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Far From Boring:Meet the Most Interesting Tunnel Boring Machines

2018-01-28T17:29:33Z

Right now in Los Angeles, Elon Musk is playing in the dirt with his shiny new toy, a second-hand tunnel-boring machine (â€œTBMâ€) named â€œGodotâ€. He hopes to revolutionize car travel by building highways underground, in â€œgoing 3dâ€.

Muskâ€s antics have already drawn criticism from transit-planning experts. Jarrett Walker points out that Muskâ€s ideas are inherently anti-urban and anti-transit. Alon Levy shows that the technological claims Musk makes about tunnel technology are bogus: Musk seems to believe that there are a lot of low-hanging fruits to improve tunneling technology, whereas in reality, the technology is already very advanced.

People tend to think itâ€s the tunnels that are the most expensive part of underground systems like metros, but thanks to the already existing TBM technology, they often represent only a small portion of the overall cost. Sometimes as little as 10%.

The most expensive parts of subways are the stations. In my view, modern boring technology becomes interesting when we can use it not just for the tunnels in-between the stations, but to build the complete system, including the stations, cheaper.

Many tunnel building innovations have been developed by various companies to deal with real-world constraints. They give us TBMs like these:

the Giant TBM
the Vertical TBM
the Diagonal TBM
the Rectangular TBM

The Giant TBM

Musk says he can build tunnels cheaper if he just makes them smaller. But in reality, itâ€s not small TBMs that are the future, but big ones. The cost of a TBM doesnâ€t get much higher as you increase its diameter. Tt is therefore cheaper to build one very large tunnel, rather than two smaller ones. So giant, linear tunnel building factories have been constructed, with some reaching up to 17.6m in diameter.

The two phases of tunneling: pushing forward & installing the tunnel lining (check out the full video here)

A large diameter tunnel becomes really interesting for the construction of a metro, if it is large enough to fit not only the tracks, but the station platforms inside it. This saves costs because itâ€s unnecessary to excavate large caverns, possibly dug from above requiring the purchase of a large amount of land.

A large diameter tunnel was used for Barcelonaâ€s line 9/10 project, where the tunnel is so big that two tracks and two platforms can be stacked above each-other, inside a single tunnel.

source

These arge tunnel can also house other necessary infrastructure: siding tracks to park trains at night, ramps so trains can cross over from one level to the other, evacuation paths, power substations — all items requiring space and cost.

Other projects used very large TBMs to build tunnels hosting six lanes of highways on two levels, plus emergency evacuation and ventilation, all inside a single tube (Madrid, Seattle). There are also water or sewer tunnels.

State Route 99 tunnel (source)

One interesting project in Kuala Lumpur, called â€œSMART Tunnelâ€, combines a four lane highway tunnel with a storm drain. During major storms, the road is closed and the whole tunnel is used to carry stormwater.

Other projects combine rail and road in one tunnel. In Wuhan, China, a twin-tube tunnel under the Yangze River, currently under construction, combines a highway on the upper deck with a metro line on the lower one.

Wuhan Metro line 7 tunnel (source)

The Vertical TBM

Letâ€s say youâ€ve built your metro line using a giant TBM, and installed platforms inside the tunnels — youâ€ll still need to access those stations from the surface. Traditionally, you would dig some access shafts. This may be slow, labor-intensive, and complicated if thereâ€s ground-water. But in the interesting new world of tunnel technology, thereâ€s a TBM for that: the â€œvertical shaft sinking machineâ€.

Vertical Shaft Sinking Machine (source)

Itâ€s a machine that consists of an excavator at the bottom of the tunnel that removes the earth, and machines at the top that build the tunnel lining rings that are being pushed down from above.

digging and adding rings (source)

The trick here is that rings are installed at the top of the shaft and then the whole shaft is pushed down. It leaves a lot of the complex technology at the surface. It also means you donâ€t end up with a big machine at the bottom, without an escape: most TBMs canâ€t go backwards because theyâ€re bigger than the tunnel theyâ€re building, so they need an opening on the other end to escape the underground (or be taken apart at the end).

At the bottom, the excavator can work under water, so the shaft can have the same ground-water level as the surrounding environment, until the desired depth is reached and the a concrete seal is poured at the bottom.

pouring the bottom seal (source)

With this machine it would be relatively simple to build access shafts for elevators, to access our hypothetical metro line.

The Diagonal TBM

We could now build our subway line deep underground inside giant tunnels, and vertical shafts down to provide elevator accesses. The thing is, if you want a lot of people to access your station, you need escalators, which move many more people per hour. This means we want tunnels to be neither vertical or horizontal, but built at the 30 degree angle of escalators.

In 1997, Saint-Petersburg opened an extension of its line 5, very deep underground. But one 102m deep station, Admiralteyskaya, wasnâ€t opened until more than a decade later, because they couldn’t figure out how to build a connection to the surface. For all this time, trains just ran through this ghost station but didnâ€t stop there, since there was no connection to the surface.

The problem was that there are a lot of museums and heritage buildings nearby and the ground is composed of a soft soil. The usual solution to freeze the ground and treat it like rock was deemed too risky, as the ground expansion from the freezing could damage the buildings (oh also, they ran out of money, and they had trouble finding a plot of land to use for the station).

In the end, they came up with a tunnel boring machine that digs at an angle. The machine takes away soil and immediately replaces it with a tunnel, minimizing movement of the ground. This allows digging without affecting the environment.

Side view of the TBM (source)

In a way, building tunnels barely more than 100m with a TBM seems crazy. Setting up a tunnel â€œfactoryâ€ only makes sense when you have a lot of tunnel to build. To make this economical, the TBM was made as re-usable as possible. Once the TBM reaches the bottom, most of it is disassembled and moved to the next site. The only thing that stays underground is the tunnel shield, the big protective metal sheath at the front of the TBM under which the tunnel lining is assembled – because itâ€s wider than the tunnel.

View down the angled shaft (source)

In the end, three angled tunnels were built, at lengths between 105m and 160m allowing three new stations to open. The Admiralteyskaya station opened in 2011, about 14 years after the line itself.

The Rectangular TBM

One issue with traditional TBMs is that they build tunnels with a circular cross section. But the internal cross-section of tunnels usually needs to be rectangular; generally we want a flat bottom, walls going straight up, with some relatively constant ceiling height.

If we use a circular TBM to build a tunnel, we have a bunch of wasted space on the sides. This can be especially an issue when space is at a premium, or if we want to build tunnels as close as possible to the surface.

This is especially true for underpasses, which have to be as close to the surface as possible and which also have a relatively small height (as little as 2.2m) but require a good amount of width (4m and more). Traditionally, these would be constructed using cut-and-cover: the road would be dug up, the tunnel placed in, and the road rebuilt on top. This can be a major disruption to the surface roads above.

To deal with all of these issues, some tunnelling technology companies have started to offer a new kind of tunnel boring machine: the rectangular TBM.

the rectangular TBM (source)

The idea, proposed by a German company but already built and used by a Chinese one, is to have a small rectangular digger. They can be used to build short, low-depth tunnels, in space-constrained environments, while minimizing surface impacts (which may also reduce costs).

A rectangular TBM digging an underpass (source)

Rather than including a facility for assembling the tunnel lining (out of multiple segments) inside the TBM, complete rings are inserted at the insertion shaft, and the whole tunnel is jacked forward one segment at a time.

source

This technology was used to build a metro access at the Havelock Metro Station in Singapore. The company hopes that this technology could be used one day to build whole stations.

A station built using this rectangular TBM concept could be very interesting: unlike the â€˜giantâ€ TBMs mentioned before, this technology could allow building stations close to the surface, in much more spatially constrained environments, and allowing a passenger platforms to be side-by-side rather than stacked.

Conclusion

When building transportation systems, constraints are usually about physics, geometry and cost, not the technology (see my criticism of the â€œGadgetbahnâ€).

I think that we have to be careful of primarily technology-based â€œsolutionsâ€ to transportation problems. Musk is trying to sell a quick-fix technology that in real life wonâ€t be able to escape geometry and physics. His approach makes little sense, his understanding of cities is poor â€¦ but also, his technology is boring.

On the other hand, technology can provide interesting tools to advance projects anchored in the real world, and push geometric, physical, time and cost constraints to its limits.

For more reading on tunnel technology, I recommend the website TunnelTalk, and the Tunneling Products Page of Herrenknecht, which I’ve both heavily linked in this article.

2017 in Review

2018-01-04T07:15:58Z

View of Montreal and Mont-Royal from the North. Note the Mont-Royal tunnel entrance below the center.

In 2017 for this blog, the big story continued to be the REM. Early in the year the BAPE (environmental consultation process) published their report, in which they concluded that at this time they can not recommend that this project should continue. I had been following that consultation closely, and wrote a long memoir and gave a presentation at the BAPE, which focussed on issues with the project and possible ways to address them (see 1-page synthesis map).

I also noted VIA Rail’s strange contribution to the consultations, where it appeared they were in favor of a project that will compromise their plans for an intercity rail network.

During the year, CDPQInfra continued undeterred and unwilling to address the problems identified in the consultations, backed by municipal and provincial governments whose highest priorities were that the project continue as fast as possible, at any cost. The provincial government even passed a law to override processes and construct an alternate reality in order to rush the project through.

One particular concern, besides the planning issues and CDPQInfra’s continuing misrepresentations of numbers and facts, is the privatization of important existing rail infrastructure. Late in the year I made an accounting of the value they will receive via the privatization of the Deux-Montagnes line and Mont-Royal tunnel, estimating that this will represent a subsidy worth about a billion dollars.

2017 and Me

On a personal level, I stopped working at Transit App in 2017. I had worked there for three and half years. Among other things, I developed an algorithm to automatically generate pretty transit maps. After moving on from my developer role there, I took some time off to go to Recurse Center in New York City, a sort of “writer’s retreat for programmers”.

During that time I kept getting dragged back to transit and transportation issues. For example I spent a lot of time to prepare for the previously mentioned Vendome Consultation.

That led me to think that I should focus my professional career more around transportation, and in the second half of 2017 I started an MBA in Sustainable Mobility at the Technische UniversitÃ¤t Berlin.

In 2018, I’ll spend about half my time in Berlin, and half the time in Montreal.

The “World’s First Solar Train” is in Reality a Battery Train

2017-12-31T22:26:13Z

This month, Australiaâ€s Byron Bay Railroad, a short tourist shuttle, started service. Itâ€s special, because it claims it’s a “world-first truly solar train”. I think itâ€s great that itâ€s a solar-powered train, but itâ€s actually even more exciting that itâ€s a battery-powered train.

Â© Byron Bay Railroad Company

The PR imagery shows that there are solar panels on top of the train, which makes it seem the 3-km shuttle powers itself via those roof-mounted panels. When I read their website more closely, I saw that actually itâ€s powered more by a battery bank. The battery bank is charged by the roof-mounted solar panels and by solar panels on the train storage shed.

This made me wonder — do the roof-mounted solar panels actually provide enough energy to power this train? To answer this question, I took a look at the numbers.

Every hour, the train may generate 6.5kWh, in theory, under ideal conditions (which is only possible at full sun and if the panels were all oriented towards it), but it requires 8kWh to make its round-trip. So even under ideal conditions, the roof solar panels donâ€t provide enough energy to power the train.

