Saturday, May 3, 2008

Funding Ottawa's transit plans, part five: Privatisation

The recent strikes of the Toronto Transit Commission has once again raised the idea of at least partial privatisation of the Torontonian transit system, according to the Globe and Mail. Would it be prudent for Ottawa to look into such a possibility? The story lays out the background, and runs over a few of the pros and cons:

Advocates say privatization will cut costs and improve services across the city. Detractors warn that it could lead to a mish-mash of companies servicing only the most popular routes, leading to poorer overall service, less central cohesion and no significant savings for the city.

“For thousands of Torontonians, the TTC is critical to their lives. They'll be very careful about changing the status quo,” Ward 34 councillor Denzil Minnan-Wong said. “Just selling the TTC outright to a private company and putting a ‘for sale' sign outside the doors of the TTC is unacceptable to the public, because it's so important to them.” So what is there to gain or lose by whittling down the TTC?

Despite regular commuter gripes about late service, the TTC is one of the most efficient transit systems in the world, in terms of operations, according to a TTC-commissioned study in 2003.


He [former Toronto budget chief David Soknacki] argues that it's vastly outdated: People no longer simply live in the suburbs and commute to the core. They need flexible service.

But outright privatization, he warns, could lead to private enterprise “cherry-picking” the most profitable services – and leaving the taxpayers to fund the rest. Instead, Mr. Soknacki suggests something in between: Split the TTC into specialty divisions and create one controlling body to oversee it and other Greater Toronto Area service providers.

“The administration has the choice of making fundamental changes to the TTC or watching those changes being made for it,” he said. “It's a shame, because the TTC could be leading [transit provision] instead of following.”

The story went on to talk about the city of London, England, where privatisation of public transit was done with mixed results:

London is held aloft by both camps as an example of the pros and cons of privatization. Those trumpeting the cons include TTC chair Adam Giambrone, who points to the failed privatization of London's iconic Underground as a cautionary tale. Contractors were paid to maintain and renew the Tube network while the government agency Transport for London (TfL) retained ownership of tracks, trains and stations.

But last year the five-corporation body called Metronet Rail BCV Ltd. that took on two of the three $34-billion contracts incurred debts of at least $4-billion, leaving TfL and the City of London to cover the loss. “There are no other major centres [outside London] that run privatized operations. There's a reason,” Mr. Giambrone said.

Above ground, however, London's bus reform is a glowing privatization success story, said Ben Dachis, a policy analyst for public-policy think tank the C.D. Howe Institute.

“The bus services in the U.K. after privatization are just off-the-charts better than they were before,” he said. “Prices are way down, service is way up. … The best way to get around London these days is on the bus. No one takes the Underground.”

I know Ottawa has tried some P3 (public/private partnership) experiments and, I'm no expert, but I don't think they've been either glowing successes or abysmal failures. The biggest problem for me would be ensuring some level of co-operation between various organizations, but the City of Ottawa already has to do so between OC Transpo and STO (Société de transport de l'Outaouais, the transit authority across the river).

Anyway, it's another option to think about.


John G said...

Transit privatization is a terrible idea. Absolutely terrible! Here is a video that clearly shows how/why transit privatization has failed around the world. We should not privatize our system!

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