ION Phase 2 - Cambridge's Light Rail Transit

[Bytor]

So they assumed a construction inflation rate of 3.6% per year. That is not out of the realm of possibility, but is probably on the higher end of what is likely to happen. The last 2 years were crazy for predicting costs. I don't know what the historic rate of inflation for the construction industry is, but I imagine it is closer to 2 - 2.5%. 

Unfortunately construction inflation has been much higher than that. During the 2010s, when the original ION construction happened, construction inflation averaged 6% annually. Covid spiked that into the double digits. If they're assuming "only" 3.6% annual construction inflation, they're likely severely underestimating the costs of stage 2.

If we can't figure out, as a society, how to get construction inflation under control we're getting very close to not being able to build anything. Nevermind transit, we won't even be able to build housing for our population.

At 6% annual construction inflation we'd be looking at:
- $2.72B capital cost (2022$)
- $2.44B construction inflation (2033$)
- $1.03B contingency (2033$)
Which would give a $6.2B total cost (2033$).

It is important to adjust for "regular" inflation when talking about 2033$, as we can expect wages, etc (and therefore the tax base) to approximately track general inflation. Assuming 2% annual inflation then $6.2B (2033$) is about $5B (2022$), or the official estimate (3.6% annual construction inflation) would be about $3.6B (2022$). $3.6B in present-ish-day dollars is still far too much to be spending on the Cambridge extension though.

Don't forget that tidbit from the Council meeting about hot this Stage to cost estimate was only -25% to +50% accurate and that the numbers given out were the high end, that +50% end of that envelope.

That means the actual likely costs are as much as one third less from the $4.76B getting bandied about.

[Bytor]

It sucks, but I think you need to keep in mind just how much 4'500'000'000 is...and it would no doubt go well over that.

That's not something that you can say with certainty.

First, something that came out of the Council discussoons on Stage 2 ION on Wednesday was that Stage 1 had an initial budget of $818M and $12M or 1.5% was contingency., so $806M. The Problems with Bombardier and disagreements with GrandLinq on some things added $50M to the budget, bring it up to $868M, or $806M + $62M contingency. That's 7.7% contingency or over budget, whichever way you want to put it.

Second, what also came out of that Wednesday meeting was that the cost estimation was done with only an accuracy of -25% to +50%, a very wide range, and that the numbers publicised re cost were that maximum +50% number. The further you get from the centre of that estimate the less likely the estimate is.

That means the real likely cost is not $2.72B in 2022$, but rather $272B / 150% = $1.81B, far closer to and much more in line with the previous estimates of $1.4B to $1.6B from a handful of years ago.

Further, that means that the $1B of estimated inflation to 2033, which was assumed to be ~3.2%, is really only $670M for a total of $2.48B.

In turn, that means the 20% contingency is not $744M, but really only $496M, bring it to $2.98B in 2033$, not $4.76B.

But, since we now know what do to, what not to do, and how to do it, lesson learned and all that, and we need less than 8% contingency last time, do we really need and would we even use a 20% contingency? 10% woudl bring it down to $2.72B in 2033 dollars.

So why is the Council only harping that top unlikely cost of $4.76B? It's almost like they are deliberately trying to kill the project by doing that.

Just to make sure I didn't misunderstand what was said in Council about that -25% to +50% estimate, I have requested a copy of the report in which that estimate was made.

[ac3r]

It sucks, but I think you need to keep in mind just how much 4'500'000'000 is...and it would no doubt go well over that.

That's not something that you can say with certainty.

First, something that came out of the Council discussoons on Stage 2 ION on Wednesday was that Stage 1 had an initial budget of $818M and $12M or 1.5% was contingency., so $806M. The Problems with Bombardier and disagreements with GrandLinq on some things added $50M to the budget, bring it up to $868M, or $806M + $62M contingency. That's 7.7% contingency or over budget, whichever way you want to put it.

Second, what also came out of that Wednesday meeting was that the cost estimation was done with only an accuracy of -25% to +50%, a very wide range, and that the numbers publicised re cost were that maximum +50% number. The further you get from the centre of that estimate the less likely the estimate is.

That means the real likely cost is not $2.72B in 2022$, but rather $272B / 150% = $1.81B, far closer to and much more in line with the previous estimates of $1.4B to $1.6B from a handful of years ago.

Further, that means that the $1B of estimated inflation to 2033, which was assumed to be ~3.2%, is really only $670M for a total of $2.48B.

In turn, that means the 20% contingency is not $744M, but really only $496M, bring it to $2.98B in 2033$, not $4.76B.

But, since we now know what do to, what not to do, and how to do it, lesson learned and all that, and we need less than 8% contingency last time, do we really need and would we even use a 20% contingency? 10% woudl bring it down to $2.72B in 2033 dollars.

So why is the Council only harping that top unlikely cost of $4.76B? It's almost like they are deliberately trying to kill the project by doing that.

This is absolute nonsense. The Region of Waterloo did not just inflate numbers to "kill the project". Do you really think this is how things work? Lol.

I don't know what kind of education or career background you have in regards to massive building and infrastructure projects (if any), but I can tell you're just making stuff up here for some reason.

This price could potentially be reduced but it isn't going to be (not by much, anyway). This project may or may not go ahead (hopefully not) but if it does indeed, the invoice is going to be about what they're already asking for.

[Bytor]

That's not something that you can say with certainty.

First, something that came out of the Council discussoons on Stage 2 ION on Wednesday was that Stage 1 had an initial budget of $818M and $12M or 1.5% was contingency., so $806M. The Problems with Bombardier and disagreements with GrandLinq on some things added $50M to the budget, bring it up to $868M, or $806M + $62M contingency. That's 7.7% contingency or over budget, whichever way you want to put it.