And thatâ€s despite running extremely slowly (25km/h), and standing still â…” of the time.

Byron Railroad Fact Sheet
Power of solar panels installed on the train:	6.5kW
Hourly round-trip Length:	6km
Energy use per hourly round-trip:	8kWh
Round-trip travel time:	20 minutes
Total Layover time:	40 minutes
Hours of operation:	7 hours

Capacity of battery On Train:	77kWh
Power of solar plant at station:	30kW

Effectively, the solar train concept is almost viable for the Byron Bay Railroad, because the train spends most of the time standing still. During all that time, the batteries will get charged by the sun, but it doesn’t have to spend energy too move.

But even then, there’s not enough power coming from the roof-mounted panels. Most of the actual power for this system comes from a small solar power plant installed at one of its stations. And the train has a battery thatâ€s large enough to keep the train running for almost 10 hours.

So the solar panels on top of the train act mostly as a kind of top-up, to reduce the number of times the train has to be plugged in during layover.

Solar power plant at station. Â© Byron Bay Railroad Company

Donâ€t get me wrong. This is an interesting concept. And unlike Indiaâ€s â€œfirst solar powered trainâ€ (that is really a train pulled by a diesel-locomotive, with solar panels that power the lighting and fans), most of the power for this train does come from solar — just not from panels installed on the train.

In some sense, the fact that this is a battery train is more interesting than being a solar train.

Trains powered by solar panels on the train are inherently not viable. If we covered Germany’s Highspeed trains completely in solar panels, and assuming Germany was actually a very sunny place, it would sill only be possible to generate 5% of the required power [1].

For San Franciscoâ€s BART transit system, which runs slower and thus uses less enenrgy, it would be possible to generate 10% of the required power via solar [2].

On the other hand, the battery concept is indeed very interesting. For the Byron Bay Railroad, a vintage diesel rail unit was converted to full electric operation, and one of the two diesel engines replaced by a bank of batteries (the other was kept for emergencies). What I see is that batteries may become viable to replace diesel engines in places where it is too expensive to install overhead electrification — as long as those stretches arenâ€t too long.

Traditionally, Batteries in trains didn’t work well — the vehicles and batteries were too heavy to make them work. Just like trucks are difficult to power with batteries compared to cars, due to weight.

So hats off to one of the worldâ€s few battery-powered trains, even if it wants to be known as a solar powered train.

Footnotes

[1] The ICE in Germany uses about 20kWh/km. It runs for about 0.5 million km per year. This means every train needs 10 million kWh of electricity per year.

Assuming a very sunny 1500kWh/m^2/year, and a power efficiency of 40% (that’s a lot), and assuming the whole train is covered in solar panels (about 2.5m*360m of panels are facing the sun at all times), this means the train solar panels will generate about 0.5 million kWh per year.

That’s 5% of the required energy.

[2] Some time back, BART had 669 cars requiring 300,453,720kWH/yr.

San Francisco has a solar insolation of about 1600kWh/m^2/year. Assuming each BART car is ~22m long, again about 40% of efficiency, every car would produce about 42MWh per year. The 669 cars would produce 28 million kWh per year, which is about a tenth of what’s needed.

Privatization of the Deux-Montagnes Line:How to Value a Transit Line?

2017-12-27T19:22:53Z

How do you make subsidized transit profitable overnight, without moving a single stone?
– By privatizing it, but not in the way youâ€re thinking.

During the BAPE consultations for the REM last year, I ran into Aref Salem, a city councillor who was a board member of the AMT (now RTM). He was quite in favour of the rail project: his riding is bisected by the Deux-Montagne commuter rail line, which will be replaced by the REM. He was also part of then-mayor Coderreâ€s administration.

When I expressed concerns about below-value privatization of the infrastructure of the Deux-Montagnes line, including the important Mont-Royal rail tunnel, he assured me: â€œthere will be a detailed accountingâ€.

Well, Quebecers are still waiting for that detailed accounting, which is starting to be urgent, since the project is still rapidly moving forward: in 2 months, the CDPQ hopes to announce the consortium who will build the REM.

How much will the CDPQ pay for the Deux-Montagne line?

CDPQInfra has repeatedly dodged the question of how much they will pay for the line. So far, there has been no clear answer, although they claimed they won’t receive subsidies via the line, and that they will pay â€œmarket valueâ€ – the market value of an asset being the price that can be obtained on an open and competitive market.

Itâ€s hard not to be cynical about this kind of statement, as there isnâ€t exactly an open â€œmarketâ€ for underground rail tunnels. There also isnâ€t any competition, for example in the form of a bidding process. Instead, the government has decided to transfer the Deux-Montagnes line to the CDPQ, just like that.

So how much will they pay for the line?

From the few numbers that are available, we know that:

the CDPQ planned to pay 585M$ for the â€œacquisition of the corridorâ€ (which includes the line), relocation of utilities and soil decontamination.
the responsibility for moving utilities and soil decontamination was apparently later shifted to the government of Quebec, which lists it as 180M$ in this budget note (see page 16)
Which leaves only 400M$ for all land acquisition. But the existing Deux-Montagnes line is only 30km out of the 67km required for the REM, so they canâ€t have counted more than a couple hundred million to buy it.

Although CDPQInfra hasnâ€t given explicit numbers on how much they expect to pay, they like to remind us that the AMT bought the line from CN in 2014 for only $97 million. As if to insinuate that the line is really only worth that much.

Weâ€re talking 100M$ for an electrified, rapid transit line that is 30km long, including a 5km tunnel. Am I the only one who thinks that seems just a little bit too low for a line that would surely cost billions to build today?

Yet we keep hearing that number, as if that was all the money weâ€ve ever put into the line.

Evaluating the actual value of infrastructure is not exactly a straightforward task. In this article, Iâ€ll be looking at:

How much money did we actually Invest in the line?
How much is the line worth on the RTMâ€s Books?
How much the land of the line is worth?
Business valuation using dividend discount model
How the ownership model moves infrastructure out of public control
The replacement value
Summary

How Much Money did we actually invest in the line?

It turns out that weâ€ve invested much more into the rail line over the last decades. Even the original construction of the line and the Mount-Royal tunnel a hundred years ago was actually paid by the public. The tunnel and line were built by the private Canadian Northern Railway, but the Federal government paid for it when the company was nationalized (aka bailed out) in 1918 in exchange for funds to repay construction debts.

Of course it probably doesnâ€t make sense to count investment from that far back, and the line didnâ€t see much investment in the 60s, 70s and 80s anyway.

However, there was major renovation starting in 1992. It cost about 300M$ to rebuild the overhead electrification infrastructure and buy new trains. After that, the AMT invested more money, most notably over the last couple of years.

To figure out how much in total, we can look at the three-year capital plans of the AMT. This document is published every year and contains not only a breakdown of funds the AMT hopes to spend on every project in the future, but also the total amounts spent in the past.

By looking at consecutive years and calculating the difference in the total amounts spent, it is possible to figure out how much money was actually spent every year:

Example: some capital plan entries for the Eastern Junction Grade separation project.
In any year, the AMT never really spent as much as they hoped beforehand.
Also, the total estimated budget keeps increasing.

Going through the capital plans since 1996 (I found 20 in total), and tracking every project related to the Deux-Montagnes line, I found that we spent the following:

Big Projects	733.3 M$
DM infrastructure rebuild (1993-1995)	168.0 M$
Trains – MR-90 acquisition (1994-1995)	130.0 M$
Acquisition from CN (2014)	97.0 M$
Jonction de l’Est (2011-2015, 100%)	50.6 M$
Reno Tunnel (2012-2017, 100%)	43.2 M$
Reno Tunnel (2018-2019, 100%)	50.2 M$
Centre Entretien P-St-Charles (2008-2017, 60%)	175.2 M$
Centre Entretien P-St-Charles (2018, 60%)	19.1 M$
Small Projects	152.5 M$
Trains – MR-90 improvement projects	19.7 M$
Parking lots	11.6 M$
Stations	3.0 M$
Infrastructure (tracks, signals, overhead,h etc)	20.2 M$
Studies	5.3 M$
Other Deux-Montagnes Projects	1.0 M$
Various Shared Projects	91.8 M$
TOTAL	885.8 M$

We find that even though we only bought the line 3 years ago for 97M$, the public invested about 886M$ in the line over the last 25 years. Even if we remove the trains (rolling stock) from the calculation (the RTM will likely keep them), that still leaves 736M$ invested [3]. If CDPQInfra takes control of the line, acting like a private entity, shouldnâ€t they reimburse us for these investments?

But it may not be so easy: The money invested may not ended up on the books of the RTM. Maybe we could check how much these investments are considered to be worth on the books.

How much is the line worth on the Books of the RTM?

When a company invests money into assets, these assets will show up on the balance sheet with their book value. The book value is basically the original cost of the asset, minus amortization. Amortization reduces the book value every year to account for the fact that assets may have a limited useful life (and may eventually become worthless and will need to be replaced).

The AMT has a very basic asset statement in their annual reports, which was broken down by line, but unfortunately only until 2008. Since then the AMT has become more secretive, and I wasn’t succesful trying to get this information via an access-of-information request. Either way, the data we have allows us to get an idea of the book value at least until 2008:

Book Value: Trains
	1997	2002	2005	2008	2017
Â Â Â cost	129.2 M$	129.2 M$	129.7 M$	?	?
Â Â Â amortization	?	27.5 M$	54.3 M$	?	?
Â Â Â net	?	105.0 M$	75.4 M$	?	?
Book Value: Land & Infrastructure
Â Â Â cost	87.6 M$	93.9 M$	95.5 M$	97.1 M$	?
Â Â Â amortization	?	50.8 M$	40.4 M$	29.9 M$	?
Â Â Â net	?	43.1 M$	55.1 M$	67.3 M$	?
Comparison: Land & Infrastructure Investment
Investment	171.0 M$	179.7 M$	1,837.3 M$	209.1 M$	666.9 M$

We see that the â€œCostâ€ of the Book value is lower than the money invested, and the amortization keeps reducing it further. Of the big renovation project in the early 90s, only the trains (about 130M$) ended up on the books in its entirety, whereas only half of the 168M$ infrastructure investment did – and was reduced to only a quarter within ten years by amortization!

By 2008, even though about $200M were invested in the line (excluding trains), the net book value was only about $67M. Since then, there has been much more investment into the infrastructure, and the line (land) was purchased for $97M.

If the book value has continued trailing the invested money as much as it did until 2008, my best guess is that the book value may be somewhere between $200M and $300M, maybe some more.

We see that, even though the AMT invested a lot of money, this is likely not reflected in the book value of the assets. Maybe it’s related to the AMT investing in infrastructure that was owned by CN, a private entity. Since the AMT/RTM isnt’t a private company, and they don’t pay taxes, this doesn’t really matter.

But it does matter when we want to privatize their assets: It is quite possible that the CDPQ hopes to pay exactly this low book value for the Deux-Montagnes line, as the estimates seem somewhat similar. It also matches Aref Salem’s assurance that â€œthere will be a detailed accountingâ€.

A further problem is that the book value is not representative of the market value anyway. The book value is really just a tool used in accounting and taxation. And in the case of the Deux-Montagnes line and the AMT, it seems to be much less than the money we invested.

In general, most businesses are actually worth much more than their book value. This is because in a business, the assets come together to create a more valuable whole, which keeps increasing in value over time as well, whereas the book-value is always going down!

