snowball effect (n.)
1.(figurative)the consequence of one event setting off a chain of similar events (like a falling domino causing a whole row of upended dominos to fall)
**** Story updated at the bottom: 5 am, November 1st- UK author citing BC rail connection to Sea to Sky project, phase 1, responds.
Like a snowball rolling down a hill, gathering snow, the story broken here on my site last week, gathered momentum quite quickly as more facts and even more questions began accumulating.
Continued research into the information provided by my sources have since revealed a multitude of shocking details that are prompting me to call for an immediate review of all P3 projects in the province by the auditor general.
In my initial story, I supplied a copy of a confidential document from Macquarie North America Ltd (one of the members of the S2S consortium that operates the highway, and the financial advisor to the deal ), that specifically highlights the use of shadow tolls as part of the arrangement, in an overview of the financial transaction.
In addition, I posted another document that had been originally presented at an industry conference , as an overview of the entire project. This document also identified the use of shadow tolls on the Sea to Sky highway as one of the P3 highlight, noting both the traffic revenue as 10-15% as well as noting that as protection against lost revenue, “shadow toll means no driver disincentive to use the road.”
Seeing the report of the financial advisor Macquarie, was alone, enough confirmation for me, since they are an international firm, the same one who could not meet the financing requirements of the Port Mann bridge project. Not likely the financial advisor is going to make a false, or incorrect statement, especially when lecturing business students at Sauder School of Business at UBC.
However, when contacted by myself for a comment on the shadow tolls in the Sea to Sky agreement, the Minister for Transportation and highways,Shirley Bond, did not respond. The Public affairs bureau representative for the MOT, Dave Crebo, forwarded me this statement:
There are no shadow tolls on the Sea-to-Sky Highway. As part of the operations and maintenance portion of the contract with the concessionaire, performance measures are in place for such things as lane availability, efficient movement of traffic and safety as measured by accident statistics. Additionally, these performance measures are monitored and audited by Ministry staff on an ongoing basis. That means if the concessionaire does not meet these standards, then penalties are applied and they don’t earn their full payment. This helps ensure good value for taxpayers, as outlined in the report Achieving Value for Money Sea-to-Sky Highway Improvement Project available on the Partnerships BC website. The details of these contracts are also publicly available on the Partnerships BC website. As well the Auditor-General has reviewed and approved both the contract with the concessionaire as well as the value for money report.
Fine and dandy – there most certainly are performance and availability payments as he describes, that make up other components of the total payment to the operator,but Mr. Crebo fails to mention all the facts. I will tell you why the auditor generals approval he refers to is questionable, later – however since Mr. Crebo failed to address why companies so closely involved with the project would be openly proclaiming and highlighting the use of shadow tolls if it were not true, I asked him directly to explain this to me. Both my sources and documentation directly refute his statement.
This was his response :
I can’t speak for your source, Laila, so best for him/her to explain themselves. What I can confirm unequivocally though, is that there are no shadow tolls on the S2S. Further, every detail about the payments to the concessionaire are in the agreement that’s posted publicly, and has been reviewed by the OAG.
Again, Mr. Crebo blatantly evaded answering the question, and even goes as far to assert that ” every detail about the payments are in the agreement that’s posted publicly” – an outright fallacy since none of the annex’s or schedules detailing the calculations of these payments have been made available to the public.
I asked Mr. Crebo where I could find those, knowing full well he knew they were not public, and he continued to evade the question by emailing me the PDF agreement between the province and the S2S group, which does not show these attachments. He asked if I had any specific questions about it and I sent him an email, which included a list of questions. This is that email.
Subject: RE: Comment or statement from the minister or yourself.
Date: Thu, 28 Oct 2010 20:51:35 -0700
Yes, Dave, and lets not talk semantics. Where are the schedules, in particular, schedule 10 ? And the annex’s referred to in the agreement that are not included ?
Let me clarify something. I have studied extensively the procurement process with regards to P3 projects in particular.
