Concept image: Mark III SkyTrain leaves 160th Street Station on Fraser Hwy in Fleetwood.

PRESS RELEASE: “Rapid Transit Vision” report exposes faults of Surrey LRT proposal

IMMEDIATE RELEASE -14th July, 2014

A new rapid transit vision for Surrey, released by Better Surrey Rapid Transit lead campaigner Daryl Dela Cruz, exposes serious faults in the City of Surrey’s at-grade rail (LRT) proposal approved by the Mayors’ Council.

The “Vibrant Communities, Productive Citizens” vision, released Friday, details a “more practical rapid transit vision” for the City of Surrey. The 16-page report includes a segment on the Surrey LRT proposal that lists a number of serious flaws in the current LRT proposal.

One of the most serious flaws pointed out is a total lack of benefits on 104th Ave to Guildford, a corridor that was featured in a prominent City of Surrey LRT concept video. The report notes that express riders on the 96 B-Line will save just 1 minute on the proposed LRT, after facing significant travel time increases during construction – and also notes that the loss of nonstop express service will increases travel times for riders from Fraser Heights (337) and Walnut Grove (509).

Key slides from the report:

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Other faults were pointed out, including a serious service disruption risk to the project benefits. The LRT passes through the region’s most accident-prone intersections, creating a risk that riders face service disruptions as frequently as once every two-days as Light Rail trains are not as flexible for detouring around accidents unlike Bus Rapid Transit (BRT), and cannot avoid them like SkyTrain.

Better Surrey Rapid Transit (skytrainforsurrey.org) has pointed out in previous releases that the City of Surrey LRT proposal poses little transportation benefits to Surrey stakeholders with a negative business case, and has increased in cost to $2.44 billion, which could afford two SkyTrain extensions in the South-of-Fraser to Langley and Newton. SkyTrain campaigners like Daryl have worked tirelessly to raise issues with the current proposal and advocate for the adoption of more practical rapid transit solutions for Surrey and the South-of-Fraser.

Daryl is hoping to attract the attention of Mayor and Council candidates in the upcoming municipal elections, and has pledged to tour community associations this summer in presenting the vision and educating stakeholders on the downsides of the current LRT proposal that have been continuously ignored by advocates.

For additional information, please contact:

Daryl Dela Cruz, lead SkyTrain campaigner – Better Surrey Rapid Transit
Cell: (604) 329-8082; E-mail: daryl@skytrainforsurrey.org

Appendix

Our vision: bus priority upgrades on 104 Ave, a median busway/BRT on King George Blvd, and a SkyTrain extension to Langley.

The “Vibrant Communities, Productive Citizens” vision proposes an alternate, more practical solution that involves the following improvements instead of the current LRT vision:

  1. Bus priority upgrades on 104 Ave
    Corridor enhancements for 96 B-Line: Increased service, signal priority system, introduce all-door boarding, new queue jump lanes and congestion management.
  2. Median busway/Bus Rapid Transit (BRT) on King George Blvd
    Dedicated median bus-way from Surrey Central to 56 Ave, for enhanced/BRT operation of 96 B-Line. Has full signal priority and accessible, sheltered stations.
  3. SkyTrain extension on Fraser Hwy
    Extend the Expo Line SkyTrain from King George Station to Langley Centre on a mostly elevated right-of-way down Fraser Highway.

The vision compiles data from sources such as the TransLink Surrey Rapid Transit Study, finding that there is a potential to generate 2x the transportation benefits compared to the current LRT proposal, with a lower capital cost requirement of just $2.3 billion vs. $2.44 billion for the proposed Surrey LRT and a positive 1.13:1 benefit-cost ratio.

About us

Vibrant communities, productive citizens. Better Surrey Rapid Transit = SkyTrain for Surrey

We advocate SkyTrain because evidence shows that the City of Surrey’s decision to plan at-grade rail and oppose elevated SkyTrain rapid transit was not based on legitimate facts, statistics, or logical reasons. It made absolutely no sense. Learn more: visit our website at skytrainforsurrey.org.

