Thoughts and Opinions On Today's Important Issues

Saturday, June 05, 2010

BLOGExtra: The DRIC Sub-Prime P3 Mortgage Deal By The Numbers

Oh dear. If the purpose of the MDOT/Transport Canada document is this:
  • "This document explains the proposed P3 arrangement and how financial risks would be allocated. It also addresses the issue of whether anticipated toll revenues could cover future costs, and demonstrates that Michigan would not be liable for any costs for the DRIC project."

then someone is in big trouble. I would NOT want to be the person defending it in front of the Michigan Senate.

Michigan Senators be alert. House members, demand a reconsideration of the P3 bill! It is not too late. Governor, take another outside of the State jaunt to look for jobs, say until election-time, so you cannot be breathless again and do more damage to your State.

Oh my, if MDOT does every P3 deal in the manner being proposed for DRIC, the State will be bankrupted!

Honestly, they cannot be serious with their financial information. It’s a disgrace. Three pages of garbage that say nothing. You can read it here at

http://www.scribd.com/doc/32546032/DRIC-Financial-Arrangements

The end result. DRIC is dead financially even before it gets started. Heck, Canada’s $550M offer will not be paid back for years.

The DRIC people and Transport Canada/MDOT finally understood that the Legislators had no intention to treated as fools by their minions. So in the last possible second they have finally provided dribs and drabs of information that is supposed to satisfy everyone so that the DRIC project can now move forward. Of course, the information provided is an insult but what can one expect from people who are trying to hide the truth from taxpayers and the Legislators.

Let us forget everything that we know about MDOT’s traffic projections by Wilbur Smith Associates. Let us forget that it is not an investment grade traffic survey but rather is a refresher of a Canadian study prepared by the same company that has never been made public. Since we do not know that the basis of the Transport Canada study, we have no idea if the refresher is right or wrong. Let’s just go with it for the purposes of this BLOG.

The first thing that jumps out at me in reviewing the materials is that somehow someone has forgotten that Canada’s $550M loan or whenever it is going to be is really a P3 investment by a private operator. It has to be paid back from the tolls remember.

I’d bet Gridlock Sam would not agree that less than $3M per year on maintenance for a major bridge crossing is smart. Wasn’t he very critical about how public bridges are looked after given his experience in New York. But the sums are so small I will ignore them for the exercise that follows. I’ll even forget salaries, benefits and profits too.

The next thing that is very interesting is that the revenues in 2016 are $60M, what the Ambassador Bridge earns today we are told. Amazing, traffic will double in 5 years if each bridge will carry half the traffic, how who knows. It appears that the assumption being made is that the new bridge will capture the vast majority of the business right off the bat. That is hardly realistic considering the Bridge Company competition, something that the P3 proponents have been very concerned about.

Risk allocation is also quite funny considering the provisions put into the P3 Bill which deals with this matter and allows MDOT to make the final determination. Someone seems to have forgotten that if there is a default, the bankers take it over and who knows what happens then.

Actually, it will be Canada who takes over because that is what Canada’s plan has always been. No wonder a constitutional amendment is being proposed in Michigan to thwart that.

There is a funny provision as well put in respecting the ramp up period. The bald assertion is made that shortfalls will be capitalized and repaid subsequently. For those who don’t understand what that means, shortfalls are added to the principal outstanding and that has to be paid back as well with interest. Interest on interest now too.

Oh, one other thing. That $1.6 billion for the road in Canada is a P3 deal as well with Canada and Ontario making availability payments. Take pity on me and my fellow countrymen. We are the stuck paying for that and for money on the U.S. side due to the generosity of our Transport Minister.

There seems to be a section missing however in this material. That deals with the annual cost for principal and interest that has to be paid back on the P3 deal. Was someone ashamed to show that, knowing that if it was set out then the deal would be dead? Obviously.

Don’t you find it silly. No, don’t you find it typical. It is insulting that this is all that can be produced to Legislators. No Senator should allow his/her bureaucracy to get away with it. Frankly, I would demand the full WSA financial report or hold MDOT in contempt if the Senate rules provide for that.

We are in fact invited by this handout to do the mathematics ourselves. So the BLOGMeister will do it.

We know that the Canada P3 loan will have to be paid back first. Let’s calculate what the amount will be per year for the $550M over 50 years. At 16%. That rate is about the halfway amount between the rates of return expected by a P3 operator who invests in a toll road (13-20%) would want to get back.

Then let’s do a calculation on $1.5 billion the total cost of the American side only on the same basis.

For the Canadian $550M payment, the amount to be paid back annually is $91.5M or a $31.5M shortfall from revenues.

For the total loan the amount to pay back annually is $250M leaving a shortfall of $190M to be capitalized and added to the principal.

Explain to me therefore how the P3 will be paid back based on a revenue of $60,000,000. Based on the total loan, the shortfall in year one would be huge and that amount would have to be added to the principal outstanding. That shortfall undoubtedly would continue for years with all those amounts being added to the principal. I am not going to do the math for that because frankly that’s beyond my ability as a mere lawyer and Blogger but I am sure that you get my drift.

Oooops, I think I can see how Michigan may have to pay something if we are on availability payments, can't you? So much for: "Michigan would not be liable for any costs for the DRIC project."

There is little possibility that I can see how this loan can be paid off within 50 years unless tolls are increased so dramatically that no one would ever cross the bridge. Alternatively to keep the tolls low, payments could be so organized that there would be a gigantic balloon payment at the end of 50 years that would have to be paid off by someone. Taxpayers no doubt. Alternatively, and as allowed under the House Bill, the term of the P3 agreement would be extended until who knows when so that Canada keeps control forever.

I guess we have to take what is given to us at face value because we are never going to be shown that the revenue projections can demonstrate “that there will be more than sufficient funds to cover costs.” If those projections are as good as the traffic projections then someone is in big trouble. If they could prove that this was a riskless no-brainer, then they would have been provided wouldn't they!

Clearly, based on the assumptions in this handout, most of the traffic must go to the new DRIC bridge. The scraps will be left over for the Ambassador Bridge and the Detroit/Windsor Tunnel. A big chunk of the business from the Blue Water Bridge would be taken as well. So much for their financial stability.

If this handout was designed to give someone some confidence that DRIC finances work, then it failed miserably. The DRIC-ites should surrender before the Senators have no choice now but to kill this DRIC project.

You know what I am thinking after seeing the numbers. It is time for someone to ask the question why this project has been allowed to go on for years at a cost of millions of taxpayers dollars when it was clear from early on that the traffic was not there and neither was the revenue.

Did they really think that Moroun could be scared that easily and could not figure out the math himself?

Oh I forgot, they are bureaucrats. In their world he would have been terrorized by now and would have sold out cheaply.

Friday, June 04, 2010

Making It All Worthwhile

It is nice to feel appreciated every so often by a reader.

I know that I and my fellow Windsor "political" Bloggers work hard to make our BLOGs interesting, informative and as accurate as we can.

We present our opinions on the news of the day, quite often providing an alternative perspective to that of the traditional media.

The traditional media like to mock us, building straw men they can then cut down:
  • "Newspapers are done," cries the blogosphere. "Stick a fork in them. Buh-bye."

    Newspapers will change, true. But those who think bloggers will somehow fill in the gap for free in some imagined post-newspaper world seriously misunderstand the nature of news. Despite the many criticisms of mainstream media, the truth is: quality journalism costs to produce.

    Online commentators add to the media landscape. But overall, bloggers rant. Provide opinion. Even point out flaws in our system.

    But they do little original reporting, and less in-depth reporting.

    Some admirable bloggers conduct serious research, but you can't expect them or anyone else to report for free year after year."

No one wants to replace the traditional media. My BLOG depends on their reporting obviously. But people read the BLOGs because, increasingly, the media is becoming concentrated in the hands of a very few.

Analysis of the news these days...don't be silly. A columnist or two, an Editorial page in the paper, a minute or two "news commentary" on radio and on TV...a half an hour or an hour on Sunday mornings when no one watches anyway.