The ‘ vehicle usage payments ‘ are in fact what is referred to in the industry as the shadow toll and we both know it.
In fact, in speaking to a writer in a newsroom downtown about this story, it was mentioned that they already knew about it too – old news – they said, in fact.
This may be old news to a reporter not wanting to rehash the protests at the bluffs, or to those who don’t want to take the time to figure out how to show it to the average reader, but to every person in BC who has no idea about it, it is indeed “new” news.
In this case, the shadow toll, aka ‘vehicle usage payment’, makes up no less than 10% – and no more than 15% of the total end payment,along with the performance payment and other monthly payments.
You can call it a vehicle usage fee, or a vehicle usage payment, but if one were talking to a room full of students at Sauder school of business about P3’s, one would call it what it is – a shadow toll.
And in fact, that is what many of the s2s partners have been doing, at trade conventions, DOT talks, conferences, etc… even the business kids at UBC have all been taught about shadow tolls in P3 lecture series, in fact, by a fellow from Macquarie himself. Oddly enough, the sea to sky highway was even a case study for the students…..
So,technically is it hidden? Not really, because it is referred to in the agreement. But the details of that are in the schedule which is not included for the public, and considering the growth along that corridor for the next 20 years, and the increase in traffic that goes with it, the concessionaire stands to make a pretty penny, on the backs of taxpayers.
I know about the traffic bands and the relevant amount of payment for each type of vehicle within those bands, which is what would make those sensors needed. Longer vehicles are weighted in at three times the regular vehicles.
-Why were the schedules and annexes not included in the public document? If the ministry still is going to deny the existence of the shadow toll as a semantic issue of word usage,then prove me wrong and produce the documents that spell out the details of the vehicle usage payments – the project is complete.
-What is the ministries position on Macquarie’s assertion the sea to sky highway has a shadow toll ? Can the ministry please explain the difference, if they believe there is one, between a shadow toll and a vehicle usage payment ?
-Considering the ” vehicle usage payment” pays difference rates for the types of vehicles using the highway, and the distance they travel, how is this monitored, by whom, and where is the information stored?
– Are the licence plate readers and microwave vehicle detection systems still in operation, and if so, who monitors, compiles and stores the information, and where?
As of the time of posting, no response was received, and frankly, I don’t expect one, because I think I put it on the line for Mr.Crebo in my last email, as I will for you now.
The BC government is merely playing a silly game of semantics when addressing the issue of shadow tolls.
Technically speaking, the term ‘shadow toll’ is an industry and finance one – and one rarely, if ever, used in the actual financial agreement signed when a P3 deal is closed. For good reason – any time the word toll is used with reference to roads or bridges, the public freaks out! Instead, there are a host of other terms used when referring to the shadow toll payments in these legal documents, as you have seen above, and will see below.
For example, in the case of the Sea to Sky highway,the term used to describe the shadow toll is ” vehicle usage payment” , and Dave Crebo, ministry rep, is using this to confound the issue and refute my story, sadly failing in the process. There are three components to the monthly
performance payment are clearly laid out in the agreement as follows:
– the availability payment (that’s what he refers to in his reply)
– the vehicle usage payment (the hidden toll)
– the traffic management payment (the fee they charge for operating
the traffic control system)
From the Sea to Sky agreement :
The aggregate monthly payments made on account of the Monthly Availability
Payment, Monthly Vehicle Usage Payment and Monthly Traffic Management
Payment components of the Total Performance Payment in respect of a Contract
Year, together with the Safety Performance Payment and DELETED for that
Contract Year, will be adjusted in accordance with Section 32.2 [Annual
The annexes and schedules referred to in the agreement will shed further light on the formula that is used for calculating the usage payment should the government see fit to show the public. In fact, my source tells me that the monthly reports (unaltered from the originals received from Kiewit) will clearly show the three components and the traffic tallies, from which are calculated the usage payment.
Ironically, this “hidden toll” was right in front of all of us, in the contract, all along. Is there a ” shadow toll” on the sea to sky? Not if the ministry is calling it a vehicle usage payment… They are one and the same, and no amount of spin can refute that.