For comparison, utility companies are worth about 3x more than their book value on average, meaning the the Deux-Montagnes line, if considered like a utility company, could be worth $600M – $900M (assuming the book value isn’t an under-estimate).

The raw book value, while higher than the $97 million acquisition, still seems rather low. To see that, letâ€s compare it to the value of the land alone.

The Land Value

We can actually make a good estimate of the value of the land the line is on. For any building, we can go to the assessment roll, plug in its address (or lot number) and find the municipal valuation. Itâ€s not quite a market valuation, as it is only used for tax purposes, but it gives a pretty good idea. If youâ€ve ever bought or sold a house, you know that municipal valuation is often much lower than the selling price of the property.

It turns out that almost every piece of land is in the assessment role, including public land.

Lots belonging to the Deux-Montagnes line can be found by collecting them with infolot.
This image shows the lot just outside of the Northern Mont-Royal Tunnel portal.

I have collected a list of lots belonging to the Deux-Montagnes line in Montreal, Laval, and Deux-Montagnes, and tallied their municipal valuations in a spreadsheet. Hereâ€s the summary:

Land Valuation – excludes tunnel, infrastructure, rolling stock
Property value	238,760,007 $
Building value	2,932,400 $
Land value (property minus building)	235,827,607 $
Terrain area (square-metres)	1,149,038
Value per square-metre	205 $
Number of roll entries	55

The actual value of the Deux-Montagnes line is much higher, since:

Some lots are valued at only 1$ (maybe because the AMT/RTM doesnâ€t have to pay taxes anyway).
The list only includes the lots that I could find, there may be some missing.
Itâ€s not a market valuation of the land, as previously mentioned.
The building values (the values of whatâ€s build on top of the land) are very low — which means the valuations effectively only include the value of the land, it doesnâ€t include the infrastructure (rail + electricity supply + parking lots).
It doesnâ€t include the trains, the Mont-Royal tunnel, or the downtown connection.

Even so, the municipal valuation of just the land itself is similar to what I estimated for the book value.

Clearly the market value of the line must be much higher than that, given all the infrastructure that is on it. But how do we make a more rigorous and accurate estimate, based on accounting principles, thatâ€s not just a guess?

Business valuation – the Value of the Contract

One key element is that the REM is a business. Its goal is to make money by operating the transit line. And unlike what the news have been saying, the profits wonâ€t come from ticket sales, but from the per-passenger subsidy paid by the ATM, which is guaranteed in the contract between the CDPQ and the ARTM.

This is how it works: the ARTM will collect the fares, and pay CDPQ Infra a fixed price of 70 to 71 cents per passenger-kilometre, which is actually more than what it costs to run the line today (30cents)!

People like to think that privatization is a good way to increase cost efficiency, and REM proponents like to suggest that it will be profitable because of automation, but this is simply false. The REM will be profitable because of the Contract, and the subsidies granted by it.

So how do you make subsidized transit profitable overnight, without moving a single stone?
— By privatizing it and over-subsidizing it, and suddenly the subsidies are called â€œprofitsâ€!

If you think about it further, without even building the REM, if the Caisse just keeps running the Deux-Montagnes line as it is run today, the line will suddenly become profitable!

And if you have a bit more imagination, the CDPQ could take ownership of the line, contract the operations back to the RTM and STILL make millions in profit every year without doing anything!

But back to our valuation: the fact that the Deux-Montagnes line will be a profitable business, thanks to the large amounts of subsidies, allows us to use a simple business valuation method usually used for valuing companies on the stock market (i.e. for stock valuation), the dividend discount model.

This method is used for dividend-paying companies, which pay out their profits to shareholders instead of investing into growth, and thus have relatively little growth. The REM fits this category. The idea behind the dividend discount model is that a company is worth the sum of all future dividend payments, adjusted back to their present value.

In simplistic terms, it says if a company pays 5$ in dividends each year, and you believe that a company with that risk profile should yield 5% every year, that the company should be worth 100$ (meaning you will make back your initial investment in 20 years). If thereâ€s an expectation that the dividends will increase, than company should be worth some more.

The valuation will depend on:

The expected profits
The expected growth in profits
The target return rate (i.e. annual return on investment)

The target return rate depends on how risky your investment is: you want more return on more risky investments. As a comparison, bonds, which are one of the safest forms of investment, typically only return 2 to 3%, whereas the overall stock market returns about 5 to 6%. Riskier investments require much higher returns to make financial sense.

In the case of the Deux-Montagnes line, the risk is pretty low. The ridership is already established (based on population) and has been consistent for many years. In fact thereâ€s pent-up demand that the line cannot serve. Furthermore, thereâ€s language in the agreements/laws with the CDPQ that public transit agencies are not allowed to establish competing transit services, which basically grants the REM a cushy monopoly!

In fact the only risk for the line is operational (can we continue operating the line at the current cost without major issues?). It is quite reasonable for a company like that to have a return of 5%-6%. This is also similar to Canadian funds of dividend-paying companies, which have total returns in the 5-6% range (but tend to have higher risks because they are businesses that need to compete with others).

For the growth, letâ€s just assume thereâ€s no ridership growth whatsoever, and simply assume that income, cost and thus profits will rise with inflation, about 2%.

To figure out the profit, we need to deduct the operating cost (30c/passenger-km) and the capital costs from the subsidy per passenger-km (70c/passenger-km), and multiply that by the total number of passenger-km per year (140 million km).

To complete the equation, we need to find the capital costs. During the last 25 years, the public invested about 25M$ per year in the line, mostly for the renovations in the early 90s and further investments in recent years. These were done to significantly increase ridership. If we are only interested in keeping the infrastructure in a good state of repair (and replace the trains every 40 years), we only need 15M$ per year, as a sort of steady-state capital cost.

To go back forth between the cost per passenger-km and the total cost, we simply have to multiply or divide by the total number of annual passenger-km on the line, 140 million km.

	$/passenger-km	total $
operating cost	0.30 $	42,000,000 $
steady-state capital costs	0.11 $	15,000,000 $
revenue (subsidies)	0.70 $	98,000,000 $
profits	0.29 $	41,000,000 $

Applying the dividend discount model, we get the following valuations:

target annual rate of return	5%	6%
profit / year	41,000,000 $	41,000,000 $
profit growth per year	2%	2%
Valuation	1,366,666,667 $	1,025,000,000 $

Business valuation – With some Investment to Increase Ridership

One thing to consider is that thereâ€s a lot of pent up demand on the line that cannot be met because the capacity of the line is too low today. Investments in recent years were aimed at providing more service to catch all that potential ridership, but thereâ€s been no increase in service yet. So even a small additional investment, like 200M$, could get a ridership increase of 25% [1]. This changes the valuation as follows:

target annual return rate	5%	6%
profit / year	41,000,000 $	41,000,000 $
growth per year	2%	2%
one-time investment	200,000,000 $	200,000,000 $
one-time ridership growth	25%	25%
valuation	1,508,333,333 $	1,081,250,000 $

This business valuation indicates the Deux-Montagnes line and Mont-Royal tunnel may be worth $1.2B. A transfer to the of the assets to the REM for some hundred(s) of million would then be a subsidy of a cool billion dollars.

So why should we care? – The Ownership Model of the REM

The REM markets itself as a â€œpublic-public partnershipâ€. Since the RTM (former AMT) is a public agency, and the CDPQ is a crown corporation, who cares who owns what. Who cares about subsidies, isnâ€t it just a case of moving money from the left pocket to the right pocket?

Exceptâ€¦ thatâ€s not actually quite true: when the RTM owns the infrastructure, itâ€s both under control and ownership of the government. Once itâ€s transferred to the Caisse, it wonâ€t be owned by the public anymore.

Today, if we want to transfer infrastructure between different government agencies, then only the government needs to agree. For example, the AMT built the Laval Metro extension. After it was finished in 2007, the assets were transferred to STM. The government owned the AMT, the government owned the STM [4], deal is done, thank you, goodbye.

So how is it different if we transfer assets to CDPQInfra? Because CDPQInfra is not owned by the Caisse de DÃ©pÃ´t; it is part of the assets that are managed by the Caisse de DÃ©pÃ´t. And these assets belong to the Caisseâ€s depositors: Government employeesâ€ pension funds (62%), Retraite QuÃ©bec/QuÃ©bec Pension Plan (23%) and others.

Itâ€s the same principle as your personal investments: you have an investment portfolio (RRSP, for example) that is being managed by a financial institution (letâ€s say Desjardins). Your portfolio may contain shares of Bombardier. Desjardins manages your money, but ultimately you are the owner of these Bombardier shares.

The diagram below shows the ownership structure of the Deux-Montagnes line before and after the REM. As you can see, under the REM, if you start at the Deux-Montagnes line and go up the ownership chain (green arrows), you end up with the Depositors of the Caisse, 62% of which are the pension funds of government employees, and only 23% belong to QuÃ©becâ€s pension plan, the proverbial â€œbas de laineâ€ everyone talks about.

But ownership is only half the story, and if this was the only problem, I would have given up a long time ago and just accepted that weâ€re making a very strange deal.

The real problem, the bigger problem, for anyone who cares about the future of transit in MontrÃ©al and mobility in the whole province, is control of our infrastructure.

If you go up the control/management chain (blue lines) in the chart above, you see that it ends at the Caisse de DÃ©pÃ´t. Moreover, the Government of QuÃ©bec explicitly states that it gives up all control to the Caisse.

Losing control of the infrastructure means losing the ability to determine how it will be used: The Deux-Montagnes line includes the Mont-Royal tunnel, which many transit lines need to use to reach downtown. But after privatization, the line will not only have a lower capacity, but half the lines that need to use it will be cut off from direct access downtown, maybe forever.

Also, while in the rest of the world, public-private partnerships have private corporations build new infrastructure that are eventually given back to the public, our innovative public-public partnership privatizes already-built public infrastructure, without reverting back to the public, and with no chance of ever getting it back.

Transferring it back under public control would effectively expropriate the pension funds who own the assets, while breaking contracts and laws in the process. Essentially, getting our transit line back may require an act of communism.

Of course we could maybe buy it back from the Caisseâ€¦ I wonder how much they charge for a 30-km line with 5 km of tunnel, which happens to be the only access to downtown Montreal? When the government must negotiate at arms length, and has very little leverage. Do you think theyâ€d let it go for $100M?

But maybe Iâ€m concerned for nothing. After all, Iâ€ve raised the issue with politicians and other proponents of the REM, and the attitude Iâ€m getting is a dismissive â€œweâ€ll just build another tunnelâ€. Piece of cake.

This brings up a new kind of valuation — how much would the Deux-Montagnes line cost if we built it from scratch?

Replacement Value

To get an idea how much the line would cost as a hole, we can make a simple comparative analysis. We can break down the line into the surface section (25km) and the tunnel section (5km), and make an estimate by comparing to various per-km costs.

We could compare the Mount-Royal tunnel to various other comparable, recently built rail tunnels (ones with no stations inside the tunnels), but this will not account for the downtown connection. A lot of the value of the Mount-Royal tunnel is the fact that it directly connects to Gare Centrale.

If we built a new tunnel, it would be very difficult to make a new connection to Gare Centrale — there are buildings in the way! Plus, the REM will use up a lot of space of the station.

