British Columbia Auditor-General John Doyle’s omnibus report on the B.C. government’s reporting practices states that the Port Mann project office (the Transportation Investment Corp.) should not be categorized as a “government business enterprise” since its prospects for profitability are murky. “The financial model developed by the TIC forecasts that it will not be profitable until 2017/18,” says the A-G. Perhaps more significantly, he adds, the government’s traffic and revenue estimates may be wrong. The Port Mann project investment, he suggests at the top of his report, should be regarded as taxpayer-supported debt.
Provincial Finance Minister Kevin Falcon, the driving force behind the Port Mann project during his time at Highways, has already rejected Doyle’s recommendation; the project will continue to be regarded as a self-financing enterprise. (The Transportation Investment Corporation’s 2011-2012 annual report reaffirms on page 7 that tolling will generate “the revenue neccessary for repayment of the project debt.”)
Hearing about this controversy, I reviewed the forecasts and actual revenues for TransLink’s Golden Ears Bridge, a tolled facilility in Metro Vancouver that opened in 2009. The forecasts are contained in Appendix I (for Indigo) of the 2005 GEB Case Reference Report. I have a peculiar history with this project; during the 1990s, I argued, as a provincial communications officer, that the bridge should not be constructed because of lack of demand; from 2006 to 2009 I was a representative for the bridge contractor, communicating with residents, businesses and local governments. I have an affection for the Golden Ears Bridge, and it is useful for many people in Maple Ridge, but here’s what the numbers say:
- Golden Ears Bridge toll revenues in 2011 are now forecast to pay just half the bridge’s $71 million financing and operating cost for the bridge. From a “glass-half-full” perspective, it’s true that the regional transportation authority is getting some toll revenues. However, I think many people expected that tolls would pay the full cost of the GEB project. This year’s projected $36 million dollar shortfall will suck up almost all the proceeds from a proposed 2 per cent lift in the regional fuel tax.
- Projected toll revenues are more than 25 per cent below the 2005 forecast.
- The number of vehicle crossings is 6 per cent below what was forecast at the start of this year, despite efforts to draw more customers with reduced night and weekend rates. Revenues are 9 per cent below start-of-the-year forecasts.
Either our forecasting assumptions are too aggressive, or people really are changing their driving habits, for whatever economic or cultural reasons. I would expect that the Port Mann project’s revenue forecasts, which date from about 2008, were highly optimistic and have been sliding as well. The Sightline Daily reported in March 2011 that this is an issue for highway and bridge tolling systems across Cascadia. Anthony Perl, a prominent urban studies professor at Simon Fraser University, has said that both the Golden Ears Bridge and the Port Mann Bridge are “white elephants” and will be under-utilized forever more.
The fact is, however, that we can’t put the toothpaste back in the tube; the Golden Ears Bridge is built, and the Port Mann Bridge is a-building.