Monday, April 14, 2014

SkyTrain factory lease saving taxpayers money

It seems that TransLink cannot get a break when it comes to bad PR. Last week, there was a bit of hoopla about the building TransLink is leasing to renovate the old Mark I SkyTrain cars. These cars were delivered between 1984 and 1995. Stories in the media paint a picture of waste at TransLink, but there is more to this story.

Before 1999, transit in Metro Vancouver was delivered by the province through BC Transit. Today, BC Transit delivers public transit outside of Metro Vancouver. When the responsibility to deliver transit service was given to the region via TransLink, the province still retained control of some parts of the transit system. The province created Rapid Transit Project 2000 Ltd to deliver the Millennium Line.

BC Transit and Rapid Transit Project 2000 Ltd own land, some SkyTrain and West Coats Express equipment, and the Expo and Millennium Line SkyTrain guideways. The provinces, through these crown corporations, granted TransLink the ability to use this infrastructure under a long-term lease. The lease currently requires a payment of $1 per year.

As part of the Millennium Line project, the province gave Bombardier the contract to build SkyTrain cars for the line. One of the requirements of the contract was to have “built in BC” components in the cars, so Bombardier built a $15 million factory next to the SkyTrain operation centre. With the Millennium Line complete, Bombardier sold the site in 2004. Subsequent SkyTrain vehicles purchased by TransLink would be made in Mexico due to lower costs.

The original Mark I SkyTrain cars are coming to the end of their useful life. TransLink was going to spend $262 million on new Mexican SkyTrain cars to replace this aging fleet. Due to the lack of funding for transit in the region, TransLink decided to refurbish the old SkyTrain cars for $37.9 million to extend their useful life by 15 years instead. Included in the $37.9 million is the cost to lease the old Bombardier SkyTrain factory. Once the SkyTrain cars are refurbish, TransLink will have no further use for the old factory.

TransLink never owned the SkyTrain factory nor did it have any control over its construction. When Bombardier sold the site in 2004, TransLink would have had no use for the building. If the agency did buy the building, it would have been accused of wasteful spending. If the province purchased the building, it would have also been accused of wasteful spending. If there is any blame, it would be that the provincial government of the day required “built in BC” SkyTrain cars for political purposes.

Of course if this didn’t happen and the factory was never building, refurbishing the SkyTrain cars would have at least doubled in cost. So in the end of the day, TransLink ability to lease the facility is actually saving taxpayer’s money.

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