See pages on Better Surrey Rapid Transit website: Why SkyTrain | Why not LRT | Reality Checks

About these ads

REALITY CHECK: Surrey light rail coalition massively misleads public

A Light Rail opposition group in Surery is displeased that a coalition for Light Rail Transit in Surrey is massively misleading and manipulating the public again.

A Light Rail opposition group in Surrey is displeased that a coalition for Light Rail Transit in Surrey is massively misleading and manipulating the public again, according to a media report by the Business in Vancouver report.

The report claims that Light Rail Links members saw problems with expanding SkyTrain versus building light rail.

“SkyTrain, in our opinion, does not build communities. It separates them with the big, tall concrete structures,” said Anita Huberman, CEO of the Surrey Board of Trade, a backer of the Light Rail Links coalition.

(From Business in Vancouver)

Light Rail Links members and supporters all over Surrey seem to think that SkyTrain separates communities with its visual impact, yet study after study and statistic after statistic has found that SkyTrain has done the opposite; in spite of its visual impact, it has had a phenomenal impact in shaping dense, transit-oriented communities and neighbourhoods throughout the region, and efforts continue to be made to utilize the SkyTrain system to attract dense, transit-oriented development. Major centres near SkyTrain such as Metrotown, Brentwood, Lougheed Town Centre, Oakridge, and Downtown Richmond are booming with transit-friendly developments due to their SkyTrain proximity.

In an internationally reknowned thesis submitted to the University of London Centre for Transport Studies, SkyTrain was found to be the most effective system between 20 around the world (including Light Rail systems) in shaping urban growth, and the only system of the 20 which had a significant revitalizing impact on slum areas.

Huberman also made a flawed statement with regards to Light Rail versus buses, reasoning that:

“Buses congest the road. They increase pollution, and they’re not efficient in terms of moving people around.”

(From Business in Vancouver)

This statement completely neglects the possibility that buses can be used in dedicated lanes (as has been planned by TransLink, the regional transportation authority) in the same manner as Light Rail, and can use overhead electric wires (as is done in Vancouver) and electric propulsion to provide emissions-free transportation.

These discrepancies again expose the lack of research and weak case among Light Rail Links coalition backers. On the day of their launch, Better Surrey Rapid Transit (a citizens’ group that opposes Light Rail Links and advocates for SkyTrain for Surrey rather than LRT) launched a REALITY CHECK [CLICK HERE] that revealed that no new research was brought forward by the Light Rail Links advocacy, which rehashes vague reasons that have already been used by other advocates and unproductively adds nothing new to the discussion.

“I am becoming extremely concerned with the amount of misleading information on Surrey rapid transit that is circulating among advocacy groups, and how it’s manipulating the public to accept an option that is clearly not the best option for Surrey, as some would like to suggest” says Campaign Director Daryl Dela Cruz.

The Better Surrey Rapid Transit advocacy has frequently pointed out that Light Rail is not a suitable option for the City of Surrey because it does not meet regional and local transportation goals, and offers transportation benefits that do not exceed the costs, which do not make the option very viable to either TransLink or the provincial government. Light Rail options are slower, less reliable, less attractive, and will fall victim to a service disruption every day. Neither emissions reductions nor mode-share shift from car to transit goals are met with Light Rail Transit options.

Attached to this press release and reality check are a collection of slides from the “Rapid Transit and Surrey’s Needs” report, which was prepared by Better Surrey Rapid Transit and recognized by the City of Surrey in a presentation this last April. (see below)

For more reality checks, [CLICK HERE]

Also see: Why SkyTrain | Why not LRT

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ABOUT BETTER SURREY RAPID TRANSIT

Better Surrey Rapid Transit

Better Surrey Rapid Transit” (skytrainforsurrey.org) was established because Surrey is in need of a bigger solution than what is proposed. TransLink has proposed options for Surrey that do not meet mode-share reduction targets and are far behind what has been achieved in the City of Vancouver. Mayor Watts’ declaration of at-grade Light Rail Transit (LRT) over SkyTrain also does not make sense. Current options look forward to this city’s transportation needs to 2041 (within 30 years), but do not look forward to what the needs will be in 30-50 years and beyond. We want to tell Mayor Watts and TransLink that the solution that Surrey needs is bigger than what everyone wants, and we’re advocating for that bigger solution that Surrey needs – an expansion of SkyTrain.