So when I receive a note like this from a reader, well I wanted to share it with you. It makes it all worthwhile to me personally because it is from a Mayor of an American City. He has given me permission to post it. I have removed any references to his identity for obvious reasons:

  • Dear Mr. Arditti:

    I have only communicated with you once before and I thank you again for providing me the site to learn who voted on what side of the issue regarding the DRIC in the Michigan House.

    I want to take this opportunity to compliment you on your observations and writings in your blog because I have been able to keep abreast of the controversy on a regular basis. Had it not been for your e-mailed blogs, the only resources for the information would be the local print media here in southeast Michigan that is mostly biased in their support of the DRIC.

    I will admit, at first I thought the idea was good to build the second span in the downriver proposed site of the DRIC, but I now see the merit in allowing the Ambassador Bridge Company to build their twin span at their cost and scrap the DRIC project. If the forecasted traffic numbers are inflated, as has been insinuated, then our Country and State have no business in getting involved in such an expensive and perhaps needless proposition.

    Although I believe Mr. Moroun to be a very charming and interesting individual, I really do not have any allegiance to him or personal gain expectation to cause me to take his side in this matter.

    You point out many discrepancies in the $550 million "gift" from Canada and the whole P3 legislation and I can only hope the Michigan Senate will ponder these issues thoroughly before rendering their decision and I believe that they will.

    Once again, thank you for sharing your view with those of us that receive your blogs."

More On Windsor Politics

Some more random observations

DOES EDGAR NEED A NEW SPEECHWRITER

Here is what he said last year about the 2008 race

  • "Last summer, downtown Windsor restaurants and bars did booming business the entire weekend, Francis says, adding that he expects businesses to do even better this time around since Windsor is the official host in 2009.

    "I know that some downtown businesses in the hospitality industry were able to pay off their lines of credit due to the amounts of money they took in during the three days of the race."

Here is what he said this year

  • "The economic impact on Windsor last summer was significant and promises to be greater this year.

    "I understand that many businesses in the downtown core did so well during the three-day weekend that they were able to pay off their bills from the rest of the year."

Were people happy about Red Bill coming in 2009:

  • "Francis said the timing of the 2009 Red Bull Air Race in Windsor could not be better.

    "Our residents are still riding the emotional high of the Windsor Spitfires winning the Memorial Cup and now the Red Bull Air Race is here to help kick off our festival season," he said. "This weekend is going to be another incredible time."

How about in 2010

  • "The timing of this year's event could not be better though. "Our residents are still riding the emotional high of the Windsor Spitfires winning their second consecutive Memorial Cup and now the Red Bull Air Race World Championship is here to help kick off our festival season," Francis says. "This weekend is going to be an incredible time."

Actually he may have one who knows how to boost numbers:

  • Star Editorial in June 2009---"Downtown literally came alive, with more than 220,000 people watching the aerial aerobatics on this side of the border...

    The 60 aircraft that arrived at Windsor Airport brought in VIPs and media from around the world."

  • Star June 2010--"Last year the race came at a time when CUPE workers with the city were on strike and we still had 300,000 people attend the races," [Francis] continues"

    "Last year, the city-owned airport had to turn away private planes after reaching 75."

CAN DWIGHT BALANCE A CHECKBOOK

I do not think that Dwight is very good with numbers. That may cost him in his next election fight if he is still Minister of Finance.

Last year he said

  • "Duncan said a half-billion people would watch Windsor's debut on television, live or on tape, with media from around the world covering Red Bull's first-ever Canadian stop."

Then he said:

  • "Finance Minister Dwight Duncan said..."Last year, the Windsor race attracted a viewership of over one billion people worldwide ... it's an enormous tourism marketing opportunity for this community," he said."

But the Mayor contradicted him and frankly makes one wonder why we paid almost $2M extra to get the race. Didn't Dwight get the ratings numbers first:

  • "The exposure, you can’t even begin to quantify,” said Mayor Eddie Francis, who said the races have a significant worldwide following, broadcast around the world.

    The 2009 Red Bull Air Race World Championship program was watched by 270 million television viewers in 183 countries, according to redbullairrace.com."

Except Dwight also said recently:

  • "Last year's event was not just an economic shot in the arm for Windsor," says Windsor-Tecumseh MPP Dwight Duncan, who made the announcement with Windsor-West MPP Sandra Pupatello and Mayor Eddie Francis. "The excitement of the race was plainly seen not only by the people of Windsor but also the hundreds of thousands of viewers from around the world who tuned in to watch the race."

A billion viewers to a few hundred thousand. How much will that DRIC road really cost us!

MAYORAL POLLING

Someone is doing some polling.

The only candidates being looked at in this poll were Edgar (aka Eddie) Francis, Bill Marra and John Millson.

MORE POLLING

Incredible. The Star is going all out to try and get Al Maghnieh elected with another big story on him. Why they think he is so important that a Star reporter was assigned to go "on a road test Monday" with him. Now that is clout.

Clearly, his Zalev ploy fell flat. His work for Dwight did not excite anyone. The Liberal pollsters must have obviously identified THE BIG #1 ISSUE OF THE CAMPAIGN for Al to exploit:

  • "Ward 10 candidate says Windsor traffic lights not in sync

    Instituting a citywide network of synchronized lights at intersections as part of an “intelligent traffic management system” to improve citywide vehicle flows could be had for under $2 million, said Magnieh, who consulted an information technology firm on the matter."

CUPE, taxes, economic development, jobs...forget it. Fix those traffic lights. I wonder if traffic line painting will be next.

JONES' PRIORITIES

I see he has decided to run for re-election again.

Is this truly what he thinks is important for his residents:

  • a multicultural museum as a west end attraction,

  • streetscaping for Wyandotte Street West, and

  • enhancing the Odette Sculpture Park.

Hmmmm, I would have thought that fixing up the Wyandotte West roadway first would be more important.

If so, it should be an interesting campaign between him and John Elliott.

WESTJET SERVICE

  • "Federica Nazzani, President and CEO of Windsor International Airport [said] Thank you to our partner, WestJet, for choosing Windsor."

Doesn't that sound like a flight attendant at the end of a flight when the plane is coming in for a landing!

Will anyone ever tell us how much it is costing us in incentives to Westjet for this choice?

WE ARE NOT NEW YORK CITY OR VENICE OR PARIS

Poor Edgar. Someone needs to educate these Red Bull pilots. They are destroying Edgar's mind's eye vision of Windsor being a world city. They seem to like Windsor for being Windsor:

  • "It's exciting to race all over the world - I'll touch five continents this year - but I'm happiest to be back here in Canada," McLeod told The Windsor Star during a press junket in Windsor two weeks ago.

    "Last year was my rookie year and Windsor was special. The energy from the crowd and being Canadian - it was great," he continued.

    "It's a great host city. We go somewhere with populations of six million or 10 million and then you have this city with a couple hundred thousand. It's just as exciting for us to be here as one of those places. The big thing is how warm the welcome is and how excited the city is for the race and pilots."

  • "Perhaps there is no greater fan of the Windsor race than reigning Red Bull Air Race World Champion Paul Bonhomme of England. Bonhomme, who is also leading the series in 2010, won the Windsor race last year.

    "I love the Windsor race because of the friendly and fun atmosphere of Windsor itself. There is a sort of calm about the place with a underlying grin!...

    "I love the small-town atmosphere of Windsor... it's full of incredibly friendly folks who seem only to be concerned with the visitors having fun," he offered. "Meanwhile the town is able to arrange and host big events like the air race without any drama. It's like having the advantages of a big city and a small village but with none of the disadvantages."

Why even Edgar had to admit:

  • "And of course our local hospitality is second to none."

You see Edgar, it's OK to say you are from Windsor. You do not have to be ashamed.

Are DRIC Traffic Numbers Suspect

Traffic projections. Who is right and who is wrong? Here is what we do know:
  • DRIC expert's numbers are high, Bridge Co. expert's numbers are low

  • DRIC projections have been continually overly-optimistic even between the one-year period between the FEIS and the Wilbur Smith Report.

  • Bridge Co. report has been released

  • Canada's report prepared by Wilbur Smith has never been released publicly so we cannot judge on what basis the numbers were calculated and how accurate they are.