This means weâ€d either have very complicated and very expensive construction to make the connection; we could purchase expensive buildings and tear them down; or build a new underground central station. Either way it’s going to be very expensive. This is where a lot of the cost of a new Mount-Royal tunnel would come from.

Deux-Montagnes Line Replacement Cost
item	cost	length	item cost
25km of surface rail	70 M$/km	25km	1,875 M$
5km Mont Royal Tunnel	140 M$/km	5.4km	756 M$
Downtown tunnel Station / Access	350 M$	–	350 M$
TOTAL			2,981 M$

We see the Mont-Royal tunnel adds up to a cool billion, and the surface part to almost two. The Mont-Royal tunnel is the most likely part that will need replacing, and again weâ€re coming up with a billion dollar figure.

Summary

Weâ€ve looked at various ways to grasp the value of the Deux-Montagnes line and Mont-Royal tunnel, and made a comparison to how much CDPQInfra will pay to privatize it.

type of valuation	valuation amount (M$)
What CDPQ may pay	100-200?
Book Value Note: estimate based on continuing 2008 book value	200-300?
Municipal assessment of Land Note: excludes tunnel, infrastructure, downtown access, parking, trains – and it’s a below-market, municipal valuation	236
Total Investment excluding trains	736
Total Investment including trains	886
Business Valuation (dividend discount model)	1000-1400
Business Valuation assuming small improvement	1100-1500
Replacement Value of whole line	3000
Replacement Value of Mont-Royal Tunnel only	1100

In my opinion, we should get reimbursed about a billion dollars, maybe a bit more, in exchange for transferring the assets of the transit line, losing control of the infrastructure forever, and giving CDPQinfra an operating contract that would make them profit from day one. Anything else would be a large subsidy, and completely inappropriate to give, without bidding process, to a company acting like a private, commercial entity.

The Deux-Montagnes line is an essential puzzle piece in the creative accounting at work that will create a profitable transit line owned by a private entity — and I worry the public will be “taken for a ride”.

Footnotes

[1] The estimate that 200M$ investment will allow a 25% ridership increase comes from the 2005 annual report of the AMT.

â€œAn estimated $173.9 million is recommended to increase the lineâ€s capacity in order to accommodate the ridership estimated at over 40,000 passengers a day. The work includes the grade separation of the East junction, double railway tracks between Bois-Franc and Roxboro, the addition of two stations and the purchase of 22 new cars.â€

Note the current ridership is 30,000 passengers per day.

The Eastern junction project was completed (for about 60M$), the 22 rail-cars where purchased but allocated to different rail lines, the double tracking is still outstanding. Itâ€s reasonable to assume that the double-tracking and purchase of new rail cars will now cost 200M$.

[2] To arrive at the estimate of 70 M$/km for surface rail construction and 120 M$/km for tunnel construction (for a tunnel without stations), I used the following comparative projects:

Comparative tunnel costs
project	length	location	opening year	cost	inflation- adjusted in CAD	cost per km (CAD)
Mount-Royal tunnel	5.0km	Montreal	1918	10 M$	145M	29 M$
2nd Hudson-Tunnel	3.7km	New York	2026?	11.1B USD	14.3B	3,865 M$
Barcelona AVE tunnel	5.8km	Barcelona	2013	179.3M â‚¬	277M	48 M$
East Side Access, only Manhattan tunnel contracts	3.8km	New York	2023	415M USD	535M	141 M$
Crossrail, only tunnel contracts	21km	London	2019	1.5B Â£	2.6B	124 M$
Fildertunnel	9.5km	Stuttgart	2021	754M â‚¬	1142M	120 M$
Tunnel ObertÃ¼rkheim	5.7km	Stuttgart	2021	350M â‚¬	530M	93 M$

Comparative Surface costs
project	length	location	opening year	cost	inflation- adjusted in CAD	cost per km (CAD)
Eagle PPP electric surface commuter rail (A-line)	54.7km	Denver	2016	2.2B USD	2.83B CAD	52 M$
REM St-Anne Branch	16.8km	Montreal	2021?	1400M CAD	1400M CAD	83 M$
REM Rive-Sud (includes tunnel)	15km	Montreal	2021?	1730M CAD	1730M CAD	115 M$

In order to calculate the costs of the individual branches of the REM, I distributed the the estimated construction costs from this document as follows:

REM Branches Breakdown
branch	length km	infra-structure cost	system & rolling stock cost	parking / terminus cost	acquisition cost (approx.)	total cost
St-Anne-de-Bellevue Branch	17 km	680 M$	446 M$	125 M$	147 M$	1 398 M$
Deux-Montagnes line incl. tunnel (upgrades)	31 km	820 M$	810 M$	–	266 M$	1 897 M$
South-Shore Branch	15 km	1 090 M$	399 M$	110 M$	131 M$	1 729 M$
Airport Branch	5 km	320 M$	125 M$	–	41 M$	486 M$
Â TOTAL	67 km	2 910 M$	1 780 M$	235 M$	585 M$	5 510 M$

[3] 885.8M$ (total) – 130M$ (MR-90 acquisition) – 19.7M$ (MR-90 improvements) = 736M$

[4]The STM is actually owned by the city of Montreal, not the government of Quebec – but being a public body regulated by the government and existing because of a Quebec law. Arguably, the city of Montreal is owned by the government of Quebec.

Whatâ€™s a Gadgetbahn?

2018-01-12T15:58:08Z

For some time, Iâ€ve been meaning to write about German transportation systems like whatâ€s an S-Bahn or whatâ€s a Stadtbahn.

With the recent news out of Quebec, I figured Iâ€d instead talk about a transportation concept that doesnâ€t actually transport anybody at all: the Gadgetbahn.

The word is a portemanteau of the English â€œGadgetâ€ and the German word â€œbahnâ€, which means rail or train. A gadgetbahn is a speculative transportation concept that proposes to solve planning and financial issues via some sort of magical techno-fix, likely some technology that doesnâ€t even exist yet.

Classic examples of gadgetbahns are: monorails, â€œpersonal rapid transitâ€, maglevs, or the newest addition to the family, the â€œhyperloopâ€.

Proponents of these technologies may be referred to as gadgetbahn enthusiasts, or more derogatorily, â€œpod-peopleâ€. They often promise the sky in terms of reduced cost and increased speed and comfort, often with little consideration for capacity, risk, safety or realism.

Back to Â Quebec: the prime minister decided he wants a fast transit link between Montreal and Quebec City, but not a train, because â€œwe can do much more modern things nowâ€.

Instead, he wants something â€œfuturisticâ€, something from the minds of Quebecers. (note from editor: Sorry to pop his bubble, but Quebec is not exactly known for having a long history on the bleeding edge of transit technology.)

The problem of the gadgetbahn isnâ€t necessarily that itâ€s a techno-fix. Itâ€s that it is a technology for the sake of technology, a shiny gizmo to brag about, with little regard to solving the actual transportation problem.

The transportation minister clarified his position himself: he wants anything you can conceive of, any project; innovate, come up with new ideas!

And somehow, some consortium sprung up ready with proposals, renderings, promises and deadlines to build a high speed monorail (â€œMGVâ€), and all they want is a quarter of a billion dollars to develop it.

Cost, Speed, Comfort
– The problem is geometry, physics and the Right of Way

The beauty of proposing a gadgetbahn is that since it doesnâ€t exist, proponents can make up all sorts of quasi-magical properties for their technology, which supposedly make it superior. Since there arenâ€t real-world examples, proponents can use the most optimistic theoretical scenarios they can come up with, and compare them with the actual performance of projects that have been built and which are bound to the constraints of the real world.

For example, the high speed monorail promoters claim their system is cheaper than conventional rail, because they could just use existing highway medians, with an elevated rail system where vehicles are suspended from above.

The “MGV” (monorail a grande vitesse), high-speed pods on elevated tracks, suspended from above

When you look at its basic structure, compared to conventional rail, this monorail essentially differs in the method of propulsion: instead of two wheels on two rails below the train, we have two wheels on one rail above the train.

The main conceptual difference between conventional rail and â€˜MGVâ€:
the location of the wheels

Like for any gadgetbahn, the claim is that this new technology provides more speed, more comfort at lower cost.

But in the real world, these three aspects are always intricately connected and subject to tradeoffs – due to simple geometry and physics.

Want faster transportation? Then you need very straight tracks. Donâ€t have straight tracks but still want high speed? Then your trip will become a barf-ride, so less comfort. Â Want to build cheaply in an already existing highway median? Well the highway curves are made for cars going at 100km/h, so your choices are:

slow down (less speed),
run inside the existing geometry at higher speed (less comfort),
straighten the curves (more expensive).

These problems will always come together. At the end of the day, youâ€re still pushing a metal can full of people at high speeds you canâ€t get out of issues of geometry and physics by changing where you put the wheels.

Going further, once it appears the basic problems have been overcome, the next issues become capacity, safety, energy and access (stations).

For example, Elon Musk is proposing to build tunnels with his â€œBoring Companyâ€, which will supposedly be cheap, because the tunnels will be relatively narrow. This reduces capacity, because only smaller vehicles will fit in the tunnel. To compensate, he may propose that vehicles will run super close together – which will represent a huge safety issue unless they run slowly. A small tunnel with a lot of vehicles that are barely smaller than the tunnel diameter, running at high speed may become a death trap in case of emergency, if there isnâ€t enough space and facilities for egress. If somehow he manages to solve all these issues, thereâ€s still the problem of getting everybody into this tube of his.

All these considerations come down to the one fundamental constraint on which everything else depends: the right of way — how much space do you have available, how straight is your path, how and where is the downtown access, and how much space is available at stations.

The Maglev

An example of this issue is the maglev technology (essentially magnetically elevated monorails). The concept has been around for ages. The Germans and Japanese have been developing the technologies for a long time. In the early 2000s, the Germans were able to sell their Transrapid technology to China for the Shanghai Maglev airport connector, a 30-km line. It was a pilot project, with the hope to eventually cover the whole country with maglev network.

The Maglev was seen as the next generation of trains, mostly by being faster. But there was also the hope that it could even be cheaper, by putting the whole track on stilts, without having large elevated bridge-like structures. But in the end, conventional high speed rail and maglev require similar geometries, a similar kind of infrastructure, and it turns out that the speeds are not that different (Shanghai Maglev up to 430km/h, conventional rail up to 350km/h, both with a maximum experimental speed of around 600km/h).

At more than 300km/h, a lot of energy is spent to overcome the air drag of the trains themselves. Issues also become noise, and the required straightness of the infrastructure. And the issue that with stops, decreasing travel time by increasing maximum speeds becomes marginal. Overall, speeds above 300km/h tend to become uneconomical, no matter the propulsion system.

From a distance, elevated conventional high speed rail (left) and maglev (right) appear strangely similar – the requirements on the tracks are due to physics and geometry, so the propulsion method alone wonâ€t give one system a clear advantage over the other in terms of infrastructure cost

All of these issues come together to make the technological choice a bit of a wash.

In the end it makes more economic sense to build from conventional technology which has been developed for a longer time, has multiple vendors, has existing infrastructure that can be built on top of. This way, you can upgrade lines for high speed service, while being able to run the new high speed trains on existing tracks inside cities or to other cities. This provides a huge economic advantage.