Better Surrey Rapid Transit’s advocacy now includes a petition campaign that urges decision makers to plan for better Surrey rapid transit. This petition has beeny launched at [CLICK HERE] and promotion efforts (including new videos, online and on-location canvassing efforts, and associated media advisories) continue to advance.

For more information, please contact:

Daryl Dela Cruz
Better Surrey Rapid Transit – Campaign Director
Website: skytrainforsurrey.org – Email: info@skytrainforsurrey.org

Slide 1

PRESENTATION: Rapid transit and Surrey’s needs Executive Summary

Rapid Transit and Surrey’s needs

Examining the modal shift in TransLink’s Surrey Rapid Transit Study alternatives

This is a presentation document that Better Surrey Rapid Transit has prepared for future presentations.

A longer, fully detailed version (which was presented to the City of Surrey Transportation & Infrastructure Committee in April 2013) is available at [CLICK HERE]

REALITY CHECK: Light Rail Links does not have case for LRT.

Tuesday morning was triumphed by the launch of the new Light Rail Links coalition, a membership of different organizations advocating for Light Rail Transit in Surrey, BC.

The new coalition presents four vague reasons for “Why LRT”:

  1. LRT will connect communities south of the Fraser
  2. LRT will create pedestrian-friendly neighbourhoods with new developments and businesses
  3. LRT has easily accessible cars that can carry high volumes of passengers
  4. LRT is a cost effective solution that will link the most communities

These reasons are vague reasons and they do not explain why Light Rail in Surrey is a better solution than SkyTrain expansion.

By comparison, Better Surrey Rapid Transit (an advocacy for SkyTrain rather than light rail) has prepared a full case [CLICK HERE] that explains why SkyTrain is the best solution for Surrey, BC. Better Surrey Rapid Transit does not rely on vague reasons for this case. It relies on the facts presented in the Surrey Rapid Transit Study. Key facts that were revealed in the Surrey Rapid Transit Study include:

  1. Even with both a Light Rail system across the city and transportation demand management to raise the cost of driving, 65% of commutes will still be by car
  2. No Surrey Rapid Transit options involving Light Rail will meet 2041 transportation modal shift goals
  3. Light Rail Transit will generate less monetary benefits versus cost, and has the worst business case of all the Surrey Rapid Transit alternatives
  4. Light Rail Transit generates on average of 53% the ridership of SkyTrain on the same corridor

In addition, at-grade Light Rail Transit:

  • provides slower transit compared to SkyTrain and potentially less reliable transit compared to even buses. This provides less options for citizens (esp. young citizens) who, in a time of economic recession, desperately need more options.
  • has a smaller impact on pressing issues like auto use growth because it attracts less modal shift
  • causes traffic mayhem and disrupts communities by taking away road capacity on major corridors such as 104th Ave and creating less auto to transit modal shift.

See pages on Better Surrey Rapid Transit website: Why SkyTrain | Why not LRT

For more reality checks, [CLICK HERE]

ABOUT BETTER SURREY RAPID TRANSIT

Better Surrey Rapid TransitBetter Surrey Rapid Transit” (skytrainforsurrey.org) was established because Surrey is in need of a bigger solution than what is proposed. TransLink has proposed options for Surrey that do not meet mode-share reduction targets and are far behind what has been achieved in the City of Vancouver. Mayor Watts’ declaration of at-grade Light Rail Transit (LRT) over SkyTrain also does not make sense. Current options look forward to this city’s transportation needs to 2041 (within 30 years), but do not look forward to what the needs will be in 30-50 years and beyond. We want to tell Mayor Watts and TransLink that the solution that Surrey needs is bigger than what everyone wants, and we’re advocating for that bigger solution that Surrey needs – an expansion of SkyTrain.