  • MDOT's traffic report, also prepared by Wilbur Smith, was not an investment grade traffic study but rather a "refresher" of the unreleased Canadian report

  • The MDOT report was not as required by section 384 ie "a detailed traffic projection for the ensuing 10 years, taking into account projected infrastructure modifications, expansions and improvements announced."

  • Revenue projections based on traffic numbers have been kept secret from Legislators by MDOT.
Let's forget all about the experts. Let's deal with something non-experts might be comfortable with and something that is easy to understand to test the DRIC figures. After all, that is what the Michigan Senators must do based on MDOT's incomplete information to decide if they should support DRIC or not.

Let's also forget that a Bridge built 80 years ago that had a tariff for cow crossings is now the #1 border crossing between Caanda and the US because its operation is the best.

Let's also forget about pre-clearance, technological improvements that make Customs quicker, FAST, moving Customs away from the border.

Let's forget as well that the Bridge is operating well under capacity and traffic is at the 1990's level. Moreover, even in Buffalo/Fort Erie the issue for the Peace Bridge is NOT additional capacity but traffic flow.

Let's forget as well that with the Ambassador Gateway project, in 1997 it was said that the bridge would be able to handle without a new one almost 5.4M trucks. And that is before all the significant changes with respect to Customs that have been taken and the new booths that have been added.

Even if you forget all of those factors that impact traffic numbers, don't you find this troubling especially when trying to figure out how many trucks will cross the border in the future?

DRIC wants to spend billions on a new border crossing for trucks primarily. At the same time, MDOT and railways want to build the Detroit Intermodal Freight Terminal (DIFT) in virtually the same area in SW Detroit.
  • "Intermodal freight is a shipping method used to send products from manufacturers to where people buy them. It is called “intermodal” because it uses two “modes,” trucks and trains, using special containers and trailers. Trucks take the product from the factory to a rail yard and trains move the products across the country. Finally, trucks take the products from a rail yard to their final destination.

    This is an efficient method of transportation because shippers move their containers from the trucks to the trains and back again without having to repack the products. This method also can be less expensive...

    The purpose of the Detroit Intermodal Freight Terminal project is to support the economic competitiveness of Southeast Michigan and the state by improving freight transportation opportunities and efficiencies for business, industry and the military. The goal is to ensure Southeast Michigan has a regional facility, or facilities, with sufficient capacity and interconnectivity to provide for existing and future intermodal demand, and reduce time, monetary costs and congestion to support the economic competitiveness of Southeast Michigan."

It is not cheap either:

  • "The terminal project, between Wyoming and Livernois avenues south of I-94, has a $445-million price tag in 2006 dollars (for the preferred alternative) and is designed to consolidate train and trucking infrastructure.

    MDOT has reached a deal with CSX Transportation, Norfolk Southern, Canadian Pacific and Canadian National Railroad to jointly develop the project."

What is fascinating as well:

  • "This is a significant accomplishment in that it represents the largest public/private venture in Michigan history, with the railroads agreeing to pay a large share of the costs," MDOT State Transportation Director Kirk Steudle said in a statement.

    No public/private partnership legislation is needed to make the project happen, MDOT said."

So if DIFT is being built to carry trucks, then why do we need a new DRIC bridge? And why do we need a P3?

That is the question that Dietrich Bergmann posed at the DRIC hearings. Take a look at his slides on 2 issues: traffic management and rail. Ask yourself why the DRIC consultants did not spend more time on these matters in their deliberations. Ask why there is the need to spend billions instead!



Road traffic mangement services is simply making it easier for drivers to figure out where to go considering traffic distances are virtually the same. Bergmann stated that the Blue Water Bridge, which is twinned by the way, is grossly underutilized.

Bergmann pointed out that MDOT already has such a system in Detroit:

  • "The Michigan Intelligent Transportation Systems Center, known as the "MITS Center," is the hub of ITS technology applications at the Michigan Department of Transportation. It is a world-class traffic management center where staff oversees a traffic monitoring system composed of 200 freeway miles."

In fact the MDOT website says:

  • "The system is being expanded to include coverage along I-96 from Novi to the Livingston County line and along I-94 from I-696 to 23 Mile Road. An expansion is also underway to provide motorists with real time information on I-94 and I-69 in St. Clair County regarding conditions at the Blue Water Bridge. These expansions will be operational by the end of 2009."

Yet MDOT does not seem to have done much over 5 years according to Bergmann to get more traffic going to the BWB. You remember Captain Kirk's excuse don't you: blame it on Matty:

  • "The owner of the Ambassador Bridge has rejected forming a collaborate, real-time traffic information system with the nearby Blue Water Bridge in Port Huron, Mich.-Sarnia, Ont.

    So says Kirk Steudle director of the Michigan Department of Transportation in an interview with a Detroit Free Press columnist...

    In response, Dan Stamper, president of Moroun's Detroit International Bridge Co., denies that his boss has ever rejected such a plan.

    "If Mr. Steudle is serious, tell him to pick up the phone or send me an e-mail and we'll sit down and work it out tomorrow," Stamper told the paper."

Or if one was cynical, one could say that there was no desire to have the BWB handle more traffic since that would kill the need for DRIC. But then again, I am no cynic!

Rail is even more interesting:






44% of truck traffic over the Ambassador Bridge could be diverted to rail. The benefits are set out. The cost to double-track the system to Windsor---Bergmann estimated to be around half the cost of DRIC. It should have been a matter to be looked at seriously considering rail rationalization in Windsor. Yet nothing significant has been done or even discussed in relation to DRIC.

DRIC's numbers suggest, according to Bergmann, that 2 trains an hour could handle the traffic.

Now Bergmann is not the first to say this:

  • "Windsor DRIC bridge should be kiboshed, say green groups
    New crossing called costly, unnecessary


    Sierra Club Ontario and Transport Action Ontario joined forces at Queen's Park Thursday in response to the Canadian government's $550-million offer last month to pay Michigan's costs for the binational feeder road and bridge project in Windsor-Detroit border corridor.

    "The DRIC plan is so flawed the offer is a desperate step to quickly start construction of the $5-billion project before it falls apart," said Natalie Litwin of Transport Action Ontario, an advocate for environmentally and economically sustainable transportation movement...

    Her organization suggests improved use of railways for freight in Windsor, citing the need for a new double-stacked Detroit River rail tunnel, greater use of the truck ferry and improved urban transit connections linking Windsor with Detroit and its suburbs...

    [Emma Cane, who spoke on behalf of the Sierra Club said] The Sierra Club believes border traffic problems in Windsor are caused by a lack of border staff.

    "They should devote more staffing and training at border crossings," Cane said. "It's not necessary to build a bridge."

But to me, the biggest farce is the following. Here is what DRIC estmates will happen to Blue Water Bridge traffic if a DRIC bridge is built. Clearly this volume has to be part of the DRIC business case for financial viability:

  • A seven percent decline in overall auto traffic on the Blue Water Bridge and a 16 to 18 percent decline in overall truck traffic with the introduction of a proposed DRIC crossing.

Now that is a lot of cars and trucks. Except here is what the Blue Water Bridge Authority, Government people so thay can hardly be Ambassador Bridge Co. friends, say which makes a mockery of the DRIC projection as well:

So forgetting everything else, if there are real and reasonable alternatives to DRIC, cheaper and more environmentally friendly, that will take a good chunk of traffic away from the border crossing here, then why is there a need to spend $5B+ on an unnecessary bridge project?

One does not need to be an expert to know that that there is more going on than building a DRIC bridge. Too bad it's being hidden from us.

PS

Don't you just love DRIC-ites. They talk out of all sides of their mouths and really do not care what they say to get the DRIC Bridge built.

Note that in the above discussion, I did not mention marine which the DRIC engineers also said could take traffic away from a bridge crossing.

But why listen to them when we can rely on a DRIC-ite to make the border crossing numbers even more ridiculous. At Mackinac we heard this:

  • "The proposed second bridge across the Detroit River between Windsor and Detroit could be the template for other public-private partnerships that could include a broadly expanded port in Detroit.

