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Toronto should follow the U.K.’s privatization example


By Lawrence Solomon


Toronto Mayor Rob Ford wants a good deal for Toronto taxpayers, who lose $350-million a year subsidizing the Toronto Transit Commission, a good deal for the Toronto economy, which loses $50-million every day that TTC workers go on strike, and a good deal for Toronto transit riders, who face increasing fares and decreasing service.


Here’s a good deal. Sell the TTC monopoly for $500-million to a company that would, as a condition of sale, guarantee to freeze fares for 10 years, guarantee to expand the frequency of service, guarantee to increase the number of kilometres logged, and guarantee to continue existing routes.


That good deal was on offer in 1999, when GB Railways, a U.K. company that ran commuter lines, tried but failed to purchase the TTC. That deal might be even sweeter today, given the city’s increased population and the TTC’s expanded infrastructure.


How could GB have made that offer? It saw what happened in the UK, 10 years after the country’s public transit systems became largely deregulated. With private sector efficiencies in play, more could be done for less. In London, where private companies competed for the right to run routes as franchises, buses logged 30% more kilometres at 41% lower cost, making public transit reliable and convenient. On busy rush-hour routes, the average wait became 1.5 minutes; elsewhere, the wait averaged 6.6 minutes. New bus routes, too, were introduced for formerly-neglected areas and bus fares dropped relative to inflation. To boot, buses became smart looking, bus drivers became courteous.


But good as the 1999 deal to buy the TTC might be, there are smarter ones around. My recommendation: Don’t convert the publicly owned TTC monopoly into a privately owned monopoly system, and don’t have the TTC franchise its routes. While franchising would yield dividends at first, sooner or later politicians would force the system to subsidize uneconomic services. This meddling by politicians, in fact, brought to ruin the TTC, until the 1950s the world’s most successful transit company.


Instead, Toronto should abandon its transit monopoly in favour of a competitive transportation system. Competition would reap billions for Toronto taxpayers, it would eliminate the TTC’s annual loss of $350-million, and it would provide transit users with good service.


Ford should let any company that meets safety criteria operate any bus service it wishes along any city thoroughfare. As in London, the average wait along busy routes would become negligible, encouraging more passengers to use transit. To avoid an excess of buses plying the same route at the same time — a problem that materialized in regions of the U..K. that allowed wide-open competition — Toronto should charge the private buses for their use of roads on the basis of the traffic congestion at different times of the day. Congestion charges such as these have decongested roads wherever they’ve been applied. To do better still, Toronto should sell bus stops along busy blocks to competing private traffic management companies. These managers would not only provide waiting passengers with shelter and other amenities, they would operate the stops to avoid congestion, the way airports manage airplane takeoff and landing slots to avoid pileups.


The city would then reap revenue from the congestion charges on roads and the sale of sidewalk space for bus stops. Passengers and car drivers alike would benefit from decreased traffic congestion.


What works for buses would also work for streetcars and rapid transit cars, which should likewise be sold to private operators. One upshot: Customers would obtain an unparalleled number of travel choices. Another: Strikes, always a worry in Toronto, would be irrelevant in this new travel environment — if one company struck, the others would quickly move in to grab its customers.


Competition should also see the light of day in Toronto’s subway system, whose dismemberment into logical business units would show its parts to be worth more on their own than when summed into a whole. Every subway station should be sold separately and to the highest bidder, generally a real estate developer or retailer who would know how to capitalize on one of the subway’s chief assets — the pedestrian traffic that it attracts. The TTC now values its buildings at about $1-billion. On the auction block, its stations would fetch many times that.


The subway tunnels and tracks would need to remain a monopoly operation, but they needn’t stay in government hands: They should be sold to a government-regulated tunnel operator to allow the city to reap another windfall, and to give the tunnel company a profit motive to both improve service on the existing tunnels and to bore new ones when a business case presents itself. The trains themselves need not be monopoly run — different train operators could ply the same tracks, offering transit users choices many would crave — value-added cars could offer passengers plush seats, drinks and video entertainment, for example. (this would be so sweet, ride Metro in first class with leather seats, plasma TV and champagne :D)


These sales and revenue streams from transit-related properties would net the city a bonanza that could run into the tens of billions, making child’s play of Ford’s presumed challenges in meeting his tax-cutting election promises. In fact, these transit reforms would simultaneously allow Ford to meet or exceed much of the balance of his election platform. Toronto would have a much smaller government. With decongested roads, his car-friendlier Transportation City pledge would be realized. And, with transit companies competing for their customers’ business, the toughest nut to crack in Ford’s pledge to “deliver customer service excellence” — the TTC’s notoriously surly staff — would be civilized by being privatized.


Financial Post


Lawrence Solomon is executive director of Energy Probe and Urban Renaissance Institute and the author of Toronto Sprawls (University of Toronto Press).

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fairy tales in fairy land ...someone's been smoking the good stuff !


Si t'as rien à dire d'intelligent, retiens-toi.


Cette formule pour le transport en commun existe et fonctionne depuis bien longtemps, c'est rien de nouveau ni de sorcier.

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it's not like that ... c'est juste le ton de l'article qui m'agace; un peu trop de pensee magique a mon gout. si c'etait si simple et surtout, aussi profitable que l'auteur le suggere, tout les reseaux majeurs du monde opereraient toujours de cette facon. si operer une ligne sur du parc ou pie ix peut semble etre une bonne affaire, je ne connais pas beaucoup de compagnies privees qui voudraient aller desservir riviere-des-prairies ou beaconsfield. et dans le meilleur des cas, on se retrouve avec une mosaique desorganisee de circuits disconnectes...


peut-etre que, pour montreal, la stm/amt pourrait permettre a des compagnies d'operer un service sur ses axes les plus achalandes, en autant que la perception des titres puisse se faire de la maniere la plus "seamless" possible pour les usagers.


there are just things in this life that won't turn a big profit and yet that we need to have regardless; the author of that article can go back to dreaming about having champagne on the subway ...

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Si t'as rien à dire d'intelligent, retiens-toi.


Cette formule pour le transport en commun existe et fonctionne depuis bien longtemps, c'est rien de nouveau ni de sorcier.


La situation du réseau de transport londonien est désastreuse. Ils ont signé des contrats pour de nouvelles lignes de métro, ils n'ont jamais eu moyen de les honorer.


Metrolink a annulé un énorme contrat l'an dernier ( Bombardier en fait partie) du à des dépassements de coûts.


Excepté quelques lignes, le métro est vieux, sale, et peu fiable.


Le Royaume-Uni dans son ensemble, grand partisan des privatisations, est le pays occidental le plus en déclin en ce moment.


Alors je ne vois pas trop en quoi c'est un exemple à suivre !!!

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Le cas de la GB est celui qu'il ne faut PAS suivre, selon plusieurs chercheurs et penseurs.


In the U.K. privatizing railways entailed cost overruns, accidents and, finally, the bankruptcy of the rail infrastructure company


Extrait de: Clifford Winston - Last Exit: Privatization and Deregulation of the U.S. Transportation System, Brookings Institution. p.142. 2010.

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Je suis satisfait du service de la STM, donc pour moi l'urgence de tout privatiser n'est pas là. Puis, j'avais vu un reportage sur Bangkok où les transports publics sont privatisés et cela donne un manque de coopération entre les différents moyens de transports. Par exemple les stations de métro n'ont aucune coordination avec les trajets d'autobus, et ainsi de suite puisqu'ils sont en ''compétition''...

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