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Dec 13, 2012  |  Vote 0    0

Auditor’s critical of Metrolinx for high costs on Presto, Union Station

City Centre Mirror
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A spending report on provincial agencies released this week by the Ontario auditor general criticizes Metrolinx for “overly optimistic” projections for annual ridership on the upcoming Union Pearson Express air rail link (ARL).

Metrolinx, which is building the link connecting Union Station with Pearson International Airport, estimates around 1.8 million riders will take the line during 2015, its first year of existence, to increase to three million by 2018.

But AG Jim McCarter’s report, released on Wednesday, Dec. 12, questions those estimates given the link’s potential high fare cost of between $20 and $30 for a one-way ticket compared to similar North American air rail connections which range from $1.60 to $13.

While Metrolinx has not finalized fare costs, the report says the provincial transit planning agency failed to take into account negative feedback from residents during a 2011 study, which indicated 75 per cent of the respondents wouldn’t use the service if it costs more than $22.50.

“We believe that the ARL’s high fare will negatively affect the projected ridership capture rate,” states the report, which recommends Metrolinx should regularly update its forecasting to ensure the most accurate ridership estimates.

The report also questions preliminary estimates on the ARL’s annual operating budget, suggesting the $30-million figure provided by Metrolinx could increase to an estimated $50-million if the provincial government seeks to recoup capital costs – estimated to be $456 million by the report – for the project.

Metrolinx also faced criticism for cost overruns associated with the Presto fare system which have ballooned to more than $700 million, from an estimated $250 million, if costs for developing next-generation card readers are considered.

According to the report, the “tap on” fare card for the GTHA is now among the most expensive in the world. The report also says Presto’s current limitations prevent municipal transit agencies from eliminating old fare systems, resulting in a mere 18 per cent usage rate among GTHA transit services.

Among 905 transit agencies that number drops to six per cent. At a recent board meeting Metrolinx officials said a majority of GO riders, around 400,000, now use Presto.

The TTC recently signed an agreement with Metrolinx to install Presto next generation card readers on all vehicles by 2016. The auditor general’s report, which is released annually and looks at the spending history of various Crown agencies, also listed as a concern costs associated with ongoing renovations to Union Station, such as the restoration of the train shed roof covering passenger platforms and tracks.

The price tag for the renovations could reach $270-million which would be 25 per cent more than what Metrolinx originally estimated.

A recently completed project to replace more than 100 rail switches for changing tracks in the Union Station rail corridor has ended up costing taxpayers $87-million- more than double initial projections of $38-million. Metrolinx spokesperson Anne Marie Aikins said the planing agency accepted the findings of the report.

“Metrolinx has already implemented many of the AG’s recommendations and will have completed the remainder as quickly as possible,” said Aikins in an email.

David Salter, press secretary for provincial transportation minister Bob Chiarelli, said Metrolinx had already addressed several concerns stated in the report, including securing the Canadian intellectual property rights for Presto from developer Accenture, which will hold on to the international rights for the technology.

Salter said cost overruns from the Union Station revitalization could be attributed in part to the need to replace dated technology from the past century. “There were a lot of challenges dealing with that very old infrastructure,” said Salter on Thursday morning.

“When you’re dealing with plans from the 1920s, some of them could be wrong, so the project was more expensive than anticipated.” He said Metrolinx would engage in more pilot projects to gain a better understanding of the costs and risks entailed before approving a multiyear commitment.

Even with the cost overruns, Salter said Metrolinx as an organization has consistently stayed within its capital budget. While no final decisions have been made regarding fares for the ARL, he said the eventual ticket price would be comparable with other services around the world.

To read the report, visit www.auditor.on.ca

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