Ottawa’s O-train (Part II): A Cost-Effective Project

April 16th, 2013 by ant6n

In the first part of this series, I introduced the O-train and how it works as a transit line. The second part is how it got running, and how cost effective the project was.

O-Train over Rideau River

O-Train over Rideau River (in public domain, via wiki commons)

The O-Train was built as an evaluation project for light right technologies, to test whether it would make sense to build it all over the city. The project was realized pretty quickly and cheaply: After a yearlong study the pilot project was approved in September 1999, and public service started on October 15, 2001. The initial budget of 16$ Million had grown to about 21$ Million by the time the train started running. It is a very cost-effective project, both in cost/rider and cost/km. Compare to a couple of other transit projects (not necessarily light rail):

rider/km cost/km
O-Train (lrt) 8 27 14 1750 3.3 1901
C-Train (lrt) 29.3 582 187 6382 19.8 3110
Edmonton lrt 12.2 404 70 5738 33.1 5774
Pie-IX Busway (brt) 15 316 70 4667 21.1 4514
Laval Extension (metro) 5.2 829 60 11538 159.5 13825
Spadina Extension (metro) 8.6 2400 100 11628 279.1 24000
Train de l’Ouest (commuter) 33 1000 41 1231 30.3 24608
Train de l’Est (commuter) 44 671 11 250 15.2 61000

Naturally, these projects are not directly comparable, but generally one should expect cheaper projects to get less riders, so that the ratios work out to be at least in the same order of magnitude. But the O-train is a bit of an out-lier, even compared to the initial segments of the Calgary C-Train, which is considered one of the most cost effective transit projects in North America (by attracting a lot of riders to the relatively low cost rail lines).

The low cost of the O-train is due to the construction on an existing freight line, the use of a single track except for a passing point at the center station, the relatively high ridership for the short line thanks to it’s main anchor, Carleton University – the smart transit planning introduced in the previous part of this series. But even then, the capital costs are surprisingly low for what was built. The following shows the capital budget, taken from a report of the O-train, with items listed in thousand dollars:

Expenditure Budget Actual Cost
Corridor Lease $ 515 $ 535
Track Rehabilitation $ 1,525 $ 1,925
Tunnel/Bridge Rehabilitation $ 1,275 $ 1,532
Station Construction $ 4,675 $ 5,700
Fencing Installation $ 405 $ 566
Train Control $ 590 $ 1,088
Operator Training $ 300 $ 718
Vehicle Acquisition $ 4,875 $ 5,369
Vehicle Modifications $ 675 $ 614
Vehicle Maintenance Facility $ 755 $ 1,160
Project Management $ 190 $ 770
Start-up Marketing $ 50
Monitoring Equipment $ 165 $ 299
Other Items $ 17
Noise Fencing $ 447
Total $   15,995 $   20,740

The Stations

Several of the items appear pretty cheap, compared to other projects throughout North America – for example the reconstruction of one commuter rail station near Montreal cost 20$ million by itself. Consider the cost of the stations: less than 6$ million for 6 platforms, that’s less than a million per platform. It certainly helps that the platforms are only 35m long, and built very simply with identical design, with an asphalt or concrete surface and bus-style shelters. Also, no parking.

The stations are pretty spartan

The stations are pretty spartan.

The Trains

The vehicle acquisition is another item on the budget that appears pretty low – around 5$ Million for three trains. Each of them is equivalent to a bit less than two 85 ft passenger cars as they are used in North America on mainlines. That’s equivalent to about 1$ Million per car. Consider other rolling stock purchases for similar non-compliant DMUs, which are all small orders from North American transit agencies:

train Location/Service order year units unit cost capacity
Talent Ottawa O-Train 1999 3 1.8 M$ 280
Desiro NCTD Sprinter 2004 12 4.2 M$ 230
GTW 2/6 Austin Capital MetroRail 2005 6 5.4 M$ 220
GTW 2/6 Denton County A-Train 2009 11 6.7 M$ 220
Lint 41 Ottawa O-train 2011 6 5.7 M$ 260

These numbers are approximations. There’s been inflation over the years, the capacities may not be exactly comparable (i.e. by removing seats, capacity can be increased, and standing capacity can be counted in different ways), just like the trains themselves (e.g. some trains are more powerful than others). Also, the cost of the vehicle depends on the size and kind of the acquisition contract.

