Thoughts and Opinions On Today's Important Issues

Thursday, April 01, 2010

What Is It With DRIC Supporters

I just don't get it at all.

Don't they ever listen to what they say? Do they think that everyone accepts blindly the positions they put forward? Can they ever admit the fallacy in what they are stating?

I heard that a major Canadian transportation organization recently has hired a big lobbyist firm in Michigan to lobby FOR the DRIC bridge in Lansing. Wow, the DRIC people must be desperate to have to call on third party assistance. And a Canadian one too!

That seems strange to me. What does the group have to gain by doing so? I wonder how much that will cost their Canadian members in lobbyist fees.

A warning to the lobbyists---do your homework. You do NOT want to look like fools in front of Michigan Legislators whom you are also trying to influence for other clients if you try to feed them all of this nonsense that DRIC supporters would like you to promote.

It does bug me to be honest. I suspect that there may a reader or two of mine who might disagree a bit on what I have to say on the border file. No problem.

However, I try very hard to substantiate what I say and provide the proof of it in my BLOGs so that my readers can understand why I say what I do and then draw their own conclusion.

Let me give you the latest example of DRIC supporters saying things that drive me crazy. It is from a recent interview on the Business News Network. Naturally, I will fisk their comments to try and put their remarks in a perspective.


Andrea: $5 billion. that's the estimated price tag on the Detroit River International Crossing project, which is expected to help unclog the congested crossing between Detroit and Windsor. But what will it mean for businesses on either side of the border? For their perspective we're joined by Jay Switzer -- sorry, Doug Switzer, VP of Government Relations for the Canadian Trucking Alliance. Thank you very much for joining us today.

[Just watch how that $5B is ignored by the DRIC supporters, especially when that amount grows substantially higher. Too bad that the host did not mention whose side the guests are really on and not leave the impression that they are neutral.]

Doug: thanks for having me.

Andrea: Ok, so Dan Stamper, our previous guest, who operates the Ambassador Bridge, he made an interesting argument, which was essentially that, look, it's cheaper what we're doing. Why do businesses want to pay four times the amount of tolls than they would be paying if we go with our idea? Why do we want to promote a government-funded potential boondoggle here?

[I have never understood why the financing of the border crossing is such a mystery. Why hasn't MDOT released the Wilbur Smith Report on financing the DRIC bridge? Why is it such a secret? I would have thought that the math on financing the two bridges should be easy to compare and the cost of building a traditionally funded bridge compared with a P3 bridge ought also to be easy to calculate. Maybe that is the problem. Disclosing the numbers now would be fatal to DRIC!]

Doug: Right. I think really the issue is where they're paying the tolls to. I don’t think the tolls will be four times what they are on the Ambassador Bridge. I would expect the tolls would be commensurate with what they're already paying.

[Frankly this comment is absurd. How can the tolls be approximately the same when the cost of the DRIC Bridge is in the $2 billion range while that of the Ambassador Bridge is around $3-$400 million? What no one wants to recognize is that the Ambassador Bridge can seriously undercut the tolls of the other bridge, thereby attracting traffic away from the new Bridge. The end result could be the bankruptcy of the DRIC bridge.

Of course, the Bridge Company will be extremely competitive. That is why it is highly unlikely that any P3 organization will seriously put in a bid knowing that they have to compete with someone whose price will be a quarter of theirs. P3 companies like monopolies so that they can make their 13 to 20% rate of return.]

So for the trucking companies and the shippers who are using the border crossing there won't be any additional cost. It's just a question of whether they'll be paying it to the Ambassador Bridge or whether they'll be paying it to a new Bridge Authority.

[Again, a ridiculous comment and wishful thinking. But then again, he works for the Association whose head moaned and groaned about the increase in tolls at the Blue Water Bridge. Perhaps they feel that if they are nice to the Governments, the tolls will be kept low again for the benefit of their members and at the expense of taxpayers.]