So indeed, although the Shanghai Maglev works, in an economic sense itâ€s a failure. It convinced the Chinese to focus on high speed rail: ten years after the opening of the Maglev, the country still had the same 30km of maglev, but built 20,000km of high speed rail.

(Oh and btw, Iâ€ve taken the maglev, itâ€s not a very smooth ride; it rumbles like a rollercoaster)

The Real Issue: Economics

The real issue of using a gadgetbahn to solve a transportation problem is not really technical. Itâ€s that it re-frames the problem to build an infrastructure as the problem to develop a new technology — now youâ€ve got two problems to solve!

The technical problem should really be solved through private investment, not public funding. Thus I view the â€˜offerâ€ to develop the â€œhigh speed mono-railâ€ for â€œonlyâ€ 250M$ with a great amount of distrust. If the idea is viable and the people behind it are competent, it should have attracted private investment, as there should be a potential to make profit selling the technology. After all, the proposal has been around for 23 years.

When proposing a completely new technology in order to solve a specific transportation problem, the major problem is Risk:

Technological risks: Will it even work? Will it deliver on claims? Will it have sufficient capacity?
Cost-related risks: How much will it cost to develop? How much will one kilometre cost once the technology developed?
Regulatory/safety risks: Will it be safe? What will safety requirements be? How fast will we be allowed to run?
Risks because timelines are not understood: How long will it take to develop? How long will it take to plan & construct?
Operating Risks: How much will it cost to operate? How much will it cost to maintain the infrastructure? Will automated/unattended operation actually be possible?
Risks because we need to build complete systems at once, rather than incrementally updating existing infrastructure.
Also, new technology means relying on a single vendor, which is again extremely risky, both in terms of cost and availability of the technology in the future: Will the vendor exist in the future? How much will they charge us once we depend on them, given the lack of competition?

For any technology thatâ€s already existed and been researched for decades, and that may have tens of thousands or hundreds of thousands of kilometers of infrastructure built today, all these question are much easier to answer. There will be much less risk, and thus less cost.

Be distrustful of Gadgetbahn Concepts

Any time somebody in power proposes to solve an infrastructure problem by first developing some new technology, or by using some proposed technology that hasnâ€t been delployed yet, we should be distrustful.

Often, the proposal may simply be an excuse to not invest in infrastructure today, because tomorrow some techno-fix will come along and solve all our problems â€˜for freeâ€. This tactic may work especially well if the proposal includes an appeal to some futuristic dream or a nationalistic project.

The gadgetbahn may really just be a big diversion. For example in Quebec, the most realistic scenario to get a fast link between Montreal and Quebec is the â€œhigh-frequency trainâ€ proposed by VIA rail, which would link the cities with conventional rail. After repeatedly proposing high speed rail for the last 40 years and getting no support from the governments, VIA decided to propose a system thatâ€s not true high speed rail – but it would use dedicated passenger rail tracks, allowing somewhat faster speed than today, and no interference with freight.

This would hit an economic sweet spot for VIA, allowing them to almost finance and build the system themselves, with only relatively little public support.

But the main problem is the access to Montreal – VIA hoped to use the Mont-Royal rail tunnel to access Gare Centrale. But with the REM light rail project pushed hard by the prime minister, the tunnel would be converted to light rail, an incompatible technology, which will cut VIA off. In some sense, the prime ministerâ€s announcement that he wants some gadgetbahn to Quebec City means VIAs rail project would become obsolete, and the conflict would become moot.

So is it really just a diversionary tactic to hide the regional rail planning problems in Montreal?

Interesting related reading (and with thanks for some inspirations) by Alon Levy:
“Loopy Ideas Are Fine, If Youâ€re an Entrepreneur”

Barcelonaâ€™s Line 9 – Inspiring Montrealâ€™s Pink Line

2017-10-31T13:13:51Z

Why do we care about Barcelona anyway?

During the current electoral campaign in Montreal, ValÃ©rie Plante (Projet MontrÃ©al) proposed to build a new metro line, the Pink line, which would run diagonally from MontrÃ©al-Nord to downtown.

The Pink line is actually inspired by Barcelonaâ€s Line 9, both in terms of construction method and in some of the way it is planned to maximize its usefulness by connecting to neighborhoods, and not following the street grid by running deep underground.

A quick word about costs

Projet MontrÃ©al estimates the Pink line to cost $6 billion, a number that cynical Montrealers were quick to dismiss. Incumbent Mayor Coderre first claimed it would cost $10 billion, now heâ€s trying to convince us it will be more like $25 billion. The scare tactic seems to resonate with budget-weary Quebecers who have seen their fair share of cost overruns on infrastructure projects. After all, the Orange line extension ended up costing more than projected, right?

However, if we actually look at the numbers, we realize that $6 billion means $200 million per kilometre overall. Or, considering that a quarter of the line would be overground, about 250$ million per km for the underground sections.

Compare that to the Orange Line extension, which ended up costing $143M/km and which was, puts it in response to the mayors outrageous cost claims: â€œWeâ€re proposing a metro line, not a space programâ€.

Projet Montrealâ€s Sylvain Ouellet presenting the Pink Line concept (source)

In their presentation of the Pink Line, Projet Montreal referred to the concept of the Barcelona Line 9 as an example to show its technical and financial feasibility.

Barcelonaâ€s Line 9 – The Longest Subway Line in Europe

Barcelonaâ€s Line 9 (pdf), currently under construction, is a very interesting for many reasons:

It will be the longest metro line in Europe, with 48 km in total
The metro line will be completely automated
The construction is based on the idea of a single 12-metre wide tunnel, large enough to hold 2 tracks (plus platform) on two levels
The stations are nearly completely enclosed inside the envelope of the tunnel
Despite the high complexity of the line, the overall cost is quite reasonable

source

The metro line is almost completely contained in this single tunnel, which is wide enough to host other infrastructure: extra tracks to park trains at night, ramps to connect between the two directions, and facilities for egress and other equipment.

The tunnels are built using a giant tunnel boring machine (TBM). A TBM is a kind of tunnel-building factory. It will dig a tunnel and install itâ€s supprting walls at a rate of about 100 meters per week (page 9).

The two phases of tunneling: pushing forward & installing the tunnel lining (check out the full video here)

Over the years, the TBM technology has improved a lot. Even at this size, machines are standard and surprisingly affordable.

A Single Shaft for Each Station

At the stations, round pits, 25m in diameter connect the surface to the tunnel below.

Station access column

This station access column includes several elevators, which provide access to an intermediate level between the two metro platforms. Thereâ€s also an elevator that provides level wheelchair access to both underground platforms, and a set of emergency stairs.

This means that at ground level, the impact of building stations is small – basically only the round 25m pits – so they can be built at locations that will maximize the nearby population or connections to other lines.

Line 9 station construction pits

As for the tunnels, they run pretty deep, below all other infrastructure, which means they can go basically anywhere without disturbing existing structures and easily reach the stations, wherever they are built.

Connection between station pit and tunnel

This technology allows for a lot of flexibility in the location of stations, so city planners can focus on serving the population along the line, providing adequate transfers and optimizing the line to relieve the traffic on other, congested, metro lines.

Branching!

The Barcelona Line 9 project actually consists of two lines, Line 9 and Line 10, with a shared downtown section.

Barcelona’s line 9 and line 10, which form the line 9 project (source)

This type of design allows more population to be served on the outskirts, while providing more frequency on the shared trunk section (which, being downtown, is also more expensive to build, so it makes sense to share the tracks). Of course, the frequency of service is lower on the outer branches, but having automated lines means there will be a train every 2 minutes (!) on the downtown section, and every 4 minutes on the branches.

Branching point South of Gornal station, upper level. Since trains are on two levels, the branching connection is very easy: you donâ€t need flyovers to cross oncoming traffic (video source)

Without branching, i.e. merging multiple outlying lines into a single one downtown, it would be necessary to build multiple, nearly parallel downtown lines, if all the outlying lines are to have a direct connection downtown. Each of those would require less carrying capacity compared to a single line combining the branches. But overall, itâ€s much cheaper to increase the capacity on a line (i.e. by using 90m trains instead of 45m trains), compared to building multiple downtown sections.

Several construction methods

The Barcelona Line 9 doesnâ€t use the 12m diameter stacked tunnel along its whole route. Some sections are built using different construction methods, presumably because they are cheaper. This mostly depends on the local geography and available space.

The map below shows the different construction methods used along the 9 and 10 lines:

The different construction methods of the Barcelona Line 9

We can see that while the dense inner city segments use the large diameter tunnel, some outside areas use a smaller tunnel with two side platforms, excavated from above. There are also some short mined sections and sections built using cut-and-cover. Lastly, on a suburban branch, about 4km of the line were built above-ground on a viaduct.

Profile view of tunnels constructed with different methods

Planning and optimising for network effects

When constructing such a large infrastructure project, you have to consider it within the larger transit network. It appears that the Barcelona Line 9 is not just planned as an isolated line, but as a component of the overall network, with 20 of the 32 stations having transfers to other lines.

One interesting aspect is the integration with the area around the large Segrera station, a new, large, mostly underground station complex where metro lines, regional trains and long distance trains meet. Around this area, the L9/L10 is running parallel with an extension of the L4.

The central section of L9/L10, currently under construction, with several transfer stations. Note the short extension of L4 (bottom right) to complete the network around the La Sagrera station project.

At the Sagrera station, the L9/L10 lines have a cross-platform transfer situation (similar to Lionel-Groulx in Montreal). This allows fast transfers, while reducing cost (compared to building two separate stations), by sharing infrastructure and being built at the same time.

The La Sagrera station. Note how the metro station at the bottom left is designed fors cross-platform transfers between L4 and L9/L10. (source)

Interesting safety concept

One thing I find interesting is the metro lineâ€s approach to safety. Nowadays, many subway lines are constructed using two tunnels, one for every direction. Using frequent cross-passages, one tunnel can act as the emergency exit for the other one.

By having two levels separated by a ceiling, the two levels of the Barcelona Line 9 actually act as two separate tunnels for emergency purposes – despite being initially dug as a single tunnel.

So you get the advantage of the cost reduction of using a single tunnel, together with the safety advantage of two separate tunnels. This also means that frequent emergency exits to the surface are not necessary, as required when using a single undivided tunnel.

Tunnel section with a track ramp connecting the two levels/two directions. Notice the lack of emergency walkways next to the track.

One interesting thing to notice is that there isnâ€t much space for walkways inside the tunnels. In the image above, thereâ€s no place to walk between the center wall and the train.

It appears that the tracks themselves must be used as the evacuation passage. Itâ€s helpful to build the tracks on concrete slabs without any ties – providing a mostly smooth surface to walk on.

Also note the use of an overhead power to provide electricity. This is unusual for a metro, especially one which is so space-constrained: metros generally use a third rail on the ground to provide power to the trains, and overhead wires are used for more spacious main line tracks.

By using an overhead rail instead of overhead wires, the power supply is much more compact. Using the overhead power has the advantage that there are no open high voltage power lines on the ground. During any evacuation situation, thereâ€s no worry anybody will accidentally step somewhere they shouldnâ€t and get electrocuted.

An interesting innovation is the use of long ramps in the front and back of the metro trains (pdf) that can be used in emergencies, even by wheelchairs. It allows passengers to evacuate via the front and back, so tunnels can have a very small profile and still be safe.