Better Surrey Rapid Transit’s advocacy now includes a petition campaign that urges decision makers to plan for better Surrey rapid transit. This petition has beeny launched at [CLICK HERE] and promotion efforts (including new videos, online and on-location canvassing efforts, and associated media advisories) continue to advance.

For more information, please contact:

Daryl Dela Cruz
Better Surrey Rapid Transit – Campaign Director
Website: skytrainforsurrey.org – Email: info@skytrainforsurrey.org

Flexity Freedom

REALITY CHECK: Cost of 3 LRT lines vs. SkyTrain to Langley

The City of Surrey has often stated, including on its current Rapid Transit Now advocacy page, that 3 Light Rail Transit (LRT) lines across the city would cost less than building SkyTrain to Langley. This claim is incorrect, and it may also be based on outdated data.

Flexity Freedom

A City of Surrey LRT Demonstration last summer was sponsored by a rolling stock manufacturer (Bombardier)

The latest cost estimate values in the Surrey Rapid Transit Study [1] anticipate that the capital cost at the assumed year of expenditure (i.e. when all work is complete, anticipated to be 2019 in the study) of alternative RRT1 is $1.8 billion, which is lower than the capital cost estimate of alternative LRT1 ($2.18 billion). When inflation to year of expenditure is not considered and costs are measured in proper 2010 dollars (year of study commencement), alternative LRT1 presents a capital cost of $1.99 billion versus RRT1’s $1.645 billion. This means the cost of 3 LRT lines is 21% higher (and not less) than SkyTrain to Langley.

When the net present value (NPV) of costs (which also account for operating costs as well as fare revenues – which are dependent on ridership) is compared, alternative LRT1 presents a capital cost of $1.63 billion versus RRT1’s $1.26 billion. This means that the net present total cost of 3 LRT lines is 29.3% higher (and not less) than SkyTrain to Langley, and is comparable to the net present cost of a SkyTrain extension to Langley with bus rapid transit (BRT) on other corridors.

However, Light Rail costs considerably more than SkyTrain in the study when the NPV of benefits (which accounts for measurable transportation and greenhouse gas (GHG) emission reduction benefits) is added to the comparison. Light Rail generates less of both, because slower service speed generates less transportation benefits and also results in less ridership, less new transit trips, and less GHG emission reduction. As a result of a low NPV benefit that does not exceed the NPV cost, alternative LRT1 has a total net present value (NPV benefits – NPV costs) of negative $510 million. When compared to alternative RRT1’s positive $690 million net present value (among the best of alternatives), alternative LRT1 costs 235% more than alternative RRT1.

For the City of Surrey, LRT has been largely about an incorrect perception that it will cost less since Mayor Dianne Watts announced a campaign for it in April 2011 and again in March 2012. This campaign has never been backed up with accurate claims, and the City of Surrey has still not released an actual, statistical written case for building LRT instead of SkyTrain.

For more reality checks, [CLICK HERE]

Footnotes/sources:

  1. IBI Group and TransLink -SURREY RAPID TRANSIT ALTERNATIVES ANALYSIS PHASE 2 EVALUATION

REALITY CHECK: The dishonesty of “No one builds with SkyTrain anymore”

Reality Check: "No one builds with SkyTrain anymore"

In a recent letter response to our news feature in the Surrey Now [LINK HERE], a LRT advocate (Mr. Malcolm Johnston of the Rail for the Valley transit initiative), sent a response claiming that SkyTrain is an obsolete system. [LINK HERE].

Today, SkyTrain is now considered an “Edsel” transit system, with only seven such systems built since the late 1970s. No one builds with SkyTrain anymore. Compare that with LRT, with more than 160 new systems having been built and more than 30 more under construction during the same period.

Light Rail advocates have frequently mislead the public with claims such as “No one builds with SkyTrain anymore” and “only seven SkyTrain-type systems exist worldwide”. These claims are largely rhetorical and are incorrect.