    “There’s a great opportunity for more maritime traffic in the Great Lakes,” said Dick Blouse this morning, former head of the Detroit Regional Chamber, during the Mackinac Policy Conference."

DUH Dick. If containers can use ships and ports and land at the Detroit Port, then why do we need a new bridge? The ships replace the trucks. All that is needed as you said previously is

  • "a few port improvements, such as the addition of a some tower dock cranes capable of plucking containers off ocean-going vessels."

Don't you remember your slide presentation boosting waterways:

  • Using the advantage of the Saint Lawrence Seaway, Detroit is a viable alternative for moving goods from Europe to the Midwest of the U.S. This would allow ships to bypass the congested and costly ports along the east coast.

    Likewise, goods arriving on west coast of the U.S. from Asia that are to be distributed throughout North America could use the Halifax Detroit route via the Panama Canal. This allows shippers to sidestep the equally clogged and expensive ports along the west coast. You save time and money, two critical elements in a fast-paced international economy. "

He obviously supports Bergmann on rail too because he said before:

  • "In the next few weeks, members of Blouse's board will visit Halifax to figure out how Detroit can divert thousands of cargo containers from the current shipping route between Rotterdam and ports on the southern U.S. coast such as Savannah., Ga.

    Detroit wants to see more containers offloaded onto CN trains that originate in Halifax, bound for its giant Toronto yards and points West. Halifax is currently handling less than half the 1.2 million containers it is capable of receiving.

    "Time is money in the shipping business and using Halifax cuts two days off the trip" from Europe to most of the U.S. market, Blouse points out. "But we're not wedded to CN and Halifax."

    CP Rail's connection to international shipping lanes via the Port of Montreal could also be used to achieve the same goal."

Thursday, June 03, 2010

Random Thoughts

Just some things I thought about

DOES SPANKY NEED A NEW JOB

I am very concerned about this Province's projections about revenues and taxes. Especially about the HST. If Spanky got it this wrong here, well who knows how bad things may be at Queen's Park.

Here is what Finance Minister Dwight Duncan said a in January about the Red Bull races to justify the 2 year deal to keep them in Windsor at an increased cost of $5M per year:
  • "The "Formula One of the sky" is coming back to Windsor this summer and the next.

    Hosting a local stopover on the Red Bull Air Race World Championship circuit doesn't come cheap -- Finance Minister Dwight Duncan said Ontario is committing up to $10 million over the coming two years to be the Canadian leg's lead sponsor. But the benefits, both immediate and potentially long-term, are huge, the Windsor-Tecumseh MPP said Friday in announcing the June 5 and 6 event.

    "Last year, the Windsor race attracted a viewership of over one billion people worldwide ... it's an enormous tourism marketing opportunity for this community," he said.

    Drawing almost 300,000 spectators to the riverfront last year, the 2010 event is anticipated to generate "hundreds of millions of dollars in spinoff benefits to the community," Duncan said in a joint announcement with fellow cabinet minister and Windsor West MPP Sandra Pupatello and Mayor Eddie Francis. "The Red Bull pours in a most immediate economic stimulus, filling up hotel rooms, filling up restaurants," said Francis.

    The province had to dig much deeper into its pockets -- the $5 million per year is a significant jump over last year's $3.2-million commitment."

However, here is what a recent Star story claims:

  • "Windsor pumped for Red Bull Air Race
    Spinoffs galore for region


    The Red Bull Air Race's $24-million economic punch -- the draft beers and meals, hotel bookings, private plane landings, casino wagers and even boosted art gallery revenues -- is already being felt, nine days before the show begins...

    The Ministry of Economic Development and Trade estimates the event generates $24 million in revenue for the region -- tourism dollars that translate into a spinoff effect of about $100 million."

Hundreds of millions down to $24M that reaches $100M if one includes spin-offs in such a short time. Wasn't that also the Super Bowl number that never materialized!

If he can be that wrong is such a short time about this event, what else is Dwight wrong about?

OLIPHANT IN THE ROOM

A shocking report on the Mulroney affair. However, the part that interested me was this comment on the Ethics Code:

  • "Upon reviewing the evidence of Mr. Mulroney's conduct and applying the ethical rules and guidelines in force at the relevant times, I find that Mr. Mulroney contravened Section 7(b) of the 1985 Ethics Code, which provides that public office holders have an obligation to act in a manner that will bear the closest public scrutiny, an obligation that is not fully discharged by simply acting within the law," Oliphant said in a statement.

    "In my view, Canadians are entitled to expect from those who govern, particularly the holders of high office, exemplary conduct in their professional and personal lives. Further, those who are making the transition from public life to private life must live up to the standards of conduct expected of them in order to preserve the integrity of government."

Section 7 (b) says "“[P]ublic office holders have an obligation to act in a manner that will bear the closest public scrutiny, an obligation that is not fully discharged by simply acting within the law.”

How does this apply in this City? It will be interesting to see what the Integrity Commish says on the complaints outstanding.

BLUE WATER BRIDGE SUPPORTS DRIC BRIDGE

Considering that it is a "Government" bridge, what else do you expect?

Considering that the Ambassador Bridge is their competitor and takes away business from them, what else do you expect?

Considering that no one has yet mentioned that the BWBA knocks down the argument about the US helping Canada during the construction of that bridge, I am surprised that they dared to write anything.

Here is their letter:



I guess that they are not concerned about security and redundancy at their twinned bridges since there is no mention of it.

They also knock out the DRIC suggestion that they will lose a lot of traffic to DRIC so the DRIC traffic numbers are even more suspect.

LESS AND LESSENBERRY

Hilarious column in the Star by Jack Lessenberry about licensing journalists. Take this comment as an example:

  • "Professional journalists wisely feel that they are just like everyone else when it comes to freedom of speech: When it comes to the right to report and publish, all men are created equal.

    True, that can occasionally be irritating to someone like this columnist, for example, who has a master's degree in journalism and has made a living doing various forms of it for more than 30 years.

    Most of the time, I hope that what I do is deserving of more respect than a "journalism blog" written by a high school dropout. (Though judging from my mail, not everyone agrees.)"

I assume that this is a put-down to the rest of the world and demonstrates how good he is at journalism. However, his Master's degree and all of his experience don't help him as far as I am concerned with his border columns that I read in US publications.

But this comment interested me as well. I am sure it was meant to be funny:

  • "But he also has one criteria that would eliminate virtually any real journalist from serious consideration. His bill says "in order to qualify, an applicant shall ... be of good moral character."

    That's the one thing of which few of us ever get accused."

IT'S A BLUE MOON

"Jones, a former firefighter, said he gave the bridge company credit for keeping security on the streets and fences in the area. But he said neighbours should still be vigilant."

Wednesday, June 02, 2010

Thoughts On Windsor Politics

It's the pre-election funny season. Time to talk about what is going on

QUEEN GIVES FINGER TO GIGNAC

I wonder if meeting the Queen will be on Councillor Gignac's election brochure. Probably not because she failed:
  • "Queen gets invite to Windsor

    When Jo-Anne Gignac went to England last Tuesday, she did more than just take in the sights. She invited the Queen to Windsor.

    Wearing a large bronze hat and a linen cropped jacket, Windsor's Ward 5 councillor joined about 8,500 guests at the Queen's summer garden party at Buckingham Palace...

    Gignac is excited about the invitation.

    "I know the people of Windsor will be thrilled," she said."

Well we know now where the Queen is going and it is NOT Windsor:

  • "Prime Minister Stephen Harper’s office released a preliminary schedule of Queen Elizabeth’s Canadian visit Wednesday, slated to run from June 28 to July 6 with prominent stops in Halifax, Ottawa, Winnipeg, Toronto and Waterloo."

Apparently, she is going to New York City too to address the UN.

Heck, blame the failure on the CUPE strike since it took place when she was sipping tea with the Queen, not the Councillor. Everything else wrong in this City is blamed on them so add this too.

WHY CAN'T WE HAVE A "WINDSOR" PARADE

Doesn't Edgar (aka Eddie) get it yet? Saying we are going to have an NYC type-parade won't bring the Queen here either.