The emergency ramp of the Barcelona Series 9000

Itâ€s interesting to have this integrated safety concept. It combines the single large diameter tunnel, overhead wires, smooth track areas and ramps on trains into a single package.

Some concerns

Having stations so deep underground is a great way to avoid having to deal with all the infrastructure already in place in a city, but it also means you have to go pretty far down to reach the metro. Even with fast elevators, this can take time.

With great depth comes great access time

Preferably, stations should be built as close to the surface as possible, to minimize the time it takes to get to the train.

Relatedly, by only providing a single access, the area that lies within walking distance is smaller, compared to having two access points, one at each end of the station.

Again, if stations are less deep, accesses are cheaper to build, and it will possible to build two of them. Any line should always attempt to stay as close to the surface as possible (for Montrealâ€s Pink Line, these great depths donâ€t seem to be necessary, so we should be in good shape).

Another issue of the Barcelona Line 9, is actually cost.

The Initial estimates for the Barcelona Line 9 pegged the cost at around 2 billion Euros (3 billion CAD), but actual construction cost turned out to be 6.927 billion Euros (10.3 billion CAD). Per kilometre, thatâ€s 145 million Euros (216 million CAD).

But we have to consider that this project is hugely complex (much more than the Pink line), with great tunnel depths, station insertions in the middle of neighborhoods, 20 transfer stations, complicated geology. So overall, the cost is still very reasonable .

Overall, Barcelonaâ€s Line 9 is a very interesting project that should definitely be used for inspiration, not just for the technological aspects (large diameter TBM with stacked tracks, use of different construction methods including viaducts), but also the planning aspects (maximizing population access, network thinking, branching).

Using some of the same techniques, good spending discipline and some cost optimizations, it should indeed be possible to construct the â€œPink Lineâ€ proposed by Project Montreal with cost projections that are at least similar to the estimated $6 billion.

Also check out this video introducing the line.

Mont Royal:Convertissons la Conduite Urbaine en Ski Urbain!

2018-01-22T00:27:16Z

Go to English Version

La mort rÃ©cente dâ€un cycliste sur Camillien-Houde, le chemin passant Ã travers le Mont Royal, a amenÃ© plusieurs Ã demander de faire cesser la conduite Ã travers la montagne. Une fermeture partielle du Chemin pourrait permettre de maintenir les lignes dâ€autobus sur la montagne, de mÃªme que la pratique de sports et autres activitÃ©s.

(Trivia: le Chemin a Ã©tÃ© construit par le maire Drapeau dans les annÃ©es 60, et a Ã©tÃ© nommÃ© comme insulte au prÃ©cÃ©dent maire Camillien Houde, qui Ã©tait contre la construction dâ€une route sur la montagne. )

Une faÃ§on intÃ©ressante dâ€utiliser la route serait de la transformer en piste de ski alpin durant lâ€hiver.

Une piste de ski sur la montagne permettrait aux personnes nâ€ayant pas accÃ¨s Ã la voiture de sâ€adonner au sport dâ€hiver et serait particuliÃ¨rement intÃ©ressant pour les familles urbaines. OÃ¹ dâ€autre pourrait-on prendre le transport en commun pour aller skier?

Et si on possÃ¨de une voiture, on pourra toujour se stationner prÃ¨s du Lac aux Castors, sur la montagne. Pourquoi ne pas y aller pour une activitÃ© neige aprÃ¨s le travail?

Une piste au milieu de la ville augmenterait sÃ»rement lâ€attrait touristique de MontrÃ©al, particuliÃ¨rement en hiver: ski durant la journÃ©e avec vue sur la ville, aprÃ¨s-ski dans un resto ou cafÃ© sur le Plateau ou au centre-ville. Ce serait une accroche, comme le Ski-Dubai ou la rampe construite sur une centrale Ã©lectrique Ã Copenhague, au Danemark.

Amagger Bakke Ã Copenhagen et Ski Dubai

La montagne est-elle assez grande pour le ski?

Certains cyniques se plaisent Ã appeler le Mont Royal une â€œcollineâ€, et pourraient penser quâ€il est un peu petit pour le ski. Il sâ€avÃ¨re que notre colline est beaucoup plus grosse que les pistes mieux connues de Dubai et Copenhague. Le Mont Royal est aussi plus gros que la pente la plus proche: le Mont St-Bruno! Il y a bien sÃ»r des montagnes plus hautes dans la rÃ©gion, mais il faut conduire beaucoup plus loin pour Ã§a.

La hauteur de la montagne est assez acceptable comparÃ© aux autres stations de ski, et la longueur est trÃ¨s bonne. Ceci est dÃ» Ã la pente douce (8,5%), qui la place entre une piste dÃ©butante et une piste verte.

La pente douce est parfaite pour les familles avec de jeunes enfants, qui nâ€ont pas beaucoup dâ€expÃ©rience de ski.

Faisons un projet pilote aujourdâ€hui!

Pour montrer la viabilitÃ© du projet et avoir un peu de plaisir, on pourrait avoir un projet pilote simple cet hiver. Comme premiÃ¨re Ã©tape, on pourrait diviser Camillien-Houde et utiliser une moitiÃ© pour le ski, et lâ€autre moitiÃ© pour des navettes de remontÃ©e (et pour les autobus locaux).

Pour lâ€expÃ©rience de ski, câ€est un peu Ã©troit, mais comme la pente est trÃ¨s douce, il ne devrait pas y avoir dâ€inquiÃ©tudes majeurs pour la sÃ©curitÃ©.

Avec seulement quelques autobus, des clÃ´tures, et une seule dameuse, on pourrait commencer les activitÃ©s dâ€hiver dÃ¨s maintenant!

Si le ski sâ€avÃ¨re populaire, cela pourrait devenir un attrait permanent: on pourrait alors utiliser la largeur complÃ¨te de la voie pour avoir des pistes plus larges. Ã‰ventuellement, on pourrait mÃªme construire un tÃ©lÃ©phÃ©rique permanent jusquâ€en haut de la montagne, qui permettrait dâ€amÃ©liorer lâ€accÃ¨s pour les personnes Ã mobilitÃ© rÃ©duite et les familles toute lâ€annÃ©e.

aller Ã la version franÃ§aise

Mont Royal Mountain:
Letâ€s turn Urban Driving into Urban Downhill Skiing!

The recent death of a cyclist on Camilien-Houde, the road across the Mont Royal, has led to calls to remove driving across the mountain. A partial closure of the road could maintain bus routes across the mountain, while allowing sports and other activities.

(Trivia: The road was built by mayor Drapeau in the 60s, and named as an insult to previous mayor Camillien Houde, who was always against having a road across the mountain.)

One interesting way to repurpose the road would be to turn it into a downhill ski slope in the winter.

A ski slope on the mountain will allow people who donâ€t have cars to enjoy the winter sport, and will be especially great for urban families. Where else could you take local public transit to go skiing?

And if you do have a car, youâ€ll still be able to drive to the ski slope and park near Beaver Lake on top of the mountain! Why not go for some after-work snow activities on your way home?

Having a ski hill in the middle of the city will definitely add to the tourist appeal of Montreal, especially in the winter: ski during the day with a view of the city, then aprÃ¨s-ski in a Plateau or downtown restaurant or cafÃ©. It could be a hook, like Ski-Dubai or the ski ramp built on a power plant in Copenhagen, Denmark.

Amagger Bakke in Copenhagen and Ski Dubai

Is the mountain big enough for skiing?

Some cynical people like to call Mont Royal a mere hill, and may think itâ€s a little small for skiing. Well, it turns out that our hill is much bigger than the ski toys in Dubai and Copenhagen. The Mont Royal is actually even bigger than the closest ski hill near Montreal, Mont St-Bruno! There are of course bigger ski hills in the region, but youâ€d have to drive much further for those.

The height of the mountain is pretty acceptable compared to other ski facilities, and the overall length is very good. This is due to its relatively shallow slope (8.5%), which puts it somewhere between a bunny hill and a green slope.

The slope means itâ€s great for families with young children, who donâ€t have a lot of skiing experience.

Letâ€s do a pilot project today!

To show the viability of the project and to have some fun, we could have a simple pilot this winter. We could divide Camillien-Houde and use half for skiing, and the other half for a ski shuttle up the hill (and also to run the local buses).

As far as skiing goes, itâ€s a bit narrow, but since the piste is not very steep, there shouldnâ€t be major safety concerns.

With only a couple of buses, some fences, and a single snow groomer, we could start the winter activities today! (Note that the city already does snow grooming on the mountain, for the cross-country pistes)

If downhill skiing proves successful, this could become a permanent feature. We could use the full width of the street, and have a much wider piste. Eventually, we could even build a permanent gondola or aerial tram to the top of the mountain, improving access for less mobile folks and families all year round.

The Cost of Montreal’s Free Transit Weekend

2017-10-08T21:19:38Z

Update: October 4, 2017 (added missing day pass in last table)

Two weekends ago, Montreal had a weekend with free transit. In general, this sounds like a good idea. It’s a way to get people to try out transit, maybe encourage them consider to use it more often. Or maybe use it on a path to make transit much more affordable or even free, as some advocate for.

Rumors are transit was jam-packed all weekend.

However, the whole thing does leave a bit of a bitter after-taste, because this wasn’t planned ahead of time in order to advance transit in general, but rather as a last-minute mitigation measure for the Formula E. This car-race set up in Eastern downtown brought barriers all over that part of the city, and by making transit free it was hoped some of the traffic and mobility problems could be aleviated.

The politicians in charge are trying to sell the Formula E as advancing electric transportation, because the race cars run on batteries. Others view it as a bunch of green-washing. In any case, there’s been a lot of criticism due the large amount of money Montreal spent on the event, largely to build a temporary race track in the middle of the city (2km away from the permanent Formula 1 race track). And the free transit weekend can be viewed as adding to the bill.

I’ve been asked to make an estimate how much the STM lost in transit fares that weekend.

So let’s look at some numbers, without going too deeply into the political story.

What fares do people use in general?

If we want to know how much money was ‘lost’ in fares that weekend, we need to have an idea what the relative make-up of the various fares is, i.e. how many people use monthly, weekly, daily passes, or single trips. We also need to know how many such fares are bought for a weekend in the summer.

The STM doesn’t really publish such detailled information, but we can infer it from some OPUS card tap-in data that was released for 2011 at some hackathon.

STM Fares used for each trip
monthly	60.4%	248,040,271
single trips	19.3%	79,403,645
TRAM	11.9%	49,089,075
weekly	5.7%	23,359,274
gratis	1.3%	5,162,210
24h	0.7%	2,876,060
3 days	0.6%	2,434,481
evening	0.1%	612,571
other	0.0%	22,413
total		411,000,000

We see that a good 60% of all trips use STM monthly passes, another 12% use regional tickets (TRAM), most of which are also monthly passes. Together with weekly passes, nearly 80% of trips are done via passes. About 20% of trips are done with single passes (most are bought as 10 at a time). The rest are basically rounding errors.

What fares do people use on Summer Weekends?

During the weekeend, especially in the summer, the make-up of fares will be different. Luckily the OPUS data includes some weekend days, so we can make a more exact inference. We actually only have data for one weekend in July, so the data may not be very representative — take it with a grain of salt.