This is based on a misleading perception that the technologies and systems used in SkyTrain (such as linear motor propulsion) are proprietary – that is, they are only supplied by Bombardier and must be exactly identical. This is incorrect. Competitors can offer linear motor propulsion rolling stock that is directly compatible with SkyTrain and SkyTrain-like systems, according to a Bombardier document that was submitted for review in the selection process for the Honolulu Rapid Transit system in Hawaii [1].

Linear Motor train in Guangzhou, China

Linear Motor rapid transit (just like SkyTrain) in Guangzhou, China – this train was built by CSR-Sifang

The propulsion technology being used in Vancouver’s SkyTrain system is seen as unique because there are few rapid transit systems around the world that are exactly identical (i.e. they use the ART rolling stock manufactured by Bombardier, and linear motor propulsion). The only other ones in service as major urban rapid transit lines are located in Kuala Lumpur, Malaysia and Yongin, Korea. However, as proven above, SkyTrain and these other systems are not limited to purchasing rolling stock systems by Bombardier.

Other companies (including Kawasaki, Kinki Sharyo, CSR Sifang, Itochu) have committed to large-scale manufacturing of linear motor propulsion rapid transit vehicles for systems in several other cities, especially in Asia (i.e. lines in Osaka, Japan and Guangzhou, China), for benefits of lower maintenance costs, lower vehicle height and smaller tunnelling. Guangzhou, China has more than 600 linear motor rapid transit cars on order, and has committed to using linear induction motor propulsion in all new rapid transit lines that do not need to integrate with older lines, one of which is under construction and at least ten of which are planned [2].

Automatic train control or driver-less operation, the other technology that is thought to be unique to SkyTrain (which is supplied by another company called Thales) because SkyTrain pioneered its use, is the worldwide standard for rapid transit signalling and operatons. More than 100 systems use ATC technology, including more than 30 that are fully automated with no drivers whatsoever [3].

More than 20 other driver-less rapid transit systems are now under construction, and several other rapid transit systems (including some of the world’s oldest and most heavily used, such as the New York Subway) that used traditional signalling and operations systems are converting their operations to driver-less, automatic train control [3] – a technology pioneered by Vancouver’s SkyTrain.

By 2020, more than 150 rapid transit systems around the world will have been inspired directly by technology invented in Canada and pioneered in the City of Vancouver.

The grade-separated, driver-less, linear motor propulsion rapid transit system being marketed by Bombardier itself is far from dead. Investments into the next iteration of SkyTrain technology (known as Bombardier INNOVIA Metro) have been made for extensions of rapid transit in Vancouver (Evergreen Line) [4], Kuala Lumpur, Malaysia (Kelana Jaya Extension PLUS Port Klang LRT) [5] and Riyadh, Saudi Arabia (Riyadh Metro line 3) [7].

By using rhetoric and misleading claims to push an opinion on public, Light Rail Transit advocates who are opposed to SkyTrain (often for capital cost reasons) demonstrate that they are motivated by opinion and not by facts. They utilize a poor knowledge-base in attacks on SkyTrain rapid transit, which is the most cost-efficient rapid transit system in North America [6].

For more reality checks, [CLICK HERE]

Footnotes/sources:

  1. Honolulu High-Capacity Transit Corridor Project – RFI Information – Pages 79 & 80
  2. ITOCHU Japan media release: ITOCHU and China’s CSR Sifang Accept Additional Orders for Guangzhou Linear Metro Cars
  3. Wikipedia and sources: List of driverless trains
  4. BC Newsroom: Contract signed with Bombardier to supply Evergreen Line SkyTrain cars
  5. Bombardier Highlights Expertise at Rail Solutions Asia, Kuala Lumpur
  6. Vancouver Broadway Subway presentation (last slide) and Federal Transit Administration 2006 data
  7. Bombardier to deliver technology for new metro line in Riyadh

LETTER TO THE EDITOR: LRT in Surrey won’t fly, stick with SkyTrain – Vancouver Sun

SkyTrain and Light Rail

Readers from around Metro Vancouver might have noticed writing from Better Surrey Rapid Transit’s campaign director in today’s issue of the Vancouver Sun.

