A new report that evaluates major recently-built or planned rail public transit projects across Canada has deemed Surrey’s proposed light rail transit system as a mistake given the poor value it will create for both passengers and taxpayers.

According to Mario Iacobacci’s evaluation and synthesis of business case reports of Canadian transit projects, released in a study published by the School of Public Policy at the University of Calgary, the first phase of the ground-level light rail project “is expected to destroy value”.

The first phase is L-shaped, running a length of 11 km between Guildford Town Centre, Surrey City Centre, and Newton Town Centre.

Iacobacci cities a previous TransLink-commissioned study which found that light rail will have a poor benefit-cost ratio (BCR) of 0.69, resulting in an economic loss of $510 million in 2010 dollars.

The best alternative to this light rail plan would be a 17-km extension of the existing SkyTrain Expo Line to Langley along Fraser Highway, which has a BCR of 1.55. Another optimal alternative is the SkyTrain extension to Langley coupled with bus rapid transit on the L-shaped corridor that is set to see light rail.

Iacobacci notes that a bus rapid transit alternative, with its BCR of 1.15, for the L-shaped route would be a “superior alternative” to light rail.

The City of Surrey is pushing TransLink to build both the first and second phases of the Surrey rail rapid transit project as light rail.

While light rail for the first phase almost seems to be a certainty at this point of planning, TransLink’s preferred technology for the second phase to Langley has not been identified. Iacobacci asserts that if phase two is an extension of existing SkyTrain infrastructure – instead of Surrey’s desired light rail – such a switch would “improve the business-case results significantly” and “could restore the overall project to net positive value creation”.

It should be noted that the study cited by Iacobacci revolves around an older construction cost estimate of $2.2 billion for both phases combined; the last publicly known figure is $2.6 billion, but the final yet-to-be-released estimate is expected to be higher, with the first phase’s L-shaped line likely at over $1 billion.

A higher construction cost would likely send the BCR even further into the red.

Conversely, Iacobacci’s comparisons of business case data indicates three other rail rapid transit projects in Metro Vancouver have high positive value creation, unlike Surrey light rail.

The Millennium Line’s recently completed Evergreen extension had a BCR of 1.27 and net value creation of $197 million in 2008 dollars. Ground-level light rail was previously proposed for the Evergreen extension, but Iacobacci says the SkyTrain option that was ultimately built delivered “the greatest economic value” of the alternatives.

Likewise, the Canada Line also had a similar positive BCR of 1.25 million, and its net economic value creation was $295 million in 2001 dollars. Furthermore, if the Canada Line were delayed and completed in 2021, it would have a BCR of 1.53 and a net value creation of $359 million.

Most strikingly is the value of a full SkyTrain extension of the Millennium Line from VCC-Clark Station to the University of British Columbia. The full extension is by far the best option, with a high BCR of 2.3 and a staggering value creation of $2.257 billion in 2010 dollars.

But TransLink is currently planning the SkyTrain extension project in phases, with the first phase to Arbutus Street and the second phase to the campus. The exact BCR and economic benefit of performing the project in two phases is not publicly known.

Iacobacci studied the business cases of recent or planned rail rapid transit projects worth $500 million or more in the regions of Toronto, Montreal, and Vancouver.

“When governments announce that they are going to spend vast sums of taxpayers’ money on a new public infrastructure project, you can be certain they will praise all the terrific new benefits that the project will bring to citizens, making everyone’s life easier, safer, greener and better,” he wrote. “But this does not tell us whether we are better off as a society, after accounting for the cost of these projects borne by taxpayers today and well into the future.”

“That new commuter train might look sleek and shiny and seem convenient for some, but a close business case analysis of recent transit projects in Canada’s three largest cities suggests that in as many as four cases out of 21 projects, the burden of paying for the projects does not justify the public investment.”

Factors that determine the results of a business case for a rail rapid transit project include travel-time savings, reliability, ability to reduce the number of drivers, safety benefits, ridership revenue, construction cost, operating costs, environmental benefits and impacts, economic development impacts, land value impacts, and land use shaping.

The City of Surrey has emphasized the economic development, land value, and land use shaping factors in its reasoning for its push for light rail.

But generally, Iacobacci says factors directly relating to transportation and the environment, in relation to the construction and operating costs, should be the main determinants of BCR.

“Most of the economic-development impacts cannot be incorporated as benefits into the BCR calculation,” he said. “This is the case for both standard economic impacts and land value impacts, both of which cannot be considered incremental in that they would likely have occurred even without the project.”

“It is not appropriate to add the impacts for all other account and/or to weight the accounts in any way.”

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