We get the following make-up of fares:

Summer Weekend Trips (per day)
monthly	54.2%	352,716
single trips	27.3%	177,505
TRAM	6.2%	40,144
weekly	6.5%	42,215
gratis	1.4%	8,972
24h	2.2%	14,393
3 days	1.5%	9,937
evening	0.8%	5,191
other	0.0%	29
total		651,102

We see that during the weekend in the summer, there’s a much larger percentage of single trips (27% vs 19%), and much fewer regional passes (TRAM, 6% vs 12%). This makes sense: there are more occasional trips on the weekend, and fewer of the commuting suburbanites coming into town. There’s also a higher use of 3-day, 24-hour and evening passes, although their absolute number is still low.

How much revenues were ‘lost’ on the Free weekend?

Two big factors made the ridership increase on the free weekend: The events going on in downtown, like the Formula E, and the fact that the transit was free.

If we want to count only ‘lost’ revenue, we have to discount the fact that the transit was free — you can’t really count the lost revenue of users that only used the transit because it was free.

Regarding the impact of the event itself, it’s hard to make an estimate. We can simply take the number of trips we know about, and note that this is a lower bound.

For ‘lost’ revenue, we only have to consider usual revenue from weekend, day passes, evening passes and single trips. Weekly and monthly passes are paid ‘already’, so the impact should be small.

On our given summer weekend, we find the following number of trips for the various fare types, and the resulting cost:

Summer Weekend Tickets (adjusted for 2015 ridership)
	# regular	# reduced	regular fare	reduced fare	revenue
1 passage	126057	7589	$3.25	$2.25	$426,761
2 passages	51227	1943	$3.00	$2.00	$157,567
6/10 passages	127587	40604	$2.70	$1.65	$411,482
evening	5329	–	$5.00	–	$26,645
1day	10778	–	$10.00	–	$107,780
3days/weekend	4531	–	$13.75	–	$62,301
total	314731	50136	Â	Â	$1,192,535

(Note that I scaled the 2011 data to 2015 ridership levels, to account for trips missing in the data and the increase in ridership in ridership over the years)

There we have it. Apparently, the STM Montreal lost at least 1.2M$ as a mitigation measure for the impact of the Formula E. This matches earlier estimates. But it’s possible that this was always going to be a weekend where a lot of people were going to take transit, even if fares where charged, so the actual loss may be higher than that.

Does Automating the Metro Save Lots of Money?

2017-07-27T14:08:23Z

As a continuation of my recent post on the cost of operating the Montreal Metro, I wanted to look at the merits of automation. The recent discussion of the planned REM light metro has brought that subject up repeatedly, with the implication that drivers are super expensive and that you can save a lot of money by running completely unattended trains. The PR keeps touting that it would be one of the largest automated metro systems, often along the claim that transit will be profitable from now on.

But can automation actually turn a heavily subsidized transit system into a suddenly profitable one?

A while back I spoke to the technical director of CDPQInfra (the private company which wants to build the REM), at one of their poster sessions. I was doubtful automation would reduce operating cost very much. How expensive can the drivers possibly be, compared to the rest of the system? The technical director emphasized that back in Lyon, where he gained a lot of his experience, they had three automated lines, and one non-automated one — and that line always gave them problems, and was much more expensive to operate.

I looked it up later, and it turns out that this one manually operated line of the Lyon Metro, the Line C, is a tiny, 2.4km-long cog-railway, with steep inclines of 17%, operated with a tiny fleet of 2-car trains that were built specially for this operation. Of course this line is going to be expensive to operate!

Lyon Metro Line C (source)

I find it rather strange that this example was being brought up at all in the discussion of automation. It means a line that is inherently very expensive is being used as an example to show the expensiveness of manual train operations.

Back to the Montreal Metro. My previous article on the cost of the metro already showed that it is likely cheaper to operate per passenger-km than the REM will be, despite one having drivers and the other not. This is probably thanks to its concentration in urban areas and resulting high ridership. But how much could we save if we automated the metro and get rid of the drivers?

One way to estimate this is to calculate the cost of metro drivers, and compare that to the cost of converting to automatic operation.

The Cost of the Metro Drivers

In 2011,the STM employeed 308 metro drivers – and more than 9000 employees overall. Already thereâ€s a hint that 3% of the employees will probably not have a very large financial impact overall.

Assuming 100,000$ cost per metro driver in 2015 [1], and assuming that the number of metro employees increased by the same amount as the amount of service between 2011 and 2015 [2], this means the drivers cost about 31 million $ per year.

The table below shows the cost of drivers compared to the operating cost and total cost of the metro:

STM Metro Drivers 2015	cost	Cost per passenger-km	% of operating cost	% of total cost
Total pay of Metro drivers	31M$	1.4Â¢	7.6%	3.5%
Metro operating cost	406M$	18.3Â¢	100.0%	46.2%
Metro operating + capital cost	878M$	39.7Â¢	n/a	100.0%

(see spreadsheet with complete calculations)

$31 million may sound like a lot, but it only represents about 7.6% of the metro operating costs, and only about 3.5% of the total operating + annualized capital costs of the metro system.

The number of metro drivers is relatively small — there are many more people tasked with maintaining the trains and tracks. There are also a lot more ticket booth attendants than driers: 447. It would probably be easier to save money by removing those.

Still, letâ€s say saving a couple of percent on the operating cost of the metro would be great. A penny saved is a penny earned!

In order to know how much it will save, we need to know how much it will cost.

The Cost of Automation

The problem with automation is that in order to create a completely unattended system, the industry best practice is to install platform screen doors to ensure that nobody can ever enter the tracks.

Platform screen doors at Sacoma station in Sao Paolo (source)

The STM estimates the cost to install platform screen doors to be about 10M$ per station, or 5M$ per platform. (In Toronto a detailed study came up with the same amount.)

Letâ€s assume this is still a realistic cost estimate, that this is the only cost needed to get to full automation and that the Montreal signal system is already â€˜readyâ€ for automation. This would give us the following cost:

Platform screen doors cost per platform	5M$
Number of metro platforms	146
Total capital cost	730M$
Annual cost of capital	4%
Annual cost of platform screen doors	29.2M$

So assuming that we can get rid of all metro drivers by automating, and assuming that we can automate by simply installing platform screen doors, we find that the annual cost of drivers matches the annual cost of paying off the upgrades (~30M$).

In our completely optimistic calculation, the already small savings are being completely undone by the costs.

But the reality is more complicated than that. Firstly, you canâ€t get rid of all employees in the metro system. In Vancouverâ€s automated Skytrain network, a large number of attendants are roaming the system to ensure safety and deal with emergencies.

Further, salaries paid to employees living in Montreal have a way of circulating back to the budget (via taxes), but also circulate in the local economy. I donâ€t think itâ€s the role of the state to employ people, but I think this consideration does skew the equation towards paying people rather than buying things from international vendors where most of the money will get exported away.

So if weâ€d take these points into account, we will actually lose money every year by converting the metro to automatic operation, based on the cost of platform screen doors alone.

Thereâ€s another problem: Platform screen doors have to be placed exactly to match the location of the doors of the trains. But the new Azur trains of the Montreal Metro have 3 doors per car instead of 4 like the existing trains. So any automation effort can really only be done after the line is converted to all new trains.

Are there Arguments for Automation besides Cost?

This analysis so far has only looked at the cost of drivers. But are there other arguments in favor of automation?

When talking about automation, we generally separate â€œautomatic train operationâ€ (ATO), where a computer drives the trains to the next station, from â€œunattended train operationâ€ (UTO), where a computer also opens and closes the doors.

So under ATO, there are still â€œdriversâ€, who open and close the doors, ensure the safety of passengers, and deal with emergency situations. But the driving itself is done by a computer. It ensures that the trains respect safe distances and speed limits, accelerates and decelerates the trains, and makes it stop at the next station.

The ability to increase the frequency of trains and thus capacity is the main argument in favor of automation, not necessarily driver cost.

The Montreal Metro is actually already operated this way, the drivers mostly ensure safety of the passengers, but the trains drive themselves to the next station.

Being able to increase the frequency of the metro would be incredibly useful, especially on the overcrowded Orange line. But the bottleneck is not the computer or signalling system that drives the trains. The main problem is the safety in the tunnels.

The metro uses only a single tunnel for both directions, so thereâ€s no separate one that can be used for egress in emergency situations. Therefore the system has adopted a rule that a train may only leave a station when the path to the next station is clear.

If we want to increase frequency and thus capacity, we would have to upgrade the safety systems and plans to allow multiple trains in the tunnels between stations.

So in the end, the main benefit of automatic train operation isnâ€t the removal of drivers, but the increase in capacity. But for the Montreal Metro, further automation would not help at this point, because the bottleneck today is due to the safety rules in the tunnels — which we would have to fix first.

[1] Every of the 9374 employees cost the STM about 90,774$ on average, including all benefits (see page 50 of the 2015 budget).

[2] total vehicle-km increased by 1.7% between 2011 and 2015, from 77 million to 78.3 million vehicle-km.

Is the Montreal Metro Profitable?

2017-07-07T14:05:42Z

Recent discussions about transit and profitability seem to imply that a transit system could be profitable if you privatize and automate it. This led me to wonder whether the Montreal Metro, a semi-automated system, is actually profitable.

From an accounting perspective, profitability is simple: add up the revenues and the costs of doing business, and if your revenues exceed your costs, youâ€re profitable.

I don’t do this with a view of exploring the merits of subsidies, but with a desire to get a more accurate accounting of the cost of transit, in particular comparing different modes of transit.

A transit system generates revenues through fares and other activities like selling ad space (other revenues). Costs include not only operations (ongoing labour, maintenance, energy/gasoline, etc.), but also capital expenses (building new lines, buying trains/buses, major renovations, technology upgrades like the Ibus tracking and fleet management system, etc.). A transit system also receives subsidies (which it counts as revenue) because fares generally donâ€t cover operations and capital expenses.

The STMâ€s numbers are easily found in their budgets, Which gives us the totals for costs and revenues of the bus and metro system.

The budget pools together paratransit, bus and metro, so if we only want to calculate the profitability of the metro, weâ€ll need to split up the costs and revenues by mode. Also, the investments shown in the operating budget do not include all the capital costs of the STM, so we will need to find those numbers as well.

To be able to compare the revenues and costs across the different systems with different number of passengers engaging in trips of different lengths, we need a common measure that accounts for these differences. One such measure is the passenger-km, which represents the total number of kilometers all passengers are travelling in the system. It provides a good way to compare the revenues and costs across different networks, and provides a common point of reference when discussing profitability and subsidies.

An example of the use of passenger-km (or pass-km) is in the following chart published by CDPQInfra, the promoters of the REM, to compare costs and subsidies of the REM and the existing networks in Montreal.

Back to Metro profitability, we will need to do the following:

Find the passenger-kilometres of the STM and how they are split between the bus and metro
Divide the cost of operations between bus and metro
Divide the revenues between bus and metro
Divide capital costs between bus and metro.
Divide all the costs by the total passenger-kilometres.

In order to make numbers more comparable, we will exclude paratransit. Iâ€ll show my calculations for the year of 2015, but numbers donâ€t change much during the years.

If you’re not interested in the detailed breakdowns, you can skip ahead to the result:

1) Passenger-Kilometers of the STM
2) Cost of Operations of Bus and Metro
3) Revenues of Bus and Metro
4) capital cost
The Results
Conclusion

1) Passenger-Kilometers of the STM

The STM publishes very little information about the passenger-kilometers they achieve. Luckily we have access to the Canadian Public Transit Association (CUTA) factbook, which provides this number. According to the CUTA factbook of 2015, the STM moved passengers a total of 3.45 billion km.