The newsletter by Campaign Director Daryl Dela Cruz presents a strong message about the weak business case of LRT in Surrey, how the LRT pursuit weakens Surrey’s case for any rapid transit, and the need to pursue different options in order to make rapid transit in Surrey a reality.

LRT in Surrey won’t fly, stick with SkyTrain

Re: Surrey eyes dollars destined for infrastructure across country, March 22

Rapid transit decisions are about more than just capital cost.

There are other costs and measurable benefits that need to be considered. These together make up two different and more relevant numbers called “net present value” and “benefit-cost ratio,” which form the business case that determines the feasibility of a rapid transit project for approval and funding.

According to TransLink’s recently released final evaluations, Surrey’s preferred LRT option has a benefit-cost ratio of 0.69: 1 (meaning that every $1 invested will generate just $0.69 in cost return) and a net present value of negative $510 million. It is the worst out of all the options.

I have no idea how Surrey is supposed to get senior-level government funding, as needed to make any rapid transit a reality, if that is the business case for their preferred option. It is like trying to hit your target, but deliberately putting your foot in front of the barrel.

Surrey LRT will never become a reality.

I’ve been telling the city for two years to put LRT to rest and consider the positive benefit-cost ratios presented by SkyTrain options.

Daryl Dela Cruz
Campaign director at Better Surrey Rapid Transit

Copyright (c) The Vancouver Sun

Slide 1

PRESENTATION: Rapid transit and Surrey’s needs

Rapid Transit and Surrey’s needs

Examining the modal shift in TransLink’s Surrey Rapid Transit Study alternatives

This is a presentation document that Better Surrey Rapid Transit prepared for a 2013 presentation to the City of Surrey Transportation and Infrastructure Committee.

The full 62-slide presentation can be downloaded at [CLICK HERE]. For its online release on our site, the presentation has been split into its 5 segments, which can be individually viewed below:






Metrotown Station in 2006

DEBUNKING MYTHS: Coun. Rasode, Light Rail and a wrong perspective on Business Impact

From the Surrey Leader [LINK]

“We’ve been very clear that our option would be LRT, not just because of the cost but because it is less intrusive to the community,” Rasode said.

Light rail passengers riding at street level would be more likely to stop and shop at Surrey businesses, she said, than an overhead SkyTrain whisking residents to other cities.

A comment from Daryl Dela Cruz, BSRT Campaign Director

While the idea that passengers will have a better view of local businesses from ground level than from an elevated SkyTrain line is certainly not invalid, what is invalid is that this is a reason that at-grade Light Rail is going to bring better business than an elevated SkyTrain line. I want to challenge this particularly because it goes by an assumption of equality, something that doesn’t exist between Light Rail and SkyTrain as rapid transit modes because they are not the same.

As grade-separated rapid transit, SkyTrain has the opportunity of running faster and more frequently. What this does is attract more new riders, because riders have faster and better options for getting around without the use of a car.

In TransLink’s recent rapid transit study outlook, it was predicted that a SkyTrain extension to Langley with bus rapid transit (BRT) segments to Guildford and Newton/White Rock would attract twice as many new riders (24,000 vs 12,000) as a full Light Rail Transit (LRT) network across the city, in spite of the use of inferior BRT on 104th Ave and King George Blvd.

It is competitive level of service and higher ridership, not the ability to see more businesses from the line at-grade, that stands to bring business benefits to those located near rapid transit. Therefore, Ms. Rasode’s claim is largely invalid.

Metrotown Station in 2006

There’s a reason that Metropolis at Metrotown is the most popular shopping destination in the lower mainland, in spite of the fact that you can’t see any of the businesses from the rapid transit line at all because everything is indoors or on Kingsway!