Making the denial on the part of the ministry even more ridiculous, is the fact that the Request for Proposals on the project, spells out concisely what must be included in the bid – pages 33 and 34 of this PDF document details the arrangements.
The ministry stated they will pay a monthly payment based on vehicle usage of the highway, and the bidders were given instructions to propose 4 different traffic bands, state the relevent payment for each type of vehicle in those bands, with the stipulation that longer vehicles must be weighted at three times the level of other vehicles. Bigger the vehicle, the bigger the rate the government pays.
Yes indeed… it seems the BC government is refuting not only the information from my sources, but also the information distributed over the years by partners in the project … as well as their own legal agreements. But just in case any doubt remains, I invite you to look at the following links.
This article, published in 2005 – an excellent read on the Sea to Sky, regardless – talks about the compensation of the operator including “traffic related revenue” http://web.mac.com/rchat//rav/price_files/050900-Project%20Finance.pdf
This paper, produced when Chinese officials came to Canada to learn more about our P3 process several years ago, talks again about the traffic usage payments that make up 10-15% of the total payment….scroll down approx. half the page.. ( oddly enough, this file was titled Franks Presentation in Toronto…) http://webcache.googleusercontent.com/search?q=cache:UkCfDkxSzlAJ:www.eu.gov.hk/attachments/english/sem20060731/10_1420_HyD_Alfred%2520v2%2520(NXPowerLite).ppt+Frank’s+presentation+in+Toronto&cd=1&hl=en&ct=clnk&gl=ca
I could go on, and in fact there are many more documents out there , but clearly the shadow toll revenue paid to the private operator of the Sea to Sky highway is not, and has not been a secret to many. The government simply figured no one would ever talk about it, or no one would ever figure it out.
Sorry to burst the bubble for Campbell, Falcon, Bond and everyone else who was involved along the way… but there is more, much more they have been keeping from all of us.
This lead us to the question of what other projects have these shadow tolls been used with? What other verbal semantics is the government playing with the people of BC?
documentation in the William R. Bennett Bridge agreement shows another traffic related payment being made to the operator of that bridge, in schedule 10, part 2 – enter ” traffic volume payment” in the PDF search terms.
More detail on how that ” traffic volume payment” was to be calculated is in the Request for proposals, which states the monthly payments should make up between 25-30% of the total payment. Here are more details:
The Province intends to make payments for incremental traffic over and above current traffic volumes using traffic bands based upon traffic forecasts. The Concessionaire will receive compensation in the form of a per-vehicle rate, in accordance with the Concession Agreement.
Again, a shadow toll based on traffic volume. It was estimated in this Ministry of Transportation press release, that over 50,00o vehicles used the bridge every day, with that volume to surpass 70,000 by 2017- a hefty number. Should we ever become privy to the rates being paid by our government to the operator, the figure might prove to be staggering. However, as with the sea to sky, those rates and figures have never been released. Then transportation minister Kevin Falcon, was quoted as saying the bridge was : ” an excellent deal for taxpayers as yet another example of a public-private partnership model that outperformed expectations.” Sure Kevin. That is another story in itself, since it has been shown most P3’s can be built cheaper if done entirely as a public project.
There is more to consider when thinking about the Sea to Sky highway, one of the biggest P3 projects undertaken in the province. Something that takes us back to where it all began – the roots of the highway, and the facilitation of the corridor being opened to development and growth for generations to come.
While researching the funding and payment agreements on the Sea to Sky highway, I was directed to an article written entirely about the Sea to Sky highway, that was published in Infrastructure Journal Online – a publication based in the UK, but that is internationally known and read by nature. They provide subscribers the latest and best in date, articles and everything to do with infrastructure and finance around the world.
