Thoughts and Opinions On Today's Important Issues

Friday, April 24, 2009

DRTP Paid Its Dues---But For What

I don’t like the feeling of being played or manipulated. However, that is what I think is happening in the border file. I have no idea what the truth is any more, if I ever did, nor what is really behind all of these goings-on.

What makes it worse is that those who are the so-called master puppeteers are the three levels of Government in Canada. They pull the strings and we react accordingly.

Is that how far our system of Government has deteriorated? Is there something so secret that the truth has to be hidden from us and that we as citizens have to be played like a musical instrument by politicians and bureaucrats!

I remember a couple of people who were deeply involved in STOPDRTP being so concerned about what could happen to their future that one person actually sold their family home and moved out of the area and another was seriously considering doing so to protect his investment in his family home.

I do not know how the people who live along the DRIC road corridor could take all of the ups and downs that they have lived through for so many years. This is finally going to end in their homes being expropriated. Now the concern is at what price and will it be fair without hiring a litigation lawyer? How can they bear the emotional turmoil for so long!

How would you like to be living in Schwartz’s area of mass destruction by pollutants or hearing the Mayor talk of cancer, brain tumours, asthma and disease for children who may have to wear breathing packs. Tell me which rich Toronto Senior is going to move here to die of a pollution-related illness when there are purer areas to live?

I have speculated that the Governments have joined together to scare the Bridge Company Owner into selling. I have said that DRIC was one of the tools that they used. Why would they do that you might think?

It’s simple: MONEY!

Let us assume for the sake of argument that the Bridge is worth a billion dollars. We know that DRIC has cost Governments on both sides of the river about $60M so far. True, that is a lot of money, but…

What if I was right and he was so afraid that he could lose the value of the bridge if the DRIC Bridge was built so that he decided to sell out at a distress price just to be able to sell while the selling was good. He only really had one possible Purchaser, the Governments, because everyone else would have been scared off. Let us say that he sold out at $500M.

In such a case, the bureaucrats would look like geniuses---a $60M investment got them a $500M return, being the reduction in the purchase price!

Of course that tactic did not work and the Governments discovered that after the 2½ page spread in the Globe and Mail.

But let us step back to an earlier time, before DRIC. I keep asking myself whether this manipulation started much earlier. I will let you form your own opinion, dear reader, after you consider the following.

May I suggest you go back first to a BLOG I wrote just over 3 years ago. I expect that you will be as furious now as I was when I wrote it [February 22, 2006 “A Waste Of Three Years]

I could not believe what I read at that time. Effectively, a DRTP-type solution had been considered and rejected by MDOT in 1991, a decade before the latest battle, and in the strongest of terms. Yet, it was being considered seriously, I thought and so did STOPDRTP, by the Governments in 2002 and later until it was rejected! I had heard stories in fact that the Federal Government was going to buy the CP Rail lands along the rail corridor when the JMC report first came out in 2003.

If it was that serious a project, then where has DRTP been as the DRIC EA carried on? Oh sure, we had the big ad blitzes and billboard campaigns. But if they were really serious, are they going to file a lawsuit to knock out the EA because they were kicked out unfairly? Hundreds of millions of CP Rail and OMERS dollars were invested and yet have they gone off into the night so quietly? Why would they do so? It makes no sense whatsoever.

I asked 3 years ago in that BLOG
  • “Is this all part of the stall so that the border will never get fixed and Sarnia/Port Huron becomes the crossing of choice to our region's detriment?”

That still could be the reason. However, it was one of the factors that got me thinking early on as well about united Government action to force the Bridge Company to sell out. It took me some time, but then I started wondering about DRTP and what part it played in this extravaganza. As I heard more about DRTP recently replaying its strategy by working in a stealth mode primarily to gain support for its doublestack rail tunnel, I wondered if DRTP was coming back again and why.

That is when I started wondering seriously if DRTP was the Governments’ tool at first to try to force the Bridge Co. Owner to sell out. Come to think of it, I also wondered if DRTP knew what its function was or was it being used too? Did Nibrega figure it all out and was he now going to use that card against the Government?

DRTP did an effective job by getting almost everyone onside, everyone except STOPDRTP. Garry Fortune, who used to be the Riding Presdient for Herb Gray, was the name that I knew best as the DRTP spokesperson. I thought he did his job well considering all of the big names that he got onside that our citizens' group had to fight. Still, when it failed, then along came DRIC.

I started to wonder if all of us along the corridor were also being played. The Governments had to know early on that DRTP was going to be rejected based on the MDOT study but never said a thing about it for months. I do not recall any Government on either side of the river mentioning that report to date. What other reports are buried?

Were citizens being played as puppets? Were our strings being pulled? Were our concern and distress nothing more than a pressure-tactic to convince the Moroun family that they had no chance? Were our worries that there would be trucks taking 50% of the border business going on the truck expressway designed to be a message to the Bridge Company that their business was in trouble and they ought to sell out?