Nevertheless, it is obvious, given the tiny order, that the Talents were an amazing deal. They should’ve cost three times as much. And while the budget lists the vehicle acquisition as 5 million, a closer look reveals that they did in fact cost three times as much. Take this quote from the report:

The approach to vehicle acquisition was to buy the three trains for $17.1 million with a guaranteed buy-back of $13,537,500 after the two-year pilot phase for a net cost of $3.563 million.

Basically the trains were a lease for the two year pilot project, and had to be paid off when the project continued. This makes sense, given that the O-train started as a 2-year evaluation project, and it could’ve been discontinued after that. But it results in an unfair comparisons with other projects that use the full capital cost of the vehicles involved, and so that fact should be kept in mind.

It is still a pretty decent deal considering how small the order was, and how quickly the trains were delivered. Apparently they came so quick and affordable because they were surplus/option trains from a larger “BR 643”-order made for Deutsche Bahn (unfortunately I couldn’t find a source for that original order, or what exactly the option/add-on deal looked like). Presumably this explains the similarity with the DB trains, and some of the German signs that exist on the train.

DB actually preferred a more powerful version of the train, the “BR 644”, which uses a diesel-electric rather than a diesel-mechanical drive, which allows faster acceleration and mixes better with electric trains. Ironically, the diesel-electric version would be more appropriate for the O-train with its short interstation distances, Ottawa probably uses the diesel-mechanic Talents in its most rapid transit-like application.

The Corridor

The infrastructure was leased, just like the trains. The contract was with CP (Canadian Pacific Railway), who owned the infrastructure, as a public private partnership. CP provided the corridor, upgraded the infrastructure, built the stations, and provided the maintenance facility. The partnership also included Bombardier for trains, their maintenance and the signalling system. The lease included the provision to purchase the corridor for around 11$million at the end of the contract. There was also an option to extend the lease for two years – which the city exercised, and finally purchased the corridor in 2005 (at which point the city also paid half a million in deferred costs from the original design/build).

CP actually considered the corridor lease too low, so there was a clause in the contract for ‘incentive payments’: for every passenger above 5100 per day, CP was supposed to be paid 70 cents per passenger. By the end of 2005, 380K$ of those incentive payments had accumulated (it seems that CP waived about 200$K of those when the city purchased the line in 2005). This seems like another way in which the capital budget was kept a bit lower, possibly at the expense of future capital costs (or operating costs, depending on how the accounting is done). On the other hand, this may have also provided an actual incentive for CP to make the line attractive for users.

It is clear that the O-train was a cost effective project in terms of capital costs. But it may not be quite as cheap when deferred capital costs are considered. Once the total cost for the vehicles and and corridor are included in the capital cost estimation, the total cost is around 40$million, double the initial capital budget, but still pretty low.

Operating Costs

It should be expected that the operating cost of the O-train are not very favorable compared to buses. There is a lot of infrastructure and vehicles that need to be maintained. The fact that this is such a short line, with relatively few riders per km compared to actual rapid transit lines, and a tiny vehicle fleet doesn’t help, in terms of economies of scale. Plus, with three trains, two of which are always operating, at most two thirds of the fleet is operating. Such a high spare ratio should result in higher operating costs. Additionally, the project seems to have been designed with the desire to keep capital costs low, so costs may have shifted to the operations side.

It certainly helps that the ridership is pretty high given the scope and line length of the project. Nevertheless, the operating cost per passenger was higher than for buses during the initial years: during the first years, only about 30% of the cost was covered by ticket fares, compared to about 55% for the OC Transpo system as a whole.

Nevertheless there are cost-effectiveness measures on the operations side that are interesting and unique. For one, the O-train was the first federally regulated railway using single man operation (i.e. no conductors). Additionally, the drivers where actually taken out of the pool of OC Transpo bus drivers, instead of hired locomotive engineers. When the system started, 28 bus drivers completed the training to operate the O-train. This large reserve pool means that there is never a shortage of drivers, contributing to the service reliability of more than 99% (compared to 70% for the overall system). And when the drivers are not operating the O-train, they are still operating buses. This is an interesting approach not only to reduce the costs of reliably providing vehicle operators, it also addressed the concerns of the labor union, which saw the rail line as a threat to their members’ livelihoods.

Overall it should be obvious that the O-train was a very low-cost project. For a rail project, especially one of this small scale, it seems to have been very cost-effective. However, the costs may not be quite as low as they appear at first sight – one has to be careful to not count the start-up costs for the evaluation project as the capital costs of the transit line. Other projects attempting to emulate the success of the O-train should be mindful of that.

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