Andrea: I want to bring in a second guest. We also have Sarah Hubbard. She is Senior Vice-president of government relations with the Detroit Regional Chamber. Sarah, I want to pose the same question that I just posed to Doug here, which is that the operators of the Ambassador Bridge are saying, look, why would you want to go with the government-backed Bridge? Because basically it costs $5 billion, and the tolls are going to be much higher than what we're charging.

Sarah: Well, we think options are important here.

[What is even more important to Sarah, is not answering the question because if she did, that would be the end of the DRIC Bridge.]

We need redundancy for national security issues.

[Can we bury this argument already!

To be blunt, the attack in Moscow on the subway system confirmed again that terrorists multi-target. If they are going to attack the Ambassador Bridge, they would attack the other new Bridge whether it was beside the old one or a mile down the road or even 60 miles away. More importantly, Sarah forgets to mention that the Tunnel is the main concern because it has been described as a "unique security risk." It should be obvious why that is so.]

We need to make sure that we have very strong, clear entry and exit areas for the Bridge.

[Poor Sarah, clearly she forgot about the Ambassador Gateway project in which the Governments and the Bridge Company have spent already about a quarter of $1 billion to do precisely what she described on the US side. On the Canadian side, although promises have been made, nothing has been done including spending $300 million on the building of a road to the Ambassador Bridge as was contemplated under the BIF program. If Highway 401 is to be extended, it will be extended in precisely the same route to either of the new bridges.]

And we think this is something that community on both sides can live with as well, we like the idea of having several options. In Buffalo they have four Bridges and that seems to work out pretty well there. We have lots of room for growth in the Detroit-Windsor area. We want to really grow the logistics industry and have more trucking and more transportation going on in the Detroit-Windsor area.

[Oh Sarah, she obviously does not know about the problems in Buffalo/Fort Erie where the project to build the new Peace Bridge is in a worse situation than ours, even with all of their bridges. If Sarah is trying to suggest that Buffalo is our competitor, MDOT have already destroyed that myth a long time ago]

Andrea: Ok, there was recently, though, an Editorial in the ""Detroit Free Press"" where basically they were making the argument that Michigan can't afford this bridge, that really any money that they're going to have for the transportation system, they should be using it to fix cracked roads and potholes versus putting money up for this expensive bridge. What are your thoughts, Sarah?

Sarah: Well, that's just not true.

[Really? I remember reading a story recently about many road and bridge projects that cannot be completed because the State does not have the money. I remember reading a story about the dispute between Moroun and MDOT over Bridge Company toll credits that could help pay for some of these projects. Why even the Governor in her SOS speech thought it was ludicrous not to take advantage of private toll credits.]

Either party who builds a new Bridge is going to use bonding, whether it's bonded through a private activity bond or bonded through a public/private partnership or through some kind of government situation. Bonding will carry the primary cost of the Bridge. After that, the federal government will be picking up significant costs of entry and exitways on both ends. You know, there are different kinds of bonds that are used for patching potholes in other areas of the state.

[Oh Sarah, you probably have not heard that alternative payment methods may have to be considered because of the lack of traffic. That means a taxpayer subsidy for the DRIC Bridge. She really has to keep up with the news.

There will only be bonding if the person doing the bonding knows that the bonds will be paid back. That is not a certainty with the DRIC bridge as outlined above.

Does it really make sense for the State of Michigan and its taxpayers to spend money that they could use for their many road projects it cannot complete now when the Bridge Company is prepared to spend their money to build their Enhancement Project?

After NAFTA-gate, Secretary of State Clinton's dismissive comments respecting the border with Canada the other day and the unpleasantness over Afghanistan and the Arctic, Sarah has to be dreaming in Technicolor if she believes that the US Government will contribute one cent to this project to help out Canada.

Note as well, that Sarah effectively answered the question buying never mentioning once how much Michigan would be able to pay.]