Appropriately titled: Sea to Sky, Express Connection to the 2010 Winter Olympics, and written by Edward Berry, this article is one of the most in-depth looks at the project I have come across, and an eye opener for more reasons than one.( It was also one that was available to subscribers only.) Although the document is now available through a PDF link online, you can access that PDF article here: 30-32-Sea-to-Sky%20Highway
First of all, it not only mentions the vehicle usage payment- aka shadow toll- I have examined here and in the first story, in a shocking turn of events it also that brings us right back to the current provincial fury aimed at Gordon Campbell and the BC Liberals, the sale of BC Rail.
With the complex nature of the project and
the Olympic deadline looming ever closer;
it was imperative that the procurement
process proceed in an efficient and prompt
manner. Within a few months of announcing
preferred bidder, the British Columbia
transport ministry and the Sea-to-Sky
Transportation Group reached financial
close on the US$498m Sea-to-Sky Highway
Improvement Project on 6 June 2005.
To prove how serious the province
was on pushing through this project at
speed, all the while maintaining a high
level of competition between the bidders,
honoraria were offered to unsuccessful
bidders throughout the procurement
The swift financial close was aided
by a portion of the honorarium being
dedicated to the legal fees of the project
funders. This freed up the work to be done
before a preferred bidder was selected.
Of a total capital cost of US$498m,
the cost of the DBFO component of the
project is roughly US$332m, two-thirds
of the total.
From the sale of BC’s rail
operations, the transport ministry is
investing US$166m in the project – which
is covering the first phase of the project,the
traditionally procured construction work ”
Phenomenal. This article, written in a well-regarded international infrastructure publication, states that $166 million US dollars from the sale of B.C.’s rail operation was used to finance the first stage of the Sea to Sky highway, Phase 1. Could it be true? The BC Liberals have never really come up with where that money went, or why, to my knowledge. The million dollar question.
Unwilling to take this at face value, I called overseas at once, and by luck of the draw, managed to speak to someone before it closed for the day. I confirmed with a senior staff member and the editor, that this was a valid article, that the author had moved on somewhere else several years ago, and the unfortunately they not longer had any sources for the information with them. I confirmed with both the senior staffer and the editor, Kay Scott, that their publication policy is that all facts must be checked and verified with two separate sources involved in the deal, to confirm key points.
With the assistance of fellow blogger RossK from the Pacific Gazette, Mr. Edward Berry was located working at a public relations firm- one that has on occasion done work for Macquarie, the financial advisor to the Sea to Sky deal.
I emailed Mr. Berry immediately asking if he could provide me with the sources for his story, and while he did not remember off-hand – noting he was no longer in journalism and did not keep his notes – if I emailed him the article, it might jog his memory. Of course, I did so immediately, and ( not surprisingly, perhaps) he has not returned my email, nor another in which I mentioned there would be a lot of questions coming his way, momentarily, and that perhaps it would be better to direct them to the person who gave him that important bit of information.
Phase 1 is a portion of the Sea to sky highway project that is rarely talked about, or even mentioned in write-ups about the project as a whole.
Essentially, it was the ” test section” completed under the traditional design-build contract, of which construction occurred prior to request for proposals on the P3 portion of the rest of the highway. The idea was to give engineers some practical experience in building highways in BC, so that they could better estimate the costs of the next phase of work, the P3 arrangement. ( I don’t know if this contract was competitively tendered – I suspect not – but have not been able to locate documentation to confirm or deny how the contract was awarded, although Kiewit’s name seems to pop up often in conversation )
The cost of the test section contract was around $180 million, which, added to the $600 million that Kevin Falcon used for the second part, brought the total to $780 million, the number he liked to quote often as the total cost of the project.
Of course, we know now that the real cost is closer to $2 billion, stretched out over the 25-year term of the concession. But this cost is a mixture of capital costs, borrowing costs, and operating costs, which makes it very difficult to sort out and compare with conventional Design build contracts – I think that was part of the plan. Confuse and diffuse, then deny and conceal.
The information in the article written above by Edward Berry, was given to him by someone closely and directly involved in the sea to sky highway project. I have done the best to my ability to find his sources, but if Mr. Berry cannot, or will not, provide the details of his sources, this at very least provides a new starting point, a money trail that can be traced back. I find it highly unlikely Mr. Berry would post such specific information had it not come directly from someone with the innermost knowledge of the deal.