It really is so pathetic. Is Edgar really ashamed of Windsor because we are too small-townish for a high-flyer like him:

  • "Windsor plans 'New York-style' parade Monday for Spits

    Regardless of whether they win or lose in the Memorial Cup final Sunday night, the Windsor Spitfires will be welcomed home with a "New York-style" parade on Monday...

    Windsor Mayor Eddie Francis announced the plans for the "Parade of Champions" Thursday, and said whether they win or lose the Memorial Cup, he'd like to see 20,000towel-waving fans decked out in Spitfires gear lining Ouellette Avenue...

    "This is our New York-style type of parade, lining Ouellette Avenue and the Spits as they make their way down into Dieppe Park," said Francis."

Watch out for the ticker-tape falling from our skyscrapers lining the parade route.

It reminded me of this football story:

  • "Giants to get NYC ticker-tape parade if they win, but why not parade in Jersey?

    New York City said Thursday that it would hold a ticker-tape parade for the Giants Tuesday if Big Blue wins the Super Bowl. The parade would head up Broadway's fabled Canyon of Heroes to City Hall where the team would be honored at a ceremony...

    So how come there's no parade here in Jersey where the Giants actually, you know, play and train? Jerseyans, do you feel snubbed? Where would you plan a Giants Super Bowl parade, Jersey style?"

TREMENDOUS YEAR

That's Edgar's new catch-phrase, for this month at least.

Good thing that mini-Gord did a column on the State of the City speech of Edgar or we would not have known how tremendous the year has been.

  • "Reaction to Mayor Eddie Francis's seventh state of the city address last week was so focused on his re-election plans -- will he or won't he? -- we overlooked what a landmark speech it was."

Mind you in his speech, Edgar did use the word "tremendous" but not in a good way:

  • "For our families … it has been a time of deep anxiety and tremendous uncertainty."

But now, tremendous has changed its colour

  • "Francis marks city's 118th birthday

    The fourth annual Mayor's Riverfront Walk saw crowds of citizens join Francis for the yearly walk along the riverfront, ending at Dieppe Gardens. The throngs cheered as Francis cut into a large birthday cake.

    Francis said the celebration showed a "positive sense of momentum building in this city" after what he called a "tremendous" year. "Today's just an amazing, awesome day for this whole community and region," Francis said."

  • "In double delirium

    Windsor Mayor Eddie Francis said the Spits' big win helped cap off a "tremendous" year for the city.

    "I think all of us are excited," he said. "The Spits have given us all a reason to be proud."

DWIGHT-LITE vs. EVERYMAN

Not fair. Al Maghnieh gets oodles of coverage and his main opponent so far, Jeff Gaudette, gets a few sentences.

No mention of the 80 people plus who showed up at Jeff's candidacy announcement, no photos of supporters either. So here are a few.




What has Al got going for him---"Al Maghnieh, who has spent the past seven years working in Finance Minister Dwight Duncan’s local constituency office"--- and trotting out the Zalev plant the way Edgar did in his first mayoral run until it became too expensive a deal and he backed away from it.

Here is how Gaudette will be campaigning. From his recent pamphlet




His theme clearly is bringing the Community together after the divisiveness of our Mayor and Council. It is a theme that will be a common one I would bet among many candidates.

It will be interesting if the Liberal machine can outgun the populist support that Gaudette has considering his background. If Maghnieh loses, there goes his political career so a lot is at stake.

Oh and it is doubtful now that Councillor Valentinis will dare run in this Ward.

THE SANDRA/EDGAR RELATIONSHIP

Why everything is just so peachy-keen between the two of them now since Sandra and Dwight crushed and smashed Edgar down over Greenlink and showed him who was boss that I do not want to rain on their love-in.

Do note in Doug Schmidt's BLOG though this comment that shows the fragility of the relationship:

  • "Pupatello modestly points out that all those projects and programs Windsor's using with skill to help itself climb out of recession "had their genesis in provincial policy."

She does NOT like Edgar taking credit for her work as he did with Sutherland as an example.

Gonzales Kills Michigan P3 Bill

Technically the Senate hearings are still ongoing. In reality, if this was the best that the DRIC-ites could do, they should just wave the white flag of surrender now and give up. It should result in a Senate rejection of the Bill. Just wait until you listen to Representative Gonzales' comments. He makes a mockery of his own Bill.

The Senate hearing started off nicely...for the opponents of a Bill that would remove Legislative oversight and give Absolute Power to MDOT to put taxpayers at risk.

Let me show you a copy of Representative Opsommer’s letter to the Senate to give you his position on the weaknesses of the Bill. It has to do with the pros and cons of the Bill. He spoke at the Senate session as well:







Then Representative Gonzales appeared. To be blunt, he completely destroyed the rationale for the P3 Bill in these two remarks of his:







So much for riskless. Nothing in life is 100% risk-free according to the Representative. Gee the Governor and Transport Minister Baird are going to be upset that a big DRIC booster just contradicted them. That makes the Ambassador Bridge project the only riskfree one!

Too bad taxpayers if toll revenues do not match availability payments owing to the P3 operator. Remember section 7B (14). You are now on the hook as confirmed by the Representative.

And the Representative told us about all of the great debates in the past over other infrastructure projects.







Yet his Bill takes away that important power from the Legislature and its job as protector of the public and gives absolute authority to MDOT. Is that constitutional?

With all due respect, does the Representative have the faintest idea what is in his Bill. Those remarks in themselves are grounds for killing the P3 Bill.

Some other statements of interest:

A member of the public, Dietrich R. Bergmann, presented. He had the nerve to ask why the DRIC people who said that 44% of truck traffic could be carried by rail did not look at this more closely.

He also pointed out that the distance to Detroit via the Blue Water Bridge or the Ambassador Bridge from, say, Toronto was just about the same. Yet the BWB traffic with 2 bridges is less now than in the late 1990's. He pointed out obvious traffic management techniques that could increase traffic at the BWB and slammed MDOT for knowing about this for 5 years and doing nothing about it. They want to spend billions on DRIC instead

I guess he forgot that MDOT screwed up the BWB plaza that will now cost over $500M to fix up and that is why truckers prefer to go to the Ambassador Bridge.

Well that got to Senator Bash-him who tried to smear Bergmann by asking if he was being paid by the Bridge Co. I wonder why he did not ask Rep Gonzales which DRIC consultants gave him donations. Would seem fair to me. Poor Mr. Bergmann was stopped when he started talking about it.

And Sarah Hubbard. If her P3 analysis was as accurate as her explanation about "availability payments" then Legislators should ignore her. She tried to say that there was no risk on Michigan by quoting this section:
  • "THE BONDS OR INSTRUMENTS SHALL NOT PLEDGE THE FULL FAITH AND CREDIT OF THIS STATE OR ANY POLITICAL SUBDIVISION OF THIS STATE AND SHALL NOT BE A DEBT OF THIS STATE OR ANY POLITICAL SUBDIVISION OF THIS STATE."

Uh Sarah, that section dealt with "ACTIVITY BONDS OR OTHER FINANCIAL INSTRUMENTS AVAILABLE UNDER ANY STATE OR FEDERAL LAW OR PROGRAM." That section is completely irrelevant.

In any event, "availability payments" do not necessarily involve bonds or notes. They are actual cash payments made to P3 operators. You forgot to look at section 7(B)14 which deals with State risk.

The truckers' friend David Bradley said in his remarks that the trade community in early 1990's asked for new infrastructure improvements. They got them: the Ambassador Gateway Project and the Ambassador Bridge Enhancement Project. I guess he forgot about them.

Speaking of 1990's traffic projections, here is what an Ontario Government Report projected traffic to be back in 1999

Wow, were they wrong! Just like DRIC today. Imagine having another fiasco with unneeded bridges just like at the Blue Water Bridge.

Bradley kept talking about the DRIC road. Dammit, it's not in the heart of Windsor, David. That's the Tunnel. You ought to know better than that. And also, the DRIC road can go right to the Ambassador Bridge with no traffic lights either. It's the same route that the Bridge Co. engineered years ago but which the Canadian Governments refused to build with their $300M BIF funds.

