Metropolitan Express Network | Privacy is not the magic bullet

So the private sector (the Caisse de depot et placement du Québec) was going to carry out the largest public transport project from the Montreal metro on time and on budget?

This beautiful idyllic scenario promised by Quebec and the Caisse in 2016-2017 did not materialize.

Last week, the Caisse announced a third postponement of the inauguration of the Metropolitan Express Network (REM). Initially, the REM was to run in the summer of 2021. It will finally be in the spring of 2023 for the South Shore section, and at the end of 2024 for the Deux-Montagnes and West Island sections.

This postponement is frustrating for users, but the Fund has undoubtedly made the right decision. Better to postpone than to have a botched launch. And the REM remains the most structuring public transit project in Quebec since the Montreal metro in 1966.

Our enthusiasm for the REM does not, however, blind us: the Caisse did not deliver on time. The construction of the first section of the South Shore was supposed to take three years and three months (we count from the first shovelful of earth), it will take four years and nine months (+ 54%). Admittedly, the Fund could not foresee the pandemic and the global supply problems, responsible for some of these delays. But she was behind schedule before the pandemic.

Another promise that has not aged well: the Fund, unlike the public, will be able to meet the budget.

It won’t.

Again, it’s not that surprising. Cost overruns are characteristic of almost all major structuring public transit projects. They average 45% for train projects, Oxford University professor Brent Flyvberg found in a 2014 study.

When the Caisse completed its financing in 2017, the budget was 6.04 billion. Since then, there have been several unforeseen events.

When last updated in May 2021, the Caisse calculated the REM bill at 6.9 billion. Add the additional bills and delays since May 2021. In the best-case scenario, the bill will increase by several hundred million.

With a cost overrun of 45% (the average of the Oxford study), the cost of the REM would reach 8.8 billion.

In addition to the official REM budget, governments and other public authorities have invested at least a billion dollars in related expenditures to adapt to the REM (eg highway ramps, bus stations, decontamination). Counting the REM budget and all related expenses, UQAM professor Florence Junca-Adenot arrives at a total bill of 9.31 billion in March 2022 (1).

We are waiting to see the final invoice before deciding on the management of the Fund. We can then compare the REM to similar projects abroad.

In London, the Crossrail line, built by the public authorities, took 13 years to build instead of nine years (+44%), with a budget 23% higher than expected. This is proof that the public can successfully carry out large-scale projects.

In Toronto, Line 5 Eglinton is expected to take 12 years to build rather than nine. In Edmonton, the inauguration of a streetcar has just been postponed without giving a new date. In these two projects, financial transparency is minimal. When we compare ourselves to the rest of Canada, we console ourselves…

Instead of building the largest public transit project in decades, the Couillard government chose in 2016 to outsource this mandate to the Caisse. Quebec has abdicated its responsibilities for budgetary reasons (cheaper in the short term) and logistics (it would be more efficient, he said to himself). This public-private partnership (PPP) model has clearly shown its limits with the aborted REM 2.0 project in the East.

It is to be hoped that the REM 1.0 will be a huge success. Especially for users.

But for our next structuring public transit projects, it is better to strengthen the expertise and powers of the public sector.

It is not up to the private sector to plan our public transport. Even if it’s our collective woolen sock.

(1)M^me Junca-Adenot included in this sum 800 million for 20% of the construction cost of the Samuel-De Champlain bridge (the REM uses this bridge).