The implications of this BC rail connection to the sea to sky highway construction, could mean that I, and others long before me, have been correct all along when stating The Key to the BC Rail Sale lies in Premier Gordon Campbell’s beginnings in Real Estate and Land Development.
Clearly, something is amiss in the BC Liberal administration continually refuses to demonstrate its commitment to transparency and accountability. Whether you look at the issue of shadow tolls, or the contentious origins of the funding for Phase 1 of the Sea to Sky highway, both raise serious questions for Premier Gordon Campbell, the BC Liberals – and everyone else involved in the sale of BC Rail and the Sea to Sky highway project.
The public has a right to know how much the Premier and Kevin Falcon committed us to for the next 20 to 35 years on these projects.
The public also has a right to know where all the money from the sale of BC rail went, with proof. Are we driving over it when we go to Whistler?
A wise man once told me to always, always, follow the money. And he was right.
********Update- November 1st,210. – I received a reply from the author of that Sea to Sky article detailing the use of proceeds from the sale of B.C Rail operations for Phase 1 of the Sea to Sky,( the “test” section)
( note of interest: It is May 30th, 2002, and then Minister of Finance, Gary Collins, gives a speech at the Hotel Vancouver, announcing the creation of Partnerships BC, the entity created by government, separate from government, and accountable only to itself, apparently, governed with overseeing and facilitating the P3 sector in British Columbia. Now isn’t that something ? All the same names, in all the right places….. http://www.partnershipsbc.ca/pdf/ministers_speech.pdf)
( note of credit to NVG, a dedicated assistant in this venture whom I owe a debt of gratitude, for his assistance in researching with me, the plethora of information hidden out there on the net, and on government sites . You can read more on related P3 issues on his site Blog Borg Collective)
http://web.mac.com/rchat//rav/price_files/050900-Project%20Finance.pdf – discussion on Sea to Sky, RAV and others.
http://international.fhwa.dot.gov/pubs/pl07001/02.cfm ” Real tolling charges the actual user of the road for the service and convenience of that respective highway, tunnel, or bridge. User charges normally are set to recover the cost of the road project and maintain the predetermined operating condition of that road and are high enough to allow for the private partner’s profit. Shadow tolling, on the other hand, has the appearance of a free road because there is no charge to the actual user of the road. Instead, the government uses other general revenue streams to pay for the cost of the project and the annual maintenance. These shadow tolls are included in the elements of a public-private partnership contract that cover construction, operation, maintenance, and private sector profits. They are paid from current and future revenues. As several European hosts stated, “There is no such thing as a free road.”
” On September 30 2004 the Portuguese government announced its decision to discontinue the shadow toll system in favour of a real toll model. Again, the main reason for this decision lies in budget difficulties: the government’s payment obligations in connection with the shadow toll system are not compatible with the need to spend on improving and maintaining the other national motorways. ”
52 thoughts on “Shadow tolls on Sea to ‘Sly’ highway, the William R. Bennett Bridge,and the BC Rail connection.”
Well done, Laila!
My question is this,
We all know gordie and his clan shant be re-elected, so why hasn’t Ms.James spoken up publically about this sham?
Is this her idea of courting the business sector? By keeping quiet?
I would echo the first commenter above, why indeed does Carole James and the rest of her party keep mum on this and many other matters that they should be telling the public about. That is what they are paid to do and why they are granted those lucrative pensions they are so looking forward to collecting for the rest of their days. Or…is it maybe that they just aren’t capable of understanding the whole process and don’t care to learn meaning that they would then need to spend valuable time on a rather steep learning curve in order to fully grasp what exactly these documents really mean to the people of this province.
Thank you so much for providing us with these documented evidences of malfeasance by the BC Liberal Party. I appreciate you time and the trouble that you have taken to enlighten us all.
Distrust is the confident expectation that another individual’s motives, intentions and behaviors are sinister and harmful to one’s own interests.