Unfortunately, we are still left with the problem of splitting the kilometres between the bus and the metro. There is almost no information available about this. After much searching, the only reference I found is in a 2013 presentation given by the STM at a conference in the Czech Republic. It indicates that the metro accounts for 64% of the passenger kilometers of the system. This number is a few years old, but it still provides the best estimate for our calculations â€” even if the total ridership has changed, the proportions are likely similar.

Passenger-Kilometers of the STM
metro passenger km	2,211 million km
bus passenger km	1,243 million km
total passenger-km	3,455 million km

2) Cost of Operations of Bus and Metro

The budget of the STM provides the the following revenue and cost summary in their 2015 budget (page 10):

On the revenue side, we see plenty of income from fares, but also a lot of subsidies.
On the expenses side, most of the money is spent operating the bus and metro, but a large chunk also goes towards paratransit. The budget also includes some investments (capital costs).

To split the costs by metro and bus, we can look further in the budget, where the STM provides a breakdown of operating costs by administrative unit (page 61):

Luckily for us, the operating costs of the metro is shown separately from bus and paratransit. However, to get the complete picture, we have to figure out how to allocate the cost not directly associated with the metro or bus system, but represents services shared between them. In the absence of specific information, the best we can do is find a reasonable split. On the one hand, the metro transports more passengers and is generally more technically complicated to operate than buses. On the other hand, the bus network has twice the numbers of employees (page 62 in 2005 budget) and costs twice as much to operate compared to the metro. Considering this, I decided that splitting the shared services 40% for the metro and 60% for the bus was reasonable.

Strangely, the costs shown in the STM chart do not add up to the budgetâ€s total operating cost but we will ignore this for our calculations.

Bus & Metro Operating Costs of the STM (2015)
metro	405M$
bus	679M$
bus & metro	1,085M$

3) Revenues of Bus and Metro

The next step is to allocate the revenues between the metro and bus, as they are reported together in the STM budget. Again, this is not a trivial task.

To illustrate the complexity, imagine a passenger purchases a single ticket and takes a bus for 2 km, then the metro for 6km, then another bus for 2km. How should we split the fare between the bus and metro? Should we split the fare 60/40 based on the number of travelled kilometers? What if the passenger transfers from one metro line to another? Or 50/50 between bus and metro? Or 33/66 because the metro was taken once, but buses were taken twice (or, in industry terms, â€œby boardingâ€)? What if the passenger transferred from one metro line to another?

To answer this question, I tried to find out how the STM and agencies share revenues for passes that span multiple transit agencies. I found that a hybrid is used: for TRAM monthly passes covering multiple agencies, the first 23.75$ are shared in proportion to the number of trips, the remainder according to passenger-km travelled (budget 2015, page 141). I applied a similar sharing model to the calculations, and allocated 20% of the revenues by boarding and the rest by passenger-km.

While analyzing revenue-splitting, I considered factoring-in the type of tickets to get more accurate numbers. Analyzing STM OPUS card tap-in data, I found that there are more single and short term tickets used on the metro compared to the bus, which in turn sees more weekly and monthly passes. This may be relevant, since single tickets bring in more revenue per trip compared to pases. On the other hand, the Metro sees more monthly passes that are shared with other agencies (TRAM passes), which complicate revenue allocations.

Without being able to model these accurately, weâ€ll simply assume that the usage of different tickets across the different networks has a negligible impact on revenue.

Bus & Metro Revenue (2015)
	per boarding	per km	combined
metro	384 M$	422 M$	415 M$
bus	275 M$	237 M$	245 M$
total	660 M$	660 M$	660 M$

4) capital cost

Capital costs are the big one time costs used to build lines, upgrade them or make large renovations.

It is possible to trade operating costs for capital costs — for example, a system could decide to spend a lot of money to replace an expensive-to-operate heavily used bus line with an automated light metro line, which may reduce the number of staff required and thus the operating cost – but requiring a lot of capital expenditure.

On the other hand, a system could decide to never build capital-intensive rail lines at all and transport everybody by bus all the time. Then the capital costs will be much lower (since you basically only need the buses and garages), but the operating costs will be very high.

So in order to get a complete picture of the total cost of running transit, we need to consider the capital costs.

Generally, we expect the capital costs for a metro system to be large due to the expensive infrastructure, and the capital costs for a bus system to be small. For the operating cost itâ€s the other way round — and depending on how many users there are running on the line, the total cost of one or the other may be cheaper per passenger.

Figuring out how to count the capital costs can be quite tricky. Some investment spendings come out of the operating budget. Capital spending may vary from year to year, depending on the construction projects. Capital costs are also often paid via debt, which then spreads the costs over many years and makes it hard to identify when the costs happen.

From an accounting perspective, there are two approaches to counting the capital costs: when the money is made available and when it is spent. Both approaches have shortcomings, as debt makes it hard to track when the money for capital projects is paid out. The STM budget also doesnâ€t provide a detailed view to track this information. Further, itâ€s impossible to split the information to bus and metro spending.

Tracking when the money is spent is much easier: each year there is a capital budget, and there is even a listing of the projects where most of the money is spent. This allows to differentiate bus and metro spending. The problem is that this pretends that the capital cost of the system is only due to projects that are being done in one year, when in reality most of the capital spending may have been done in the past, with the debt being paid off slowly.

Looking at the capital budget over multiple years, we see that the spending has been relatively constant, around 600M$ per year (although there were some spikes in recent years due to the purchase of new metro cars). Also consider that the only metro extension in nearly thirty years, the 2007 Laval extension of the Orange line, cost 745M$ in total â€” not much more than a single year of capital budgets now.

The capital budget can be relatively easily split into bus and metro, since most of the budget is for major projects:

It seems overall, using the year-of-expenditure view of capital cost provides a reasonable approximation of the total capital cost of the system, and allows us to break it down into bus and metro spending.

The Results

Putting all of these numbers together, weâ€ll get the following results:

Bus & Metro Cost & Revenue per Passenger-km (2015)
	Metro	Bus	Overall
revenue (per passenger-km)	18.7c	19.7c	19.1c
operating cost (per passenger-km)	18.3c	54.6c	31.4c
capital cost (per passenger-km)	21.4c	11.9c	18.0c
total cost (per passenger-km)	39.7c	66.5c	49.4c

As expected, the metro is cheaper to operate, but the capital costs are higher, compared to the bus. The capital costs for the STM bus system actually seem a bit high — this may be due to large bus infrastructure projects going on right now, work on garages and updated real-time tracking systems.

Also note that the bus has more revenue per kilometre. This is because metro trips are longer on average compared to bus trips, ever since the metro extension to Laval (page 20).

Conclusion

We find that the metro is barely profitable operationally. Since the subsidies are provided to both the metro and the bus system, we could claim that the metro is profitable after subsidies, and that these profits are used to subsidize the capital costs of the metro, or more likely, the operating costs of the buses.

One important thing to remember is that the STM forms a system of buses working together with the metro. Many passengers use buses to get to the metro, meaning the buses extend the reach of the metro. Without the feeder buses, the metro could not attract enough riders to be profitable.

So we can say overall that the metro is operationally profitable but only if we ignore the help of the feeder buses.

See the detailled spreadsheet for all the data.

Aside: On Presenting Reproducible Numbers

One thing I found during this work is that the story could change if the numbers were picked slightly differently, if I made different choices and assumptions. It would be possible to make the metro look unprofitable or make it look much more profitable, by changing the way costs and revenues are split between buses and metro, or if one were to sneak the cost of paratransit into the equations.

So if somebody provides numbers like this, itâ€s important that they publish their assumptions and calculations alongside it.

This brings us back to the graph made by CDPQInfra, the private promoters of the REM. Firstly you can see that the Montreal metro is as cheap or cheaper to operate than the fully-automated REM would be in the future (19c vs 19-25c).

But also, note that both the Metro system itself and the STM overall are cheaper to operate than whatever â€˜existing networksâ€ CDPQInfra presents, and that the total cost including capital costs is much lower as well. They are showing numbers without providing the details of their calculations, trying to tell a story that may not withstand scrutiny.

This is a bit concerning, because their whole story of profitable transit, which is presented as having the same overall cost as the existing transit lines, is used to justify important policy decisions and spending of large amount of public money.

Catbus

Far From Boring:Meet the Most Interesting Tunnel Boring Machines

The Giant TBM

The Vertical TBM

The Diagonal TBM

The Rectangular TBM

Conclusion

2017 in Review

Other stories in 2017

2017 and Me

Most Popular Posts in 2017

The “World’s First Solar Train” is in Reality a Battery Train

Footnotes

Privatization of the Deux-Montagnes Line:How to Value a Transit Line?

How much will the CDPQ pay for the Deux-Montagne line?

How Much Money did we actually invest in the line?

How much is the line worth on the Books of the RTM?

The Land Value

Business valuation – the Value of the Contract

Business valuation – With some Investment to Increase Ridership

So why should we care? – The Ownership Model of the REM

Replacement Value

Summary

Footnotes

Whatâ€™s a Gadgetbahn?

Cost, Speed, Comfort
– The problem is geometry, physics and the Right of Way

The Maglev

The Real Issue: Economics

Be distrustful of Gadgetbahn Concepts

Barcelonaâ€™s Line 9 – Inspiring Montrealâ€™s Pink Line

Mont Royal:Convertissons la Conduite Urbaine en Ski Urbain!

Mont Royal Mountain:
Letâ€s turn Urban Driving into Urban Downhill Skiing!

The Cost of Montreal’s Free Transit Weekend

Does Automating the Metro Save Lots of Money?

Is the Montreal Metro Profitable?

Catbus

Far From Boring:Meet the Most Interesting Tunnel Boring Machines

The Giant TBM

The Vertical TBM

The Diagonal TBM

The Rectangular TBM

Conclusion

2017 in Review

Other stories in 2017

2017 and Me

Most Popular Posts in 2017

The “World’s First Solar Train” is in Reality a Battery Train

Footnotes

Privatization of the Deux-Montagnes Line:How to Value a Transit Line?

How much will the CDPQ pay for the Deux-Montagne line?

How Much Money did we actually invest in the line?

How much is the line worth on the Books of the RTM?

The Land Value

Business valuation – the Value of the Contract

Business valuation – With some Investment to Increase Ridership

So why should we care? – The Ownership Model of the REM

Replacement Value

Summary

Footnotes

Whatâ€™s a Gadgetbahn?

Cost, Speed, Comfort– The problem is geometry, physics and the Right of Way

The Maglev

The Real Issue: Economics

Be distrustful of Gadgetbahn Concepts

Barcelonaâ€™s Line 9 – Inspiring Montrealâ€™s Pink Line

Mont Royal:Convertissons la Conduite Urbaine en Ski Urbain!

Mont Royal Mountain:Letâ€s turn Urban Driving into Urban Downhill Skiing!

The Cost of Montreal’s Free Transit Weekend

Does Automating the Metro Save Lots of Money?

Is the Montreal Metro Profitable?

Cost, Speed, Comfort
– The problem is geometry, physics and the Right of Way

Mont Royal Mountain:
Letâ€s turn Urban Driving into Urban Downhill Skiing!