Andrea: Ok. Doug, to you. I want to ask you, I mean what's it like right now? Mr. Stamper said that the Ambassador Bridge is very efficient. What kind of -- are there wait times and how difficult is it to get across at the moment?

Doug: At the moment, there aren't extensive wait times particularly directly at the Bridge.

[Oh my goodness, someone finally acknowledging that the Bridge Company knows how to run a border crossing.]

But we still have the dysfunctional situation as you said in your lead-in to this, of having to travel down a city street, going through 16 stop lights to get to the busiest border crossing between Canada and the United States. At its peak, it was running 3.5 million trucks a year plus, essentially running through the Detroit Windsor community.

[Our traffic volume today is around the 1999 level, a far distance from the peak described. No one seems to want to acknowledge that the road to the Bridge has been there ever since the Bridge was first built almost 80 years ago. Even with the stop lights, the border operation at the Ambassador Bridge beats that of every other crossing between Canada and the United States according to FHWA.]

Our position on this has been that we had two public policy objectives. One was to get a freeway-to-freeway connection that would get us off the city streets and get us out of the Windsor community.

[This is a bogus issue. The Bridge Company years ago engineered a road to the Bridge following the route proposed by the City of Windsor WALTS study that was effectively copied by the DRIC engineers. Whether a truck goes to the new DRIC bridge or the Enhancement Project bridge, the route is identical except for the last mile where a truck would either go left or would go right depending on the final destination.]

And the second was to build in some redundancy.

[See above re the phony argument respecting redundancy and security. If the Governments were serious, then we would have had reverse customs at the border already as the Bridge Company has been advocating for years.]

The DRIC project is the result of the efforts of Governments on both sides of the border, Canada and the United States, to look at all the options including the option of twinning the Ambassador Bridge and they determined that, after spending several million dollars and a couple years studying this, that the most reasonable way was to build this new Bridge that DRIC is proposing.

[Another misstatement. The Governments have not looked at twinning the Ambassador Bridge but rather looked at what they proposed about building a Government bridge right beside the Ambassador Bridge. That is how they threw out the twinning concept by saying that it would destroy most of Sandwich. Of course that argument was a phony one as well.

As I have Blogged many times before, and which was confirmed by Prime Minister Harper's secret mandate letter to buy the Ambassador Bridge, the DRIC project was nothing more than the Governments' attempt to terrorize the Bridge Company into selling their Bridge to the Governments at a very low price. That strategy has failed miserably.

Why would the Government of Canada want to buy the Ambassador Bridge if it was in such a poor location and such a poor project and an old Bridge. The letter demonstrates that Canada was never interested in a DRIC bridge but always wanted to buy the Ambassador Bridge and to locate a new Bridge beside it.]

Andrea: Ok. Because one of the things that kind of jumped out at me is why isn't the Government -- or the two Governments working in coordination with the Ambassador to maybe twin together with Mr. Moroun that second span? Why isn't that happening, Doug?

Doug: It was one of the options that DRIC looked at.

[See above. They never looked at it. Moreover, the Governments started reading and believing their own demonization reports. They were terrified to negotiate with Moroun, especially because they have no negotiating position as the lawsuits started by him make absolutely clear.]

We have to remember what DRIC really is.

[See above what DRIC really is]

DRIC is a combined environmental assessment process really, in that essence, between the Federal Canadian, Provincial Ontario, State of Michigan and the Federal US. Though they've combined, all four levels of Government have various processes that need to be gone through. And DRIC was the process to meet all of those requirements. So they looked at all the options, and one of the options was twinning. But for a variety of reasons, they can't really build that road to the Ambassador Bridge. The environmental assessment impact showed that it was more of an environmental impact to try to build that freeway-to-freeway connection to the foot of the Ambassador Bridge. Part of the problem is the Bridge is in the middle of the Windsor Community and it's hard to get to it with a highway.