People of British Columbia must DISTRUST the Gordon Campbell government.
I wish I was a fly on the wall in Campbell’s office today. Finally someone took this on and I for one am impressed at how well you have outed the entire deal.
What is common knowledge among those in this sector, is finally out there. Much to the dissatisfaction of those large corporate entities raking in all the cash from Campbell, I think you will make more than a few enemies, but have no fear. Many contractors have wanted to see a return to the traditional design build format done for years. Keep our construction dollars in B.C. companies. Hope this one rattles some cages.
WOW – is it ok to send this further afield ?
Send it far and wide and ask radio and TV stations and newspapers why they are not on this story.
Good morning everyone!
Lynn, May, I can’t speak for the NDP, and have no inkling why they have remained silent thus far, unless they take their cue from the media. I’m certainly not a political analyst by far, but thank you for the kind words.
Norman, I really couldn’t say it better than that.
Workforfun, have at it, and please,you never have to ask to send and reprint this work. (Many of you might not know, but this fellow works hard every single day, sending stories about the BC government far and wide.)
There is so much more to this Sea to Sky story, and it doesn’t stop with the tolls. I am trying to find a way to present the financial side of this deal to everyone, in a way that is clear and easy to understand, but it is difficult.
I would recomment that everyone read this article by David Shreck from 2005,
And this article from the Vancouver Island Business Examiner :
For full and complete explanations of the irregularities in how Partnerships BC evaluated the Sea to sky project for its Value for Cost overview.
Shocking to say the least, and indicative of how things can be skewed to present the angle the government wants us all to see.
*** Note, GAB left me a note that Bill T. has an interesting story this morning- Global BC reported last night that John Van Dongan is calling an emergancy meeting this week- details at http://billtieleman.blogspot.com/
Awesome Laila! If I were the idjits that elect alleged crooks like Les out in the Valley of Jesus I would start asking if I were chopped liver. I mean how come we have to pay just to cross bridges into the city to go to work yet the favored Beamer drivers (mostly LIEberals undoubtably) enroute to Whistler or the constituents of the 100% LIEberal represented Orange County (oops) I mean Okanagan have their tolls paid for by people in the tri-Cities, the Fraser Holy Valley, East Van, Surrey, and the Hurtland?
Morning Koot! If I were a Liberal MLA in the okanagan, I would be worried right now.
Here is the thing. There is no such thing as a free road, a free bridge, or whatever. It all has to paid for somehow. And the lack of transparency in these deals is blatantly repetitive. The only reason the government does not want the portion of the agreements detailing the specifics of the ” vehicle usage payments”, or ” traffic volume payments” is because it puts them at a disadvantage in future negotions with other bidders in future or ongoing contracts. Pure and simple. Well, that and the fact that people tend to get angry when they find things like this out. A deception by omission is a deception nonetheless.
In some ways, this can be used for an arguement FOR toll routes in some areas, because then part of the costs are shouldered more on those who use the route, however the negative can be a loss of toll revenue by people avoiding the route altogether. Now, the Port Mann is interesting because clearly, everyone south of the Fraser is going to pay dearly… although residents of Coquitlam and Burnaby are getting significant road upgrades out of the deal!! So, we are paying for their road improvements too.
The more one digs on this issue, the more one finds.
Nice work again Laila;
Phase 1 was completed as a traditional Design Build project. I believe it was done by a contractor from the Fraser Valley. I was unable to find any evidence that the job was tendered. I gave up searching for information in frustration.
But there is another feature of the section completed in Phase 1 that is more troubling. The section is roughly from Ansell Place to Lions Bay. This has been identified as one of the most unstable areas along the S2S corridor. It’s my belief – but difficult to prove – that the real reason for building this section outside the P3 agreement was to remove risk for the private investor/builder. I maintain that the private company feared a massive landslide might occur along this section of the highway and that they may be dragged into a legal battle over who pays. Once the Province signed off on this section that risk was removed.
