Thoughts and Opinions On Today's Important Issues

Wednesday, April 15, 2009

The Newest MDOT DRIC Bridge Justification

Honestly, it gets funnier and funnier as time goes on. Logic seems to have escaped the bureaucrats in the border file. It reminds me of Canada's old National Energy Program for the oil industry that was supposed to protect it from foreign companies. Rather it achieved the opposite, resulting in the sale of many Canadian companies, Dome Petroleum being the biggest name to fall.

Please be kind to Sean O’Dell if you do happen to run into him. Do not please comment on the fact that he seems a lot shorter now than he did before. I would think that he is very sensitive about this fact since he has been cut down to size.

Sean is Executive Director, Windsor Gateway Project, for Transport Canada. He is the gentleman who made the ridiculous remark in the Detroit media:
  • "Moroun will lose some traffic, but there's more than enough business to go around."

How he could say that is beyond me since the DRIC investment-grade traffic survey has been delayed for about a year. I do know however that there have been some interim reports prepared, at least two of them, and I am waiting to receive them both under my Freedom of Information Application.

There is no doubt however that traffic numbers have decreased considerably and I expect that the reports will finally confirm that fact. It is no wonder that they have not been released to the public yet. I expect as well that the authors will be hard pressed to say when the traffic numbers will increase given the misery that is going on with the automobile industry, the big users of the Ambassador Bridge.

If the Federal Minister of Finance and the Prime Minister have been relying upon DRIC and Transport Canada figures for their P3 extravaganza, will they ever be embarrassed. I wonder if they know yet about the Port Mann Bridge in British Colombia? Or has that been kept secret from them?

Poor Sean. Part of the reason for his decrease in height is that he has been cut off at the knees by MDOT. MDOT is a big booster of the DRIC project notwithstanding what the Michigan Senators may think.

I am pleased to say that MDOT has been hard at work trying to justify spending even now hundreds of millions of dollars on a new bridge and plaza on the US side that may result in the dislocation of hundreds of homes and businesses in Delray.

The need for a new bridge originally was because of capacity issues. You remember, traffic was growing so quickly and was expected to double such that we needed a new bridge. When that argument failed, we then heard about the security interest as the justification. A variation of that became redundancy being the requirement to construct the new crossing.

Let us forget about security being brought back again recently and say that the MDOT and the FHWA people started getting a little bit desperate. We heard about the need for redundancy of roads on the US side and then the most bizarre argument of all, the need for a duplicate plaza, even though the State and the Bridge Co. were spending a quarter of $1 billion a mile down the road at the Ambassador Gateway project, the largest project ever undertaken in Michigan.

Over the last few months, MDOT has started getting very nervous when they were pinned down. They tried to forget at first that the Gateway project was designed to accommodate a second bridge. They had difficulty remembering that they had said that their relationship with the Bridge Company was the first public/private partnership in Michigan, a true partnership and not just a financial partnership. They did finally remember to say that they were not opposed to the Bridge Company and their project but they still need a bit of pushing to get them to fulfill their obligation to help the Bridge Company get their bridge built.

So if you are one of the strategists at MDOT what do you say now to protect the Department’s neck? You know that traffic is down, you are stuck supporting the Bridge Co. project but what you really want to do is make sure that the DRIC bridge is built.

It is genius, sheer genius even though Sean O’Dell becomes the victim. Here is what Michigan Transportation Department spokesman Bill Shreck said

  • “the state needs both new bridges to compete with other border crossings that have many more bridges and lanes. "We need to be competitive and to be ready when the economy rebounds," Shreck said.”

In other words, effectively what he confirms is that traffic has decreased! Oh, when that traffic picks up, then we have to be ready with two bridges, the DRIC bridge and the Enhancement Project bridge.

