Thoughts and Opinions On Today's Important Issues

Thursday, February 21, 2008

DRIC: Bankrupting The Border

From the same group who were wrong on traffic border numbers increasing dramatically as justification for new border capacity ie a new DRIC bridge, come new figures. They seem so outrageously optimistic that one has to ask the question why they are presented.

The answer is obvious. Just in time for spring break as promised:


High border traffic numbers especially for trucks and huge traffic volumes going to a new DRIC bridge taken from the other existing border crossings are the only way that any private firm would even consider a P3 investment in the proposed DRIC bridge without huge government guarantees of revenue and investment payback. If the high traffic numbers are not there since there is little traffic growth then cannibalize the existing crossings.

Yes, dear reader, it is the latest edition in the series of "Gone Wild" projects that have cost taxpayers billions of dollars world-wide. Not to be outdone, our region will now boast that we have one of the premier INTERNATIONAL boondoggles that cross boundary lines of two countries.

The multi-billion cost will not only result in it going bankrupt or will cost taxpayers multi-millions in subsidies annually but will also bring down every other border crossing in the area causing huge financial problems for the economies of Canada and the United States.

How those numbers will be achieved will be the subject of another BLOG soon that will show why it is dangerous for bureaucrats who have never worked in the real world to be allowed to make business decisions.

What happens if those numbers are wrong after a billion dollar plus investment by say a pension fund like OMERS. Who gets sued?

For those of you who thought that I didn't know I was talking about, and there might be a few people around, when I said that a new DRIC bridge would bankrupt the other border crossings, I was absolutely correct.

I want you to take a look at the following comments and table from the latest US DRIC report. Bear in mind that the DRIC numbers with respect to traffic volume bear no relationship to reality and in fact the volumes for the various crossings will be significantly less than the optimistic numbers of DRIC.

I will say nothing more about what DRIC has done and will let you look at these inserts for yourself. All I know is that there is no way that anyone in their right mind would allow a new bridge to be built with traffic volumes so low. The net result would be that the governments of the two countries will have to subsidize all the crossings or trade between the two countries will absolutely die as the crossings go broke.

If this is what the exercise was supposed to achieve in the end, then they are absolutely successful. If the purpose was to bankrupt the Ambassador Bridge, then let the lawsuits begin.

Two side issues. First, the Tunnel deal between Eddie and Kwame now has to be dead officially. Who will invest, other than a Government with an ulterior motive, in a Tunnel that is already in a mess financially with the expectation that a new DRIC bridge can take away 26% of its business.

Second, was Transport Canada telling stories to the Senate to get Bill C-3 passed:

  • "Ms. Evelyn Marcoux, Transport Canada Director General, Surface Infrastructure Programs: The intent of this bill is not to put anyone out of business, regardless of who owns the bridge. The intent of this bill is to ensure that the government fulfills its constitutional obligation and that it has the tools to do so.

    The Ambassador Bridge is very important to the economy of our country, and it is important for trade between the United States and Canada. No one has any intention to hurt the Ambassador Bridge.

    That being said, this bill is greater than the Ambassador Bridge. It will provide the government oversight capabilities of all crossings. It is not the intent of the government to penalize. If we were to penalize or drive the business away from the Ambassador Bridge today, we would create problems with respect to other bridges. Why would we want to do that?"

Nope, taking away most of their business so the new DRIC bridge carries 80% of the total truck business and 60% of the total traffic is of no consequence. You better sell out now Mr. Moroun, and quickly! You seem to have little choice now. The plan to scare you has to be making you shiver.