Second, what also came out of that Wednesday meeting was that the cost estimation was done with only an accuracy of -25% to +50%, a very wide range, and that the numbers publicised re cost were that maximum +50% number. The further you get from the centre of that estimate the less likely the estimate is.

That means the real likely cost is not $2.72B in 2022$, but rather $272B / 150% = $1.81B, far closer to and much more in line with the previous estimates of $1.4B to $1.6B from a handful of years ago.

Further, that means that the $1B of estimated inflation to 2033, which was assumed to be ~3.2%, is really only $670M for a total of $2.48B.

In turn, that means the 20% contingency is not $744M, but really only $496M, bring it to $2.98B in 2033$, not $4.76B.

But, since we now know what do to, what not to do, and how to do it, lesson learned and all that, and we need less than 8% contingency last time, do we really need and would we even use a 20% contingency? 10% woudl bring it down to $2.72B in 2033 dollars.

So why is the Council only harping that top unlikely cost of $4.76B? It's almost like they are deliberately trying to kill the project by doing that.

This is absolute nonsense. The Region of Waterloo did not just inflate numbers to "kill the project". Do you really think this is how things work? Lol.

I don't know what kind of education or career background you have in regards to massive building and infrastructure projects (if any), but I can tell you're just making stuff up here for some reason.

This price could potentially be reduced but it isn't going to be (not by much, anyway). This project may or may not go ahead (hopefully not) but if it does indeed, the invoice is going to be about what they're already asking for.

You're ignoring that the they literally sayings in council that estimate was not a very precise one and had a very wide range, -25% to +50% wrong.

[Bytor]

Cambridge mayor Jan Liggett says some even more dumbfounding things about Stage2 ION LRT to Cambridge, part 2.

https://vm.tiktok.com/ZM2F3r5SC/

[jeffster]

Small Cities, Big Transit by Taras Grescoe
Turns Out You Don't Have to Be Chicago-Sized to Have Rail Rapid Transit

Somehow they can do things at a fraction of a cost at those locations.

$4.5B for this project through Cambridge isn't doable. Something like this would add at least $50/month to your property tax bill (assuming we pay it over 30 years). That's a huge cost for something that is useless for 90% of the population. Even if we got a cost sharing agreement with the feds and province, this is still 5x the cost of Phase 1. Insane.

[Bytor]

$4.5B for this project through Cambridge isn't doable. Something like this would add at least $50/month to your property tax bill (assuming we pay it over 30 years).

The total tax bill for Stage 1 construction was $587 over 7 years per property owner. Or about $6.99 per month.

Multiplied by 5x that's $34.94/mo/property for 7 years.

That's a huge cost for something that is useless for 90% of the population.

But it isn't, though. It is still very useful, they just chose not to use it.

Not to mention that public transit is still useful to people even if they don't directly use it themselves. Imagine what would happen to traffic is GRT and ION shut down tomorrow and all those people each bought a car to drive around with.

Even if we got a cost sharing agreement with the feds and province, this is still 5x the cost of Phase 1. Insane.

[bravado]

Still not a single article or discussion from anyone involved about why Milan can build 15km of tunnel for $2.5B, but not us. Just more focusing on the price, not actually about what's included in that price..

https://twitter.com/mattyglesias/status/...7716374529

Just this weekend I was going from Gateway back to Cambridge and I noticed that the extra-wide shoulder on the new section of the 401 across the river is actually wider than a 2-track span of light rail and yet we don't even know how much it cost to widen the 401 for the last 10 years. But we all know how much it costs to build phase 2.

[tomh009]

Yes, not really clear whether the scope of construction is the same or not.

But I'll note that the Milan M4 line work was scheduled to be completed in 2015, and it's currently been adjusted to 2024. They may yet end up at a ten-year delay ...

[Acitta]

'Stop procrastinating and extend LRT,' says regional chair
Regional chair Karen Redman says the region has already seen the cost of procrastination, now it's time to build

[dunkalunk]

We've got a legacy to build! Onward to Cambridge?

[danbrotherston]

Politicians don't care much about stuff beyond ribbon cuttings.

And Redman is nothing if not a politician.

She wants it built because it will give her a ribbon cutting...she doesn't care about anything beyond that.

[Bytor]

Politicians don't care much about stuff beyond ribbon cuttings.

And Redman is nothing if not a politician.

She wants it built because it will give her a ribbon cutting...she doesn't care about anything beyond that.

If that gets it built, I will give them all the ribbon cuttings they want.

Better that than ones like Ford to who actively try to cancel projects.

[danbrotherston]

Politicians don't care much about stuff beyond ribbon cuttings.

And Redman is nothing if not a politician.

She wants it built because it will give her a ribbon cutting...she doesn't care about anything beyond that.

If that gets it built, I will give them all the ribbon cuttings they want.

Better that than ones like Ford to who actively try to cancel projects.

I still don’t think we should build bad things. For 4.5 billion we aren’t getting good value. I’m not saying we should build roads instead but there is a whole lot of transit we could buy for 4.5 billion. RM transit points out that if we cannot control costs we will get very little transit for our dollars—much less than we need. This could not be a more on point example. We still need phase 3 and 4 to happen. But Redman doesn’t.

[ac3r]

I watched that recent video from RMTransit where he discusses costs and wish he touched on this. It would have been a real good example to look into for the video because I think lots of viewers would agree and ask "4.5 billon dollars for THAT?!?"

It's a ridiculous price tag to pay and I sure as hell hope we don't do it. Heh, maybe I need to start voting Conservative.