Opinion: Caisse’s light rail dreams in Montreal turn to shipwreck
Public transit projects are eminently political projects. The Caisse de depot et placement du Quebec found out the hard way, after its disorderly withdrawal from a $10 billion light rail project to link downtown Montreal to the east of the city. , long neglected.
Quebec Premier Francois Legault and Montreal Mayor Valérie Plante announced last week that the provincial Department of Transportation and two Montreal-area transit authorities would take control of the project, known as the name of REM from the East, in the face of growing opposition from the East. -final residents and experts in urban planning for several aspects of the Caisse project.
The incident illustrates the pitfalls inherent in the $420 billion pension fund manager’s efforts to sell governments on its bid to build and operate infrastructure projects. The Fund touted its turnkey model as an “innovative” way for governments to fund projects that eliminate public debt for cost overruns while ensuring stable returns for the pension fund. But the Caisse’s ability to keep this promise is increasingly in doubt.
In 2015, former Caisse chief executive Michael Sabia persuaded the government of Philippe Couillard, then premier of Quebec, to test the model with his $6.9 billion Réseau express métropolitain (REM) dollars, a 67 kilometer LRT project linking downtown Montreal to Trudeau International Airport and the western and southern suburbs of the city.
But the project, originally slated to start operating by the end of 2020, remains far from complete, while the massive concrete columns erected to accommodate the elevated SLR tracks bear little resemblance to the slick, modern renderings the Caisse presented to sell the project. Instead, the REM’s infrastructure looks like a brutalist holdover from the last century.
The project has also been marred by a dispute over funding for a $600 million REM station at Trudeau Airport. The Canada Infrastructure Bank, which lends $1.3 billion for the REM, agreed last year to provide a $400 million loan to the Montreal Airport Authority for the construction of the terminal. The federal and provincial governments are also each loaning $100 million to Aéroports de Montréal to complete the station, increasing the overall taxpayer bill.
In addition, the REM will require continued operating subsidies from the provincial government to ensure the Caisse the required return on the project and to prevent passenger fares from reaching levels that would discourage commuters from using the LRT line. .
The Caisse had been roundly criticized for having acted in a brutal manner even before submitting its proposal for the REM de l’Est at the end of 2020. The government of Mr. Legault’s Coalition Avenir Québec nevertheless signed the second project in hopes of reviving the redevelopment of the deindustrialized east of the city.
But public backlash to the Caisse’s plan to build unsightly elevated lanes on a major downtown thoroughfare and in scenic lower-income neighborhoods to the east, including the Morgan Park heritage district, led M Legault to withdraw his support for the Caisse’s proposal – five months before a provincial election.
“The aerial section crossing downtown would have been a historic error that absolutely had to be avoided,” insisted Ms. Plante, announcing, alongside Mr. Legault, that the Société publique de transport de Montréal and the Agence régionale de transport métropolitain, or ARTM, will now work with the provincial ministry of transport to develop an alternative to the Caisse project. The new project will completely remove the downtown section of the Eastern REM and connect to the city’s metro system in eastern Montreal. It should cost well under $10 billion.
The ARTM, a provincial organization responsible for planning public transit in the greater Montreal area, had particularly criticized the Caisse’s proposal. In a February report, it estimated that 94% of peak-hour passengers on the Eastern REM would have been diverted from the STM metro system or an existing commuter train network, putting the financial viability of these public transport systems at risk.
Caisse chief executive Charles Émond, who was named to the top job of pension fund manager by Mr. Legault in early 2020, appeared last week to accuse Ms. Plante of flip-flopping, saying told reporters that the mayor had told her privately 10 days earlier that she supported the Caisse’s revised plan to bury a 500-meter portion of the REM de l’Est along boul. Rene-Levesque. He also noted that the Caisse had registered the name REM de l’Est, which implies that the city and the province cannot legally use this name for their project.
His remarks sounded like sour grapes, leaving Mr. Émond, who earned $6.3 million in 2021, with an even bigger black eye than if he had humbly accepted the decision of elected officials to take over the project at the box.
According to some analysts, the debacle of the REM de l’Est should not harm the Caisse’s chances of selling its turnkey infrastructure model to other cities. Mr. Émond’s comments suggest otherwise.
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