but it's quite common.

I will give you another example. Some Scandinavian countries have decided to introduce the European Rail Traffic Management System. They had no capabilities to do that. They hired all the engineers they could get from all over Europe—from Spain, Portugal and Italy—and brought them to Norway and Denmark and set up the system in their publicly owned infrastructure management. They bought all the capabilities from the engineering consultancies.

That's the other way around, if you don't have the capabilities. It's different in Switzerland and Germany. They have the capabilities. They don't need the engineers. They have engineering consultants. They have their own engineers.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Brockmeyer, and thank you, Mr. Bachrach.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Next, we have Mr. Muys.

Mr. Muys, the floor is yours. You have five minutes, please.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Thank you, Mr. Brockmeyer, for your perspective from Europe, because I think that's been fairly interesting. Personally, I travelled on the TGVs in France years ago, on a trip, and it was an interesting experience. That's my only vantage point on European rail.

You talked about the four-hour mark as being a bit of a tipping point in terms of viability in competing versus air. What happens after the four-hour mark? What does it look like at five, six, etc.?

[Friedemann Brockmeyer]

When you are losing market share to flights, it's very simple. If you are above seven or eight hours, it makes no sense. There are still rail travellers, but they don't have a very high willingness to pay, because of that slow travel. You can see if you're looking into city pairs in Europe, that if the travel time goes below four hours, rail dominates, and below three hours there are no flights. It's very simple. If it's above, then the share of rail is decreasing.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

What about regions of Europe? You talked about the string of pearls, and that makes sense, particularly across the parts of Germany where there are those cities close together. What happens in other areas of the country? Canada is a very vast country, and we're talking about a proposal for high-frequency rail in one region of the country for billions of dollars that are going to be borne by taxpayers in all regions of the country. Are there many examples, or are they less economic than in other parts of Europe?

[Friedemann Brockmeyer]

I think there are two questions.

One, would it make sense at the federal level to build it for a specific region? In the end, yes, because we can increase GDP. All these investments have a positive multiplier from a macroeconomic perspective.

On the other question, it makes no sense to build railways in areas where no people live. There are some exceptions in France, where you have a distance of 200 kilometres or 300 kilometres without a stop between two cities, but I would say that this is more or less the longest stretch that makes sense.

If you have, for example, a stretch that is 500 kilometres or 700 kilometres, that distance would be much too far when we talk about the electrification of airplanes or whatever, which would make much more sense from a transport mode choice.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

You talked about terrain being an important factor in determining the cost of building these. While it may look like it's a flat, smooth terrain, we are going through parts of the Canadian Shield, which is hard as rock, obviously, on the routes that are being proposed. There would be bridges, and actually quite a few bridges given the number of creeks and rivers and lakes.

Bridges versus tunnels—what are the cost impacts of those?

[Friedemann Brockmeyer]

It certainly depends. If you have a stretch where you build mostly at grade—you have maybe a few embankments, a small bridge, or a little river—you can say that in euros, at current prices, it's somewhere between 30 million euros to 40 million euros per kilometre. That would be around $50 million Canadian per kilometre. If you build in a more mountainous region, you go up from 80 million euros to somewhere around 100 million or 120 million euros. It really depends on the rock where you have to build the tunnel.

To give you a hint, you can say that if you build a tunnel, you can at least double the price of a rail system.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

We've talked a lot about high-speed rail. Certainly that was my experience in France, albeit it was just one country and at one point in time. Are there high-frequency rail systems operating in Europe? Why is it the case in that particular region or along those routes, versus high-speed rail? As well, what has been the ridership, and what is the economic difference?

[Friedemann Brockmeyer]

I think most of the rail systems in at least central Europe are high-frequency rail systems. It's standard that you have 60 minutes halfway or 30 minutes halfway on most of the important intercity stretches.

What is the difference? I would say that the important difference is from 160 kilometres onwards. Above 160 kilometres, you need continuous train supervision. Before that, you have a discrete one that's a little cheaper. The infrastructure is not very complex. Above 160 kilometres, it becomes much more complex. It increases exponentially when increasing the speed.

It's not the technical and not the safety system. Again, it's more about building all the civils—tunnels, bridges and that stuff. If you're building for 350 to 400 kilometres per hour, then it really depends on the topography.