[Discussed above. I do believe that some people should visit Windsor to understand that the Bridge is not in the middle of the city. I've heard that now from several people over the years who really ought to know better. Perhaps they are confusing the Bridge with the Tunnel.]

Andrea: Ok, Sarah, how important would you say -- I mean this has been going on for quite some time now. How important is it that there is some resolution? I've spoken to some people who are watching this, and they're really fearful that if there isn't a resolution, you know we may not see a Bridge in our lifetime, a new one.

Sarah: Absolutely. You don't just decide to build a Bridge overnight. This is something that takes years of planning as Doug mentioned.

[Sarah forgot that the Ambassador Bridge program started long before DRIC and but for Government interference would have been completed by now]

It's a binational process. Both sides of the river have been working together and it's extremely important that we build a new Bridge. This is -- you can't just decide overnight, oh, we need a new Bridge between two large countries. We think it's important to keep moving forward. We want to find resolution to the DRIC process, and if the Ambassador Bridge is able to build their second span, by all means they can build a second span. In fact in the minds of the business community, we like the option of having additional crossings in several places. We want to have choices. We want to have competition and we want to make sure we have the best crossings possible between the US. and Canada so we can be an inland port.

[For a business group, it is fascinating for me to watch them seeing a company being destroyed by Government and yet they are silent about it. Perhaps that is because the Chamber is a DRIC supporter.

Moreover, as a business person, Sarah does not seem to understand basic economics. Who will pay for all of these bridges if traffic is not there to pay for the bonding, her members as taxpayers?]

Andrea: Sarah, what's your sense though -- I mean the Michigan Legislature has to make a decision about whether they're going to continue to fund the DRIC, the Detroit River Crossing. Do you get a sense of which way they're going on this?

[She should have asked Sarah specifically about Senator Cropsey]

Sarah: Oh, there are a few issues being worked out before the Michigan Legislature.

[Yes, like an MDOT traffic report that does not meet legislative requirements and the failure to release the financial picture until the last minute! And how to get P3 operators to come in without a Government guarantee or subsidy.]

In particular we need to find -- to pass a new law that would allow for a public/private partnership in Michigan. You already have that in Ontario and in Canada. and in the US. We need to do that. We strongly believe that it will pass in time for this project to be completed. There are a few vocal opponents of this project in the Michigan Legislature. There are many more silent supporters.

[Perhaps the silent majority understand that the P3 boondoggle is over, that P3s are too expensive. Perhaps they have read my BLOGs on the Port Mann Bridge P3 fiasco!]

Andrea: Ok. and Doug, the last to you. What would this DRIC Bridge mean in terms of the economy and jobs on both sides?

Doug: Obviously there's a direct impact in terms of the trucks trying to get across the border and the operational costs that they incur trying to move across the border.

[But Doug, you just said there are no border problems now and with the new technological advances, pre-clearance and moving Customs away from the border, the problems will be minimal in the future.]

But I think really the most profound impact on the economy is, you know we talk about the supply chain, and the chain is only as strong as its weakest link. All too often, the border is that weakest link.

[Ooooooo, Doug did not say border "thickening." If he did , it means Customs and non-tariff barriers not the Bridge]

So to us the way to strengthen the supply chains between Canada and the United States, to insure that the two great trading partners that we are can continue to trade is to build the DRIC Bridge, provide that redundancy provide that highway-to-highway connection so that we can insure that when people are making business decisions about where to locate businesses, where to source supplies from, they don't have to factor in, well, i'm not sure if my goods will get across the border. We need to build in that kind of certainty, that kind of security that businesses need when they're making investment in sourcing decisions.

[Uh, Doug, capacity is not the issue, traffic flow is! Just ask the Peace Bridge people and they will confirm it. That is why the Ambassador Bridge project is designed for traffic flow improvements not for capacity reasons.

Your issues are NOT bridge related but part of the "Dirty little secret" the Canadian Senate talked about years ago]

Andrea: Ok. Well, thank you very much, both of you, for joining us today.