Prime Minister Stephen Harperand British Columbia Premier Gordon Campbell on a rapid transit rail car before announcing funding for the Evergreen Line rapid transit system in Burnaby, B.C., on Thursday February 26, 2009.Darryl Dyck/The Canadian Press
When the call went out earlier this week for potential bidders on the rapid transit Evergreen Line to come forward with their qualifications, it looked like nothing more than a minor and routine step.
But that provincial government RFQ, (request for qualifications) as it's called, actually sends two important signals.
The first: The provincial government is confident that it's going to be able to work out an amicable deal with TransLink on how to find its one-third of the money for the $1.3-billion line. That means commuters from Port Moody and Port Coquitlam can look forward to seeing their commuter line arrive by the end of 2014, after almost a decade of seesawing.
The second signal: Public-private partnerships are back on track again, after spectacularly foundering 18 months ago as credit evaporated during the worldwide recession. That's when the B.C. government was forced to shoulder the debt for the $3-billion Port Mann bridge twinning project when private bidders said they couldn't get financing.
"The markets were at their worst around the time of the Port Mann bridge project," acknowledged Larry Blain, CEO of Partnerships BC, the Liberal government agency created to negotiate public-private partnerships for major projects. "But I would say things are as good now as they were before the crisis."
The Evergreen Line request is asking bidders to come up with $400-million in construction financing. It is among the first wave of projects in which the province is testing private bidders' willingness and ability to find their own financing.
The RCMP E Division building in Surrey, finalized in May, was the first project where bidders came in with loans. The Evergreen line, South Fraser perimeter road, Surrey Memorial Hospital, and Surrey pretrial centre are all being pitched by the province as design-build-finance bids.
"It took a bit of time" but the financing world and capital markets are back on track now, Mr. Blain said. He noted that new institutions are coming forward to provide the kind of 30-year financing that government projects typically require. Previously, private companies got their money from European or Australian banks. Canadian banks were reluctant to lend long-term, he said.
Now, Mr. Blain said, other lenders, especially pension funds and insurance companies, are looking at lending on government projects because they are seen as stable investments that provide long-term returns.
"They are now big buyers of infrastructure bonds," he said.
Mr. Blain also said the province is moving ahead with the bidding process for the Evergreen Line, even though TransLink's part of the deal isn't worked out yet, because it's confident that the province and TransLink will find a solution.
"For us to start an RFQ, we have to have 100-per-cent confidence that project will be funded. We do have that confidence," he said.
The federal and provincial governments had each committed about $400-million to the line two years ago, but TransLink has consistently said it couldn't come up with its $400-million for the 11-kilometre line unless it got new funding sources like road pricing. Local mayors rejected the province's suggestions that it should increase property taxes to pay for its share of the line.
The province and TransLink had appeared deadlocked last summer. At the time, TransLink was under the leadership of CEO Tom Prendergast and Surrey Mayor Dianne Watts, then the mayors' council head.
Transportation Minister Shirley Bond, in what became an ongoing media debate throughout the summer and fall, said Metro Vancouver was already getting a lot of money from the province and taxpayers elsewhere shouldn't have to pay for their expensive transit systems.
Both Mr. Prendergast and Ms. Watts quit their positions in the months after Ms. Bond ordered a review of TransLink by the Comptroller-General last summer. Since then, Langley City Mayor Peter Fassbender, the new mayors' council head, and the minister have been conducting quieter conversations that the mayor insists are more positive and more likely to lead to long-term solutions.
"We have good traction with the government in working together, not only for the Evergreen Line but also for other needed projects," he said.
The RFQ is a good omen, he said. "I think it is a sign that the province is optimistic we're going to find a solution."
Mr. Blain and the Evergreen Line's project director, Dave Duncan, said the province didn't ask for the same kind of public-private arrangement as the Canada Line, where the builder is also maintaining and operating the system for 30 years, because the Evergreen isn't a separate line the way the Canada Line is.
"The Evergreen Line is part of the existing SkyTrain system, 50 kilometres that is operated by TransLink. It's not practical to separate out the operations for that 11 kilometres."
Special to The Globe and Mail