Mr. Speaker, with regard to part (i), the joint project office, a joint venture between the Canada Infrastructure Bank and VIA Rail, led the assessments of the different delivery models for the high frequency rail, HFR, project. The assessments were supported by the joint project office’s advisers, including ARUP and AECOM, owner's engineer, Steer, ridership and revenue, Agentis Capital, financial modelling, DLA Piper, legal, and Ernst & Young, EY, which acted as a strategic financial, market and commercial adviser on the project to Transport Canada.
With regard to part (ii), in general, two traditional public-private partnership, P3, procurement options were analyzed for the HFR project, one in which the private sector partner would be responsible to design, build, finance and maintain the project, DBFM, and another in which operational responsibility would also be transferred, DBFOM. Within these two general strategies, different levels of responsibility transfer were further examined, for example, identifying specific components of maintenance or operational responsibility. Transferring responsibility for collecting revenues was also examined as an aspect of operational transfer.
An analysis of these options, including an assessment against a traditional design-build procurement model, indicated that a DBFOM model, inclusive of revenue transfer, showed the most promise for HFR.
An important enhancement to the procurement strategy of the DBFOM model is the inclusion of the co-development approach. Rather than defining the entirety of the project up front before engaging the private sector, the co-development approach sees the private sector participating as a partner in developing the project. This brings in private sector expertise and innovation earlier, which is of particular value for a project with the size, complexities and long-term nature of HFR.
With regard to part (iii), for the DBFM approach, the key advantages included a potentially faster procurement process due to less complexity, avoiding duplication of operating roles between VIA Rail and a new operator, reliance on VIA Rail's strong track record of controlling costs and their experience in operating rail in a complex operating environment, as well as lower costs of financing overall. Disadvantages included reduced fiscal certainty by transferring less risk and responsibility to the private sector, a smaller scope for the private sector to drive innovation on a large and complex project, and more difficulties in interfacing between the "operations" and the "infrastructure" than if these had different responsible entities. Also considered was that a unique project with the magnitude and transformational potential of HFR would benefit from a broader exposure of responsibilities to the private sector.
In the case of DBFOM, key advantages included higher fiscal certainty by transferring costs to the private sector, simpler infrastructure-operations interface risks by having a single responsible entity, that responsibility for operations and revenues would improve the incentive to build a project that operates successfully over the long term and would encourage innovative thinking, and the drawing in of external expertise to increase ridership and revenue, as well as be ready to adapt to change. Market outreach also suggested that there was more likely to be interest by the private sector in bidding on a DBFOM than a DBFM. Disadvantages included the higher cost of capital, in particular when that capital is taking on more responsibility and risk, as well as the requirement for a more complex oversight approach to ensure the project achieves public interest objectives.
With regard to part (iv), the following transportation projects were analyzed when evaluating different procurement models and approaches: HSL Zuid, high-speed rail, Netherlands; Ottawa LRT, light rail, Canada; Eglington LRT, light rail, Canada; Denver Eagle FasTrack, commuter rail, U.S.A.; Waterloo LRT+A21, light rail, Canada; Hurontario LRT, light rail, Canada; Canada Line, rapid transit, Canada; Brightline, higher speed rail, U.S.A.; Gautrain Rapid Rail, higher speed rail, South Africa; Zaragoza Tramway, tram system, Spain; REM, express rail, Canada; North East Link Program – Central Package, tunnel, Australia; Sydney Metro City & Southwest, rail, Australia; Sydney Metro Northwest, rail, Australia; London South Eastern Railway, passenger rail, England; United Utilities Haweswater Aqueduct, pipeline, England; Thames Tideway Tunnel Project, tunnel, England; Sepulveda Transit Corridor Project, rail, U.S.A.; Potrero Bus Yard Project, bus yard, U.S.A.; and Maryland Traffic Relief Plan – Phase 1, road, U.S.A.