When you are fed a THINK BIG meal about transportation hubs from the Mayor and Council, be careful that the meat described as steak is not really bologna.
I guess DRTP can never give up. When you see the costs so far you will know why.
Is it now to be first a new doublestack CP Rail rail tunnel and then to be followed by the DRTP truck expressway (probably in Ward 2 with DRTP North only) with a Lauzon/E C Row connection to Highway 401? Before, it was positioned differently, the other way around. The Michael Nobrega speech and Bill Muir "tunnel and corridor to Highway 401" should put us on absolute guard all over again!
I guess DRTP can never give up. When you see the costs so far you will know why.
Is it now to be first a new doublestack CP Rail rail tunnel and then to be followed by the DRTP truck expressway (probably in Ward 2 with DRTP North only) with a Lauzon/E C Row connection to Highway 401? Before, it was positioned differently, the other way around. The Michael Nobrega speech and Bill Muir "tunnel and corridor to Highway 401" should put us on absolute guard all over again!
I recently found a speech by Michael Nobrega, the new head of OMERS. It gives us information about DRTP that we did not know including why it may still be around. It also tells what the future of OMERS is with him as Chief especially in relation to infrastructure investing.
As a taxpayer and therefore an indirect contributor to OMERS, I am worried about "investment specialists motivated by pay-for-performance incentives."
Mr. Nobrega does point out that there are risks to investing in infrastructure:
- "Fourth are political risks. Governments can change their minds about privatizing assets even after you have invested considerable time and money in due diligence, structuring the deal and negotiating the asset transfer...
Our vision for a high-volume rail and highway trade link between Canada and the United States continues to be on hold for political reasons. While we are confident that the project will ultimately succeed in some form, in the interim, the cost to Canada and the United States in terms of trade and productivity is enormous...
We invested $175 million in the Detroit River Tunnel Project, a rail tunnel between Windsor and Detroit. CP Rail, one of Canada’s two continental railroads, is our partner. We are committed to investing another $300 million of equity to significantly expand this corridor to create a one-billion-dollar trade gateway asset."
The amount of money put into DRTP is shocking...I did not know that billboards are that expensive in Windsor. I also did not know DRTP was stopped for "political reasons." All this time I thought that the arguments that we at STOPDRTP made were persuasive. {Sigh}
What it also says is that OMERS/Borealis and CP Rail were never going to put in all of the money in the initial $600M project, as we already knew, and I do not see them saying that they are going to commit a huge amount of money for their underground solution. A $1B asset only....it does not look like Mr. Nobrega sees a tunnel ever being built along the entire DRTP corridor since a tunnel would cost much more than that using DRIC's numbers or even those of Marge Byington in Lansing ($2B). Scratch off "Rails-to-Trials" as our friendly solution.
I must admit that I thought that DRTP was still around since one does not write-off assets while a Government investigation is underway. But I do not think that is the complete reason why.
Mr. Nobrega clearly has a vision for what Borealis will do in the future and cannot afford to be seen as making a mistake. PLUS there is supposedly a P3 desire for the new crossing. By the way, I did not see mention of the the write-down of "$183 million of private equity and infrastructure assets to ensure these assets properly reflect current market conditions" in the 2003 financial year.
What it also says is that OMERS/Borealis and CP Rail were never going to put in all of the money in the initial $600M project, as we already knew, and I do not see them saying that they are going to commit a huge amount of money for their underground solution. A $1B asset only....it does not look like Mr. Nobrega sees a tunnel ever being built along the entire DRTP corridor since a tunnel would cost much more than that using DRIC's numbers or even those of Marge Byington in Lansing ($2B). Scratch off "Rails-to-Trials" as our friendly solution.
I must admit that I thought that DRTP was still around since one does not write-off assets while a Government investigation is underway. But I do not think that is the complete reason why.
Mr. Nobrega clearly has a vision for what Borealis will do in the future and cannot afford to be seen as making a mistake. PLUS there is supposedly a P3 desire for the new crossing. By the way, I did not see mention of the the write-down of "$183 million of private equity and infrastructure assets to ensure these assets properly reflect current market conditions" in the 2003 financial year.
- "But our story is about much more than acquiring equity ownership of infrastructure assets. Creating Borealis Infrastructure as a separate investment entity of OMERS protects the plan from material risks. It also does something else that is vitally important. It enables us to create a corporate culture where we can attract investment specialists motivated by pay-for-performance incentives comparable to many private sector merchant banks...
Few pension funds or merchant banks in the world match the depth and breadth of expertise that we have assembled at Borealis Infrastructure. In the next stage of Borealis Infrastructure’s evolution, we will partner with other like-minded pension funds in the pursuit and acquisition of trophy infrastructure assets around the world.
The nature of this partnership could take several forms:
• Creation of a North American infrastructure fund, managed by Borealis Infrastructure, in which OMERS would be the lead and largest investor; this fund structure is particularly attractive to smaller pension funds without the resources to pursue and manage an in-house infrastructure program.
• Borealis Infrastructure and OMERS would also consider expanding their reach of co-investment partners to include other major capital pools around the world."
The other day, the Globe and Mail ran a story on:
- " Infrastructure: A safe road to riches
These assets are attracting investors because they offer reliable returns"
Guess what was mentioned:
- "Some examples of pensions owning infrastructure: OMERS jointly owns the Detroit River Rail Tunnel with Canadian Pacific Railway...
Assets like these offer a range of benefits to pension funds, and they can do likewise for individual investors."