DEBUNKING MYTHS: Light Rail advocates and debt servicing costs

A special release by lead analyst Daryl Dela Cruz of SkyTrain for Surrey

You can be said to have been researching transit issues in Metro Vancouver for many years, but you can still be wrong about what you know about transit issues.

If so, they would do themselves an injustice because, as provincial and  federal taxpayers they too are funding the bottomless pit that is TransLink, its  gold-plated SkyTrain projects and its unwieldy, costly governance structure.

In particular, when it comes to “achieving value for money,” it would be a  relief for your office to settle once and for all the TransLink-manipulated  comparative cost debate over SkyTrain versus Light Rail Transit technology.

If you were to do that – without political interference – I have no doubt you  could save taxpayers billions of dollars in capital and debt-servicing  costs.

Elizabeth James – No shortage of projects for the new AGLG - North Shore News

That was a phrase that I had on my mind yesterday morning when I sent an e-mail to Liz James, the writer of the 3 paragraphs in the quote box above and a weekly columnist at the North Shore News. I was specifically intent on asking her where she based the research to support the above written claim in her most recent newsletter article, suspecting she used some particular sources I know to be filled with inaccuracy. In our e-mail conversation, she made the following claim about the Canada Line SkyTrain’s capital costs:

As for capital cost claims – the Canada Line was touted at $1.4 billion and ended up being over 2.1 billion before debt servicing costs were factored into the equation
(Elizabeth James, North Shore News Columnist – Via E-Mail)

Firstly, the capital cost claim regarding the Canada Line appears to be misunderstood as the initial public sector funding commitment for the Canada Line never exceeded $1.4 billion. Regardless of whether the final total project capital cost at $2.1 billion actually exceeded a set construction budget, the initial public sector funding commitment was protected by an agreement set with SNC-Lavalin/Serco that ensured that the private sector would be responsible for any capital cost over-runs in building the project. This is highlighted in our Examining Canada Line History article, its accuracy of which was confirmed by InTransitBC themselves when they reposted it on the Canada Line Blog last month.

However, that is not the main point of this write-up.

The debt servicing cost claim by Ms. James is highlighted in red as as it highlights an incorrect and misleading claim that has been used by Metro Vancouver LRT advocates for a number of years now. There has been a serious misunderstanding of the term “debt servicing”: what it is, how it works, and why it is necessary.

The claim has been around since at least the early 2000s, according to this article [LINK] which was posted by Charlie Smith on the Georgia Straight at that time:

The original SkyTrain from Waterfront Centre to King George Station in Surrey, including the rolling stock, cost $1.23 billion, not including debt-servicing costs. (SkyTrain gathers speed despite cost to taxpayers – Charlie Smith on the Georgia Straight)

I have noticed that it has been frequently used by Lower Mainland advocates for Light Rail Transit and the SkyTrain-opposed. Malcolm Johnston of Rail for the Valley (which we have noted for the serious inaccuracy [LINK] in his claims):

…but TransLink doesn’t incl use debt servicing charges with their accounting methods and ignores the provinces now $250 million annual subsidy paid to SkyTrain.
(Occupy TransLink and rid ourselves of the SkyTrain cult! – Malcolm Johnston on Rail for the Valley)

….determined the real cost of the Canada Line mini-metro, which according to Chris’s research, is at least $4.5 billion, which does not include debt servicing on the provincial portion of the costs.
(TransLink Menace to Society in Metro Vancouver – Malcolm Johnston on Rail for the Valley)

and it’s happening outside of Metro Vancouver, outside of the SkyTrain vs LRT context and debate. Here it is again on a forum discussing the proposedhigh-speed rail in California:

…..$1B per mile as an average system cost is, if anything, underestimating the cost, not including debt servicing, and maintenance/operations expenses.
(Trakar on CosmoQuest Forums)

These claims about debt servicing have lead to some even more heinous and misleading claims. Once again, Malcolm Johnston of Rail for the Valley claiming that debt servicing costs make SkyTrain cost $8 billion [LINK TO ARTICLE]:

Today, we have spent over $8 billion (those pesky debt servicing charges and retrofitting costs do add up) on a SkyTrain network…
(War on Buses? Er…No, Just Very Bad Planning – Malcolm Johnston on Rail for the Valley)

None of these claims about SkyTrain debt servicing are correct. This is because the advocates who have insisted on crying wolf about debt servicing charges completely misunderstand the concept of debt servicing.