The biggest joke of the hearing occurred when Bradley said this:

  • "I do represent the private sector, and the people who believe in paying their way."

Tell that to the BWB people as he whinged on behalf of truckers when their tolls increased. Imagine the outbursts when truckers have to pay up to 4 times more in tolls to use a DRIC Bridge.

Finally, I felt so sorry for the gentleman from Chrysler who testified. As A DRIC-ite, he really did not want to say that, although the Ambassador Bridge tolls are higher than those at the BWB, most of their trucks (including those that serve EAST end Detroit plants I assume) use the Ambassador Bridge. Presumably they do so because the Bridge Co. operation gets trucks through quicker than the Government run bridge. When you take in the totality of costs including wait-times at the border, the Bridge Co. gets the majority of Chrysler's business.

That was day #1. How much worse can it get for DRIC tomorrow?

Tuesday, June 01, 2010

Michigan House P3 Bill

Wow, can the Michigan traditional media be that dumb or is there some other explanation for their failure to report the P3 story properly?

Since none of the major Michigan traditional media outlets have seen fit to go through an analysis of the House P3 Bill, then the BLOGMeister will do it, clause by clause! Instead of vilification, those legislators who are opposed to the P3 Bill should be congratulated as taxpayer heroes.

Someone needs to let the public in on the secret. The P3 Bill sucks. What the Bill says and what we are being told are two completely different things.

THIS BILL CLEARLY STATES THAT MICHIGAN TAXPAYERS CAN BE AT RISK FOR THE DRIC BRIDGE.

Keep on reading and I will prove it conclusively to you!

You see, dear reader, any of the House Republicans and House Democrats who voted against the Bill and any Senator who dares vote aginst the Bill must be scum since they are, in the words of the Detroit Free Press Editorial writers
  • "The remaining legislative holdouts are simply shilling for a billionaire fighting to maintain his monopoly at the busiest border crossing between the U.S. and Canada."

It seems as if the Editorial writers also have blinkers on since they must think that a new bridge built by the Bridge Company won't need workers, only a DRIC bridge will:

  • "Legislators who obstruct the crossing -- which will create thousands of good jobs and generate millions of dollars of economic development without exposing Michigan taxpayers to new liabilities -- will have a hard time explaining themselves if their opposition scuttles this critical project."

All they need to say is build the Ambassador Bridge Company bridge that really won't cost the taxpayers a penny and where the risk of the traffic projections is borne by the private sector. Let the opponents of that bridge take the rap.

Nice language huh--shills, obstructionists--when legislators are concerned about:

  • legislative oversight
  • giving absolute power to unelected bureaucrats
  • signing a blank check to Caanda who would become an "Instrumentality of Government" of Michigan with all the power that entails
  • allowing complete power in the MDOT Director to condemn property
  • possible taxpayer risk since P3 proponents want availability payments since toll revenues won't cut it and when the MDOT Director finally admits in the Free Press that Canadian and Michigan taxpayers have to pay out money on DRIC "But Steudle points out that much of that $5 billion won't be recaptured by tolls, including connections on the Detroit side and about $3 billion that Canadians will pay for the several miles of highway connecting the DRIC to the 401."

I am shocked that the Free Press Editorialists did not suggest that all of those legislators were on Moroun's payroll too. Oh it does not matter if they ever received a penny from him or not. Here is how one commentator did it to a Michigan Senator:

  • "is a new bridge certain?

    Well, maybe not. Two men stand in the way.

    One is, not surprisingly, Moroun, a reclusive, 82-year-old billionaire who has been savagely fighting any new bridge, using methods both legal and, according to the courts, illegal.

    His motives are clear: preserving his monopoly. What motivates the other enemy of a new bridge is more baffling, however.

    He is [Name of Senator], whose [Name of] district is far removed from the Ambassador Bridge and the Detroit River.

    Matty Moroun has been known to contribute heavily to the campaigns of politicians he wants to influence, but it isn’t clear that he has been a big donor to [Name of Senator]."

Neat approach huh. KAPOW, slam the politician whether he opposes based on principle or not. Call him/her an "enemy."

How about this from the same fellow. It's even better and attacks everyone with one blow:

  • "But Moroun isn’t giving up the fight. He figures Job One is stopping the competition.

    Accordingly, he continues to oppose DRIC. He donates lavishly to political campaigns, and whether for this or other reasons, he has strong supporters in the legislature still trying to stop the new bridge."

My gosh, how can there possibly be any other reason?

These politicians should learn. Take a page from the book of Representative Gonzales as an example who was one of the big backers of the P3 Bill. No one goes after him. No one cares that he took donations from: It's OK to take money from backers of DRIC just like it is OK for so-called consultants of DRIC who I thought were to be impartial to advocate for DRIC in paid advertisements.

Hush now....there can be no double-standard if it is action for a "PUBLIC" bridge.

Here are some comments I made about the P3 Bill that the Senators may want to consider. http://www.scribd.com/doc/32230285/Michigan-s-House-P3-Bill

Guess the number of times I used "Complete discretion in MDOT to determine."



It was only 38 times.

I hope that the Legislators understand this. When it comes to protecting the interests of taxpayers or the pocket-books of P3 operators, the Detroit Free Press clearly is on the side of the Wall Street bankers and their fees and the P3 operators' obscene profits.

  • "Third, opponents argue that legislation authorizing a public-private partnership to build the second crossing amounts to a power grab by the Michigan Department of Transportation. But that argument relies on the dubious claim that legislators are more qualified to oversee such projects than transportation professionals. In fact, ceding the power for individual projects to the Legislature would be a disaster. It would inject way too much politics into transportation policy. In any public-private partnership, policy control will -- and should -- remain with the public sector.

    Even so, compromise legislation could give legislators some control over individual tolling projects -- if such power were exercised early. Investors would not put up millions of dollars for a proposal, including traffic studies, for a public-private partnership if they believed the Legislature would simply kill the project for political reasons."

Yes, so messy are "politics" and the "public interest.

Yes, let's have the pros at MDOT who screwed up the plaza at the Blue Water Bridge that will cost a half a billion taxpayer dollars to fix, look after P3s too. Yup, the same people whose traffic projections have been completely over-optimistic. Yessiree, those MDOT folks who are hiding the revenue projections from Legislators because they don't want them to know that toll revenues won't cut it. Yes the people who buried this provision in the Bill that should tell you that Michigan taxpayers will be screwed:

  • "(14) FOR ANY INTERNATIONAL BRIDGE CROSSING THAT DOES NOT EXIST AS OF THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED THIS SECTION, A PUBLIC-PRIVATE AGREEMENT FOR ANY SUCH INTERNATIONAL BRIDGE CROSSING SHALL INCLUDE RISK ALLOCATION PROVISIONS SPECIFYING THE RISK ASSUMED BY THE CONCESSIONAIRE AND EACH INSTRUMENTALITY OF GOVERNMENT THAT IS PARTY TO THE PUBLIC-PRIVATE AGREEMENT RELATED TO THE PUBLIC TRANSPORTATION FACILITY, INCLUDING THE RISK RELATING TO CONSTRUCTION COST OVERRUNS AND, AS APPLICABLE, TOLL REVENUE SHORTFALLS.

    BEFORE APPROVING AND ENTERING A PUBLIC-PRIVATE AGREEMENT FOR ANY INTERNATIONAL BRIDGE THAT DOES NOT EXIST AS OF THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED THIS SECTION, THE DEPARTMENT SHALL ENSURE THESE RISK ALLOCATION PROVISIONS PROVIDE FOR THE MOST ECONOMICALLY BENEFICIAL WAY FOR THIS STATE TO PERFORM THE PROJECT, WHILE MINIMIZING LIABILITY FOR CONSTRUCTION COST OVERRUNS AND TOLL REVENUE SHORTFALLS FOR WHICH THIS STATE COULD BE HELD LIABLE, AND THE DEPARTMENT SHALL SUBMIT A REPORT TO THE GOVERNOR EXPLAINING HOW THIS MANDATE WAS FULFILLED."