Here is a clue to the future from the speech:
- "we are confident that the project will ultimately succeed in some form...We are committed to investing another $300 million of equity"
Want to know the answer is to "in some form"....forget DRTP, that's just politics. Here is what Borealis says it owns:
- "OMERS jointly owns with Canadian Pacific Railway the 8,5OO-foot Detroit River Tunnel that links Windsor and Detroit. More than $130 billion of goods flow annually through this cross-border asset."
The reason why this is so interesting is the strange articles that have been posted by "Bill Muir" on the Internet where the emphais is on CP Rail and a rail tunnel. Just watch how this plays out. I have a theory about this too which I shall write about soon. Wasn't the cost of that tunnel supposed to be around $300M? Here is one of the Muir articles that signals what is happening:
- The Importance Of The Detroit Windsor Jobs Tunnel
By Bill Muir
By region, Canadians do the most business within the Great Lakes region by nearly four times over the Midwest region.
The Automotive Industry in Canada
With the signing of the North American Free Trade Agreement (NAFTA), the automotive industry found Canada and Ontario in particular a welcome place to do business. Recently, automotive jobs in Ontario are on the increase while in Michigan they are on the decline. Last year, Ontario built more cars and trucks than any other location in North America.
Detroit/Windsor Rail Corridor Is Vital to the National Transportation Network
The Detroit River Tunnel Partnership (DRTP) owns and operates the 100-year-old rail corridor that runs from Highway 401 in Canada to I-75 in Detroit. All the land within the corridor is owned by the DRTP. The tunnel serves CPR and any other railroad operators that wish to use the tracks, making this a “neutral tunnel.” The Detroit rail crossing run by the DRTP is an ongoing business and carries over 450,000 rail cars a year. This is equivalent to over 1,000,000 truckloads.
The DRTP/CPR corridor is an existing, 100-year-old transportation corridor through Windsor and Detroit. Much of this corridor is surrounded by vacant or industrial land.
Keeping Viable Rail Service in Detroit
This tunnel is challenged by its age. Next-generation rail cars are being put into service by the railroad industry now and will continue over the next several years. These taller rail cars are bigger than the inside diameter of the existing tunnel. In 1906 when this tunnel was built, no one could have imagined a rail car 21 feet, 10 inches tall!
Below is a recent article regarding American Honda Motor Company’s purchase of $100 million worth of the new, taller rail cars. These new cars will not fit through the existing Detroit/Windsor rail tunnel.
Honda is shipping cars by new Auto-Max railcars
The Greenbrier Companies announced today it has
received the largest order ever for its Auto-Max railcar
used for transporting new automotive vehicles. The $100
million order is from American Honda Motor Co., Inc.
The extra-wide decks in Auto-Max railcars can be adjusted to adapt to changing consumer patterns. In addition to carrying passenger vehicles three high, Auto-Max is the only railcar that carries most sport utilities, cross-over vehicles, compact pickups, and minivans in a tri-level (three-high) configuration. The decks are also readily convertible to carry large SUVs and large pickup trucks in a two-high configuration due to Auto-Max's patented features.
[Posted Feb 14, 2006 at Inside Line, an Edmunds.com, Inc. blog] The Solution
As discussed previously, the next-generation, high-capacity rail cars and double-stacked seatainers will not fit through the existing tunnel. A new, larger tunnel must be built. The new, larger tunnel will be built next to the existing tunnels.
How the New DRTP Rail Tunnel Will Be Built
The new DRTP rail tunnel will have an inside diameter of nearly 27 feet to accommodate the next-generation rail cars and double-stacked seatainers. The tunnelling will be through the soft clay layer, using a pressure-balanced, tunnel boring machine (TBM) shown in the middle left.
This unique machine is huge and is used to bore through the clay layer while building the tunnel behind it. Equalized pressure is maintained at the cutting head to prevent problems with the clay layers above the machine. Once the pre-cast, concrete tunnel segments are laid in place by the machine, the entire geological structure is stabilized. The tunnel is completed when the TBM breaks through on the opposite side from where it started tunnelling.
The DRTP Jobs Tunnel will be 1.6 miles long and can be completed in less than four years after the environmental assessment (EA) is completed and government permits are granted.
The new rail tunnel will be completed in five phases:
1. Environmental Assessment Phase
2. Engineering Design Phase
3. Funding Commitment Phase
4. Tunnel Construction Phase
1. Tunnel Boring Machine Commitment
2. Tunnel Liner Commitment
5. Commissioning Phase
The New Detroit Windsor Jobs Tunnel Security
Security is an important part of CPR’s daily business. This is especially true in the Detroit/Windsor corridor.
CPR operates its own police force on both sides of the border to ensure security.
Also, all rail cars are run past a VACIS (Vehicle and Cargo Inspection System) device to Gama-Ray all rail cars before entering the United States. The government-monitored system, using trackside towers (such as the one shown at right) can detect stowaways, contraband, and explosive devices by generating an interior image of each railcar and its contents whether they be tank car, hopper car, container or boxcar, as it rolls by at 5-7 miles per hour.
Moreover, the new rail tunnel will have the most sophisticated sensor array of any tunnel on the North American border.
With all these security measures, this border crossing is safe.
It is clear that the CPR track system is a key element in delivering the products needed to keep millions of Americans working in the Midwest. And, it is also clear that this system is jeopardized by the restrictions of a 100-year-old tunnel in Detroit that is not adequate for the next-generation rail cars coming on line.
The Detroit River Tunnel Partnership (DRTP) owns and operates the 100-year-old rail corridor that runs from Highway 401 in Canada to I-75 in Detroit.
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