When you think of it, the more STOPDRTP fought, the more DRTP should have been taken seriously as a Bridge Co. competitor. I have to congratulate Matty Moroun for having the nerve not to capitulate at a time when it seemed that DRTP was going to take half of his business. Who knows, perhaps he always had the MDOT report too and knew what was being done to him!

I needed some proof to try to substantiate my position. I thought I got it after reading OMERS’s Michael Nobrega’s speech the other day but I still cannot be 100% certain. Here is what he said with a few comments added in by me in FISKing mode:

  • “OMERS must be one of the super-funds. OMERS has to date done the heavy lifting among pension plans in the area of infrastructure investing in the Province of Ontario. [Who says that infrastructure is a good investment. Given the drop in Macquarie fund valuations and the problems with the Macquarie model, should any pension plan be invested in illiquid, long-term assets that can decrease quickly in value.]

    We were first to invest in green technology. We have led the renaissance in the nuclear industry in this province that will benefit other parts of the Canada. [Except that the Ontario Auditor General slammed how the Government Minister handled the project. Just ask Dwight Duncan. He was Minister of Energy.]

    We have invested in the “bricks and mortar” of our healthcare infrastructure. [Check the Ontario Auditor General Report on the hospital deal near Toronto and see what a disaster this P3 deal was although OMERS was not involved]

    We are currently invested at the Windsor / Detroit border crossing where one of the largest infrastructure programs must take place in order to protect hundreds of thousands of jobs. [CP Rail just sold out most of their 50% interest]

    OMERS has paid its dues and will continue to invest in the Province of Ontario and the rest of Canada."

I did not see a mention of CP Rail selling in his speech. If DRTP is such a good investment in Windsor for a doublestack rail tunnel, why then did the sale take place?

I found it odd that he mentioned the Windsor project so specifically when before it was omitted:

  • “Borealis Infrastructure, a 10-year-old pioneer that has developed with other investors a portfolio of infrastructure assets with an enterprise value of over $25 billion, including a nuclear power plant, marine ports, a satellite company, oil and gas pipelines and health-care diagnostic services.”

Maybe I am reading too much into this but the way I read what he is saying is since we have “paid our dues” and since we “are currently invested at Windsor / Detroit” we, OMERS, ought to get the project “to protect hundreds of thousands of jobs” in Ontario where the economy is tanking. If it is really going to be built!

“Paid our dues.” What a strange phrase to use. Was this speech really designed for other P3 investors telling them to stay away from this project unless they were prepared to be part of the OMERS’s consortium. Was Nobrega saying it was in the bag for OMERS?

It is more than that though. Surely CP Rail knows more about the rail business than OMERS. The doublestack rail tunnel makes no sense now.

Surely the smart guys at OMERS knew about the 1991 MDOT Report

  • “There was nothing brilliant in this analysis. Our people were simply doing their day-to-day jobs … driven by the covenant we have with plan members to invest prudently.

    That meant investing in what we understand and can explain”

Why would OMERS have invested in a DRTP disaster? I don't think they did. Was DRTP just a placeholder for the future? Nobrega’s speech was very specific and for a reason in my opinion. He reminded the former Minister of Energy and now the Minister of Finance that OMERS is owed one for something that it did.

The questions remain. Is OMERS going to get the DRIC project financing or have they figured out that it is not going to move forward now? Was the speech nothing more than saying that OMERS needs its pay-back too for trying perhaps to help squeeze out Moroun. Is it as simple as Nobrega wanting OMERS to be a Super-fund and Dwight, the Windsor MPP and Cabinet Minister, better deliver!

You dear reader decide if what I Blogged makes sense or not. We all ought to be tired of these silly games already! No wonder we need CIBPA and Citizens for Jobs Now!

PS. I read this in yesterday's Globe and Mail so perhaps I am not that far off the mark. Michael should be happy. Who knows, he might get pension fund money as a Super-fund AND the DRIC financing too:

  • "Darcy McNeill, spokesman for Ontario Finance Minister Dwight Duncan, said the province has talked with the universities about merging pension plans, but that there is no move to compel them to act. "We are encouraging them," Mr. McNeill said yesterday. "We believe there are advantages to scale, so we would point that out..."

    The provinces might also dangle a carrot before Ontario universities to win their support for a merger, sources say. The schools want relief from a regulation that requires pension plans to hold enough assets to cover their obligations if they go out of business. Universities argue they should be exempt from the rule, and the government could link a merger of assets to that reform.

    Max Blouw, president of Wilfrid Laurier University in Waterloo, said he has heard that the province might link such relief to a pension merger, but that no explicit pressure is being put on universities to join the program.

    He said it might be difficult for universities to agree to common pension-fund management, but he would be more interested if he knew there would be a significant cost savings in the fees paid to manage the assets."

Of course, Gord gave us a big hint too about the financing that I will discuss in another future BLOG. I wonder if he got the information from his provincial government insider who knows so much about the border file and rides to the airport.