The trouble is, the brains at MDOT have no idea what they are talking about. Consider this:

  •  The gentleman who operates the Peace Bridge has also said that the issue is not capacity but managing the flow of traffic. Yet MDOT wants to spend more taxpayer money on more lanes when a private operator is prepared to spend its cash
  •  MDOT wants more bridges in order to compete with someone. Presumably, that someone is not the Blue Water Bridge which is an MDOT asset but rather the crossings in the Niagara region. The problem is that MDOT has already stated that those crossings are not competition to the Crossings in this region. So who is the competitor, the truck ferry?
  •  I wish someone at MDOT could tell us when the economy in this region will get better. Presumably, our brains must have some inside information about what is going to happen to the automobile industry here since the Big Three are the main users of our crossings. Maybe I ought to go out and buy some auto company shares if they are going to be booming soon.
  •  Let us assume that magically both bridges can be built but that the traffic is still down and we do not know when it will pick up. Let us also assume that both bridges split the traffic equally. My guess is that this will result in the bankruptcy or at least the financial difficulty of all the crossings in the region because they will all have to fight over the traffic. That will now require massive government subsidization.
  •  I wonder which P3 investor our geniuses will con to finance the project considering that P3s are in serious difficulty these days. The Australians are having considerable problems with their Infrastructure funds decreasing value significantly.

I have talked about it before but let me raise it once again because it will show you how stupid all of this really is. In fact, what is being proposed is anti-user of the crossings. It will result in both commercial traffic and passenger traffic dropping considerably. In fact, it may decimate this side of the river which could well be what our friends in the United States are hoping for. Remember Canadian Senator Kenney’s “Dirty Little Secret.”

I am going to tell you the naked truth. Just bare with me, oooops, I mean bear with me. Follow through this logic that is dependent on Canada’s new International Bridges and Tunnels Act (IBTA):

  •  We must assume that there will be fair competition between crossings with no Governmental favouritism of the DRIC bridge
  •  Let us also agree with what the Bridge Company said that the tolls on the DRIC Bridge will be substantially higher than theirs, three to four times higher
  •  If that is the case, then very few will ever use the DRIC bridge
  •  In order to be competitive, the DRIC bridge will have to drop their tolls to that of the competition. That probably means that the P3 investor will go broke
  •  The Governments cannot allow that to happen so they must have a plan to deal with that situation. They do: IBTA
  •  What will probably be happening in reality is that all of the traffic will be going to the Enhancement Bridge. Oh dear, oh dear…traffic flow may not be as good as it ought to be. What can be done, what can be done?
  •  IBTA SEC 15.1 If the Minister is of the opinion that a change in the tolls, fees or other charges for the use of an international bridge or tunnel is resulting in adverse effects on the flow of traffic, the Minister may, with the approval of the Governor in Council, order the owner or operator of the bridge or tunnel to impose the tolls, fees or other charges that, in the opinion of the Minister, would not result in adverse effects on the flow of traffic.
  •  In other words, the Canadian Government will force the Bridge Company to increase its tolls to the levels of the DRIC bridge so that the DRIC bridge can get some traffic! That means users pay more. A complete absurdity that puts our region in a horrible competitive position with respect to border crossings.

Do you see what I mean? The end result is the complete opposite of what the Governments expected, just like with the oil industry! This desire to force the Bridge Company to sell out no matter what the cost may result in a huge economic disadvantage to this region.

However, the hilarious part about all of this is who ultimately will be the winner of the bridge crossing wars. Do you think that it will be a bridge conceived, built and financed by bureaucrats who have never run a border crossing and who are using taxpayer money? Or, do you think it will be the bridge owned by a private enterprise operator who uses his own money and who has made his crossing #1 in North America?

Here is what Today’s Trucking once said:

  • “Even in the event that the new bridge would be contracted to another party, how would it compete with the Ambassador? Any new bridge would be heavily reliant on toll revenue just to keep above water for the next 30 years. If the Ambassador slashed rates (and Moroun could run for years at a loss), it would deter volume from spilling over to the new crossing and keep a large chunk of truck traffic right where it is. Then, with the new bridge desperate for revenue to pay off debt, can you guess who comes to the rescue?"