Huh, what is going on here. Shortfalls, revenue shortfalls, FOR WHICH THIS STATE COULD BE HELD LIABLE, how they will be minimized...I thought this was a riskless, no-brainer for the State. Now that seems to be a lie if I am reading this correctly.

It appears as if MDOT is anticipating a toll revenue shortfall as the P3 RFPOI proponents suggested and here come “availability payments” where taxpayers foot the bill!!! And how do they get off the hook for "oversight?" Merely have the Governor appointed Director reporting to the Governor with NO RPEORT TO THE LEGISLATURE!

How could this possibly happen you may think with Canada's riskless $550M? Simple, due diligence considerations result in unresolved differences can mean that a deal cannot be made with Canada for the $550M. However, since the P3 legislation has been passed, Canada and MDOT can make whatever deal they want even if there is a revenue shortfall that taxpayers have to make up.

It's really that easy. Why it's brainless.

Does not give me a whole bunch of confidence. I wonder how the Free Press Editors feel.

BreakingBlogNews: No DRIC Loan Coming From Canada



You can try and explain it a different way. I cannot!

NO MONEY IS COMING FROM CANADA TO MICHIGAN AT ALL FOR THE DRIC PROJECT. IT'S ALL COMING FROM SOME P3 OPERATOR THAT HAS NOT YET BEEN PICKED THAT HAS TO BE PAID BACK. FROM TOLLS? NOT A HOPE!

Have you all in Michigan ever been taken to the cleaners by Canada. One thing said in Michigan, another in Ottawa as you shall see below.

Not one single penny will be paid by the Canadian Treasury, unless it may be for bridge financing. Hey, that's what short-term financings are called (and you thought Canadian bureaucrats had no sense of humour). No wonder there was nothing budgeted for it in Canada's Economic Action Plan that I could find. No wonder Michigan needed a P3 Bill. It could NOT get any money otherwise. Canada is not that stupid to loan money to Michigan.

We come back to what this is really all about. If it is all about a P3 deal, Michigan did not need Canada to do its negotiating with a P3 operator. All of this charade was done in the end so that a P3 Bill would be passed to circumvent the Michigan Senate's opposition to DRIC. Even Minister Baird said he would have trouble getting a Bill through that branch of the Government.

What the heck is going on? Is this really how Government works? You have to follow this timeline of events of the $550M or rather the UP TO $550M offer by Canada to Michigan to pass the P3 legislation:

1) The DRIC-ites claimed it was NOT a loan



2) Minister Baird in the excerpt from his interview I posted called it a loan (see below)

3) Now Minister Baird in his session before Canada's Transportation Committee the day after the P3 Bill was passed in the House made this startling admission that puts a mockery to everything that has been said to date:

  • Hon. Joseph Volpe: Now if I can go back to your success in Lansing. I'm just wondering whether you think that the $550 million offer that you laid on the table for Michigan legislature had anything to do with your success?

    Hon. John Baird: I think there's no doubt that the State of Michigan has some significant financial pressures. That was a significant issue for Legislators. This has been done in the past, but the other way around, where the Americans' support for the Blue Water Bridge in Sarnia. I think there's no doubt that it assisted.

    Hon. Joseph Volpe: Did you ask the Auditor General whether that $550 million would pass her examination?

    Hon. John Baird: Well, the Auditor General doesn't give pre-clearances. She's the Auditor after the fact. She will not give a pre-clearance on any issue before government.

    Hon. Joseph Volpe: So did you ask the Justice Department whether it was a legitimate offer for you to make?

    Hon. John Baird: We're comfortable with it. I should underline that it's up to $550 million. It's not a loan to the State of Michigan. It'll be part of the P3 Project.

    Hon. Joseph Volpe: But it's all going to be paid for by tolls, as you put.

    Hon. John Baird: Correct.

All Michigan got was a crummy 2-page letter. Not cash. Certainly NOT from Canada. It would come as part of a P3 deal. Now wonder the Governor was breathless. This stuff was spun so quickly it must have taken her breath away. She was holding her breath to see if House Legislators would buy into this stuff

No wonder that Baird laughed in his interview when he talked about the letter. He knew it was a joke. Now we do too.

No wonder there was a need for "due diligence" in the Terms and Conditions. Those terms would be negotiated by some third party ie the P3 operator. They would NOT be negotiated by Canada and that is why they were not included as part of the letter.

Now certain words are coming home to roost. Listen carefully to what Baird says in his interview:





video



The Minister talked about Canada being a "credit facility." He said the money will be part of the financing arrangement and will be rolled into the financing arrangment. He needed a P3 Bill or else no money would ever come since Canada was not putting up a single dime! It was exactly as MDOT Director Steudle mentioned as well. As I Blogged before:
  • "I have to tell you that the so-called toll payments to pay off this $550M are another sleight of hand. What will happen is that this money will all be "rolled up" into the financial arrangement so some P3 operator will have to pay Canada back. You truly cannot believe that Canada would trust a virtually bankrupt State like Michigan to be able to pay back a half a billion dollars do you. That is exactly why Michigan and more importantly Canada needs the P3...so a private investor can pay off the credit facility and roll up this money into the financing.

    If you remember, Captian Kirk told us about this roll-up when he talked about the $100M in the first hearing. Now that Baird really explained what it means, you know who taught the Captain. Hurrumpf...the Michigan media missed that one."

No wonder that MDOT snuck in the "availability payments" section of the P3 Bill that puts Michigan taxpayers at risk on this no-brainer, riskless deal.

  • "(14) FOR ANY INTERNATIONAL BRIDGE CROSSING THAT DOES NOT EXIST AS OF THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED THIS SECTION, A PUBLIC-PRIVATE AGREEMENT FOR ANY SUCH INTERNATIONAL BRIDGE CROSSING SHALL INCLUDE RISK ALLOCATION PROVISIONS SPECIFYING THE RISK ASSUMED BY THE CONCESSIONAIRE AND EACH INSTRUMENTALITY OF GOVERNMENT THAT IS PARTY TO THE PUBLIC-PRIVATE AGREEMENT RELATED TO THE PUBLIC TRANSPORTATION FACILITY, INCLUDING THE RISK RELATING TO CONSTRUCTION COST OVERRUNS AND, AS APPLICABLE, TOLL REVENUE SHORTFALLS.

    BEFORE APPROVING AND ENTERING A PUBLIC-PRIVATE AGREEMENT FOR ANY INTERNATIONAL BRIDGE THAT DOES NOT EXIST AS OF THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED THIS SECTION, THE DEPARTMENT SHALL ENSURE THESE RISK ALLOCATION PROVISIONS PROVIDE FOR THE MOST ECONOMICALLY BENEFICIAL WAY FOR THIS STATE TO PERFORM THE PROJECT, WHILE MINIMIZING LIABILITY FOR CONSTRUCTION COST OVERRUNS AND TOLL REVENUE SHORTFALLS FOR WHICH THIS STATE COULD BE HELD LIABLE, AND THE DEPARTMENT SHALL SUBMIT A REPORT TO THE GOVERNOR EXPLAINING HOW THIS MANDATE WAS FULFILLED."

"Most economically beneficial," "minimizing liability, THIS STATE COULD BE HELD LIABLE." Why is there such talk on a riskless, no-brainer deal with Canada?

Michigan Legislators, you have been "punked."

Monday, May 31, 2010

The Vilification of Matthew Moroun

It did not take very long for you to be demonized Matt did it?

What was it, a couple of interviews where you stated some facts that the DRIC-ites did not like and bang...Like Father, Like Son. Big Windsor Star headline, story and photo designed to discredit you and make it impossible for Michigan Legislators to support your project.

As far as I am concerned, it was shoddy and irresponsible journalism. Remember this principle and standard of practice set out in the Ontario Press Council website:
  • "Diligently seek out subjects of news stories to give them the opportunity to respond to allegations of wrongdoing.