Debt servicing is officially defined as follows:

The cash that is required for a particular time period to cover the repayment of interest and principal on a debt. (Investopedia)

Debt service is the amount you pay on a loan in principal and interest, over a period of time. (About.com)

Debt service: Interest payment plus repayments of principal to creditors (retirement of debt). (Campbell R. Harvey, The New York Times Dictionary of Money and Investing)

Debt service: the amount of interest and sinking fund payments due annually on long-term debt (Merriam-Webster)

Debt servicing by definition is to pay back a loan including interest. When a large-scale capital project such as a SkyTrain expansion requires millions of dollars in funding, the millions of dollars in funding is not able to be obtained right away by stakeholders and funding provisional. These stakeholders obtain loans to fund the capital expansion project, and these loans are paid back over time by way of debt servicing. This system is used for any large capital project where funding cannot be obtained immediately from existing cash reserves.

I would like to pose a question: If there are hidden debt servicing costs associated with investments in SkyTrain expansion and are in addition to capital costs, what exactly is the debt that is being serviced?

There is no answer to the above question. Debt servicing costs are not an addition to any initial capital costs paid for a capital project; They ARE the capital costs. They are the repayment of the loans that were made to create the finances for the capital costs.

The system is comparable to having and using a credit card. With most credit agencies, your cash payments made with the credit card during the month are billed at the end of each month, to be paid immediately or within 28 days. When you pay off your credit card bill, you are servicing your credit card debt. Your ability to pay off your credit card bill on time defines your credit rating.

Especially for larger capital cost projects, the debt service is usually spread out over a number of years in a process called amortization (1. The paying off of debt in regular installments over a period of time., 2. The deduction of capital expenses over a specific period of time (usually over the asset’s life) – Investopedia). This is a term you will see commonly used on financial reports made by transit agencies such as TransLink.

Here is an example of how debt-servicing and amortization works: As highlighted in the 2011 Annual report [LINK], Translink’s 2011 annual amortization payment to the Canada Line’s concessionaire (InTransitBC) was approximately $23.3 million (highlighted on page 74). These amortization payments to the concessionaire are paying off the $700 million private sector contributions that were made by the concessionaire (InTransitBC or SNC-Lavalin/Serco) to the Canada Line project’s capital costs. A total of $23.3 million in 2011 dollars is part of a repayment that has been amortized over the 30 years of the Canada Line concession term, adding up to a total of about $700 million in 2011 dollars. This, in addition to the $1.4 billion in initial capital costs paid by the public sector, makes up the $2.1 billion capital cost for the Canada Line.

This is the first time that TransLink is directly responsible for repaying a SkyTrain project capital debt, as the creation of TransLink in 1998 maintained that the provincial government (the original authority in charge of funding and building the first SkyTrain Projects – the Expo and Millennium Line) would retain the original SkyTrain debt. This may create a perception that the original SkyTrain’s debt servicing costs are hidden to the public. These costs are not hidden from the public by either agency in charge.

Adapted from this image http://commons.wikimedia.org/wiki/File:Canada_Line_Skytrain_Bridge_from_Fraser_River_North_Arm,_Richmond.jpg taken by Jonathan Pope of Glenbrook, Australia.

A Canada Line train crosses the Fraser River

The only thing that the use of the “not including debt servicing” or “hidden debt servicing” claims conveys with Lower Mainland Light Rail advocates is a sense of desperation. These advocates are so desperate that they will use any excuse to attack SkyTrain in favour of their dream LRT system, without the background research required to support the claim.

Those concerned with Metro Vancouver transit issues should take a second glance before trusting claims made by these Light Rail advocates.