Did that happen when this story was first reported. Nothing about that in this story that I saw:

  • "Matthew Moroun told John Baird that Ambassador Bridge would 'destroy' DRIC, says Jeff Watson

    By Dalson Chen, The Windsor Star May 28, 2010 3:56 PM

    Ambassador Bridge vice-president and heir Matthew Moroun told federal transport minister John Baird that the bridge company will “destroy” the Detroit River International Crossing project, says Essex MP Jeff Watson.

    Watson said he and Baird encountered Moroun — son of bridge owner Manuel “Matty” Moroun — by chance in the hallways of the legislative building in Lansing on Wednesday. Watson said it was the first time Baird and Moroun have met face-to-face.

    “Mr. Moroun did take the opportunity to express — probably in the most succinct language I’ve heard yet — that the intention of the Ambassador Bridge company is to ‘destroy’ the DRIC,” Watson said.

    “Those are the words Matthew Moroun used.”

And what did the Star say about your side of the story, Matt-----NADA. ZERO, ZILCH. It does not even look like you were contacted at all before the story was posted.

Oh then we got version #2

  • "Matthew Moroun told John Baird that Ambassador Bridge would 'destroy' DRIC, says Jeff Watson

    By Dalson Chen, The Windsor StarMay 28, 2010 5:38 PM"

This time you were mentioned Matt:

  • "But Moroun disputed Watson’s account of the conversation, and said he is disappointed that “my attempt to introduce myself to Minister Baird” is being misused.

    “I never used the word ‘destroy,’” Moroun said via phone from his office.

    According to Moroun, he said to Baird: “Despite what others may have told you about me and my company, I believe that if you got to know me, you would find those remarks to be false.”

    Moroun said he offered “cooperation” with Transport Canada on short-term improvements to the bridge and border...

    Moroun said he did not notice Watson, and did not engage Watson in conversation...

    In a letter sent to both Baird and Watson, Moroun reiterated that “I still feel our fighting each other is resulting in missed opportunities” for Transport Canada, the bridge company and the public."

Again, not clear who called whom but assuming the reporter called you Matt, why did it take him 2 hours to do so and why couldn't he have called you before posting the first story? Interestingly, the reporter has a copy of your letter but only chose to publish one paragraph of it? Why?

Gee, Mr. Watson is a pretty big guy. I am surprised Matt that you did not see him. He must have been close by to hear everything. I wonder where he was standing in relation to Baird and why he did not say hello to you.

Then Revision #3

  • "Bridge heir denies threat to 'destroy' DRIC
    MP cites remark made in Lansing


    By Dalson Chen, The Windsor Star May 29, 2010"

Notice nothing in the first 2 headlines with you, Matt, denying what was said.

So who is the liar? Who is telling the truth? We will never know. However dear reader, here is some circumstantial evidence that might help you decide.

From watching the CBC interview, it looks like Watson's interview where he made his remarks took place at Windsor Airport where there was an 11 AM press conference. So it either happened slightly before the conference started or after that time when the conference was over.

Here is the interesting part. Matthew Moroun did use the word "destroy" earlier in the morning on the Paul W. Smith Radio show on WJR but it was used in a different context completely. He talked about Canada and Michigan "destroying" his family's business NOT the other way around http://www.youtube.com/watch?v=mAVOerOWm38








Oh, by the way, his show is on from 5:30 – 9:00 AM I believe Moroun's interview took place at 6:56 AM.

Oh pshaw, Blogmeister, you might say, that is hardly convincing. And you are right. Here is something more compelling.

Keep in mind this timeline:

  • Wednesday, meeting in Lansing
  • Thursday, Bair and Watson back in Ottawa for a Transportation Committee morning hearing
  • Thursday, Watson Statement in the House of Commons
  • Friday, Watson anti-Moroun remarks.

Consider what Watson said and how shocked he must have been about Moroun's remarks in the Star story:

  • "probably in the most succinct language I’ve heard yet...

    Asked his opinion on the exchange, Watson said he found Moroun’s statement “rather provocative.”

    “I think the language speaks for itself...

    That was the most direct language I think I’ve heard used by the Ambassador Bridge to date.”

So the next day, after Lansing, with the issue of the DRIC bridge being brought up in Committee, did Baird raise this "rather provocative" statement by Moroun: Nope.

Did Watson raise this "rather provocative" statement? Nope but he did go after 2 other Bridge people, one of whom who is struggling with a vicious disease. He could take an uncalled for cheap shot at her but no attack at Moroun:

  • "Mr. Jeff Watson: Okay.

    Also, I know the Liberals, it's become clear, favour the Ambassador Bridge monopoly. That's been a long-held position, I guess, for the party. Former Liberal cabinet minister, Susan Whelan, who was offered a very soft landing by the Ambassador Bridge, with a job there after I defeated her in 2004. But here's what Mr. Stamper—

    Hon. Joseph Volpe: A point of order, Mr. Chair.

    The Chair: Mr. Volpe, on a point of order.

    Mr. Jeff Watson: It better be a point of order, Mr. Chair. I would hope.

    Hon. Joseph Volpe: Yes.

    I think, Mr. Chair, there's always a lot of leeway for what people can say or not say, and we try to stay away from statements that inflame passions of partisanship.

    Ms. Whelan has not been a member of Parliament for some years. Minister Van Loan was an employee of the Ambassador Bridge. Last time I checked, Mr. Van Loan was still a member of the cabinet. I did not mention his name. I did not talk about recusal. I did not talk about casting aspersions on people who do their jobs, and I don't think anybody around this table does.

    I would ask you to ask Mr. Watson to stick to questions related to the decisions with respect to what Michigan did or did not do without talking about whether somebody lands softly or harshly after they have left public office.

    Otherwise, I guess what we're going to do is we're going to have to ask how it is that a Minister of the Crown currently can recuse himself from a decision when you can only do that or only need to do that if you actually still have an interest in the decision that's being made.

    So if Mr. Watson was wanting to raise a point of order so that we can entertain back the idea of bribery and corruption in this government, well, then, let's go ahead. Otherwise, let's be serious and ask the Minister questions that link to the estimates…

    Mr. Jeff Watson: Thank you very much, Mr. Chair. It was part of a preamble to a question I was moving to, by the way.

    Mr. Dan Stamper, President of the Detroit International Bridge Company, was quoted in The Windsor Star this morning about that process in Lansing yesterday, and I quote him. He said, “We've had fun here”, referring to the Ambassador Bridge folks. He goes on to say, “We understand now how the game is played in Lansing.”

    I think the unemployed in Windsor–Essex would hardly view this as a game with respect to their future. I don't know if you'd care to comment. Do you share Mr. Stamper's view that a new crossing between the two countries and maintaining or enhancing the importance of our trade with the United States is somehow, all revolves around a game?"

Hmmm, that's odd. No slam at Matthew Moroun and his "rather provacative" remarks. Why not?

Then Mr. Watson made this statement in the House of Commons. Did he take a shot at Matthew Moroun here. Nope:

  • "Mr. Jeff Watson (Essex, CPC):

    Mr. Speaker, following today's historic address by Mexican president, Felipe Calderón, I rise in the House today to reaffirm the importance of NAFTA to the flourishing trading relationship on the North American continent.

    Since NAFTA's implementation, merchandise trade between Canada, Mexico and the United States has more than tripled, reaching $946 billion U.S. in 2008. Today, Canada, the U.S. and Mexico trade roughly $2.6 billion U.S. in merchandise on a daily basis. That is about $108 million U.S. per hour.

    NAFTA has proven that liberalizing trade is an important tool in promoting transparency, economic growth and economic stability. It has been such a success to the North American continent that countries, such as Colombia, now also want to open their own markets to benefit from the economic prosperity on the North American continent.

    I call upon parliamentarians to do what is right for Canada and for Colombia and to pass the Canada-Colombia free trade agreement. Colombia is more than just its past civil injustices. It is time that those opposed to this agreement stop focusing on--"

I wonder why Jeff had to wait so long to make his allegation. Why did he have to wait several days? Why didn't he do it when he had the perfect opportunity? Perhaps some reporter could ask Mr. Watson that that one day and then you and I can use his answer to help us make our decision, dear reader.