The types of construction that were tested along this section are not new. There should have been no reason for experienced constructors to need any test data.
Laila, the BC Transportation Financing Authority (a crown corp.) is the government entity that cuts the cheques to these P-3 groups.
The BCTFA March 31, 2009 financial statements (latest online) details the amounts of the annual payments in the “Notes to Financial Statements” at line item 12 “Private Public Partnership Obligations”.
More specifically, line item 23 ” lists the 2010, 2011, 2012, 2013 annual payments in addition to total future payments under their respective contracts for the:
2. Bennett Bridge
3. Kicking Horse Canyon (Hwy 1)
Of course, those payments don’t break down the amount for “annual shadow tolls”.
Click to access 2008-09_BCTFA_FS.pdf
Great investigative reporting, something that our daily’s are lacking, thank you.
Seems as though it is a topic that will require much more investigating and who knows where the tentacles will reach.
Agree with the others that question the quality of our political oppositions ability to expose hidden agenda’s that continue to surface from our governing party.
The major frustration being the lack of credibility that our public officials have. Every thing proves to be a spin and/or a lie (much the same)
Again, thanks for all of your hard work
By Jove, Laila, I think you’ve got ‘im.
This is a great day for bloggers … which is saying a lot, because there have been quite a few great days among bloggers recently! Time for the Jack Webster Awards to add a new category to their annual honours list.
A work of great beauty Laila…to say nothing of value. Let’s hope those who read it, send it to everyone on their mailing lists – and so on. I am for sure.
Unfortunately, the paper I shared your link with last week…has shut down all comments on all issues since then. It’s almost unbelievable how much MSM censors their readers/writers, as well as themselves! Mind, I wouldn’t be surprised to find that either one (or both) of our local MLA’s may have placed a phone call or two regarding my linked comment last week. It sure had people talking at work!
There is a requirement on the part of the Concessionaire to provide a websites, and its NOT the Minister of Transportation responsibility NOR Partnership BC’s.
The full responsibility was written into stone, by the BC Liberals, that the Concessionaire MUST provide the information.
Why aren’t they enforcing their own law on S2S as being the Concessionaire.
However S2S is not the legal name for who the Concessionaire is, use “Sea to Sky Highway Investment L.P”. (“SSHILP”)
25.1 (1) The concessionaire under a concession agreement referred to in section 2 (1.1) (a) to (c) must establish and maintain a website that is accessible by the public without charge.
(2) A website established under this section must include the information specified in section 27 (2) (a) to (c) of the Freedom of Information and Protection of Privacy Act, and must also contain information relating to the following:
(a) tolls payable, including the structure and calculation of tolls payable;
(b) the amounts that constitute toll debts and excessive toll debts as those terms are defined in section 1, including the structure and calculation of those debts and their due dates;
(c) interest rates and other charges and fees, including when interest and other charges and fees will be applied and how they will be calculated and varied;
(d) the dispute resolution procedure referred to in section 20;
(e) the appeal procedure referred to in section 21;
(f) the available payment mechanisms, including registration and account maintenance;
(f.1) the name, contact information and address of the billing organization;
(g) any other matters that are prescribed or required in accordance with the concession agreement.
Out of curiosity Laila…do we know if Campbell has made renegotiation of payments every 7.5 years a part of the contract? As per this from the Observations from the Audit Stewardship article:
“European citizens’ acceptance of the use of PPPs and tolling concessions might be attributable to the government’s commitment to its stewardship responsibilities for public assets. As the experience level has risen, EU countries have restricted the length of PPP contracts to 21 to 35 years rather than 75 to 99 years. This corresponds with the accepted lengths of government bonds, commercial mortgages, and reasonable risk assessments. In addition, several countries include review and renegotiation of payments every 7.5 years to prevent private partners from earning “super profits” from a government contract.
Super profits are profits earned on a PPP contract that are more than could be earned in the private sector, given the same risk environment.”
I think this is definitely something we should know, I also think it’s something this government may have “overlooked,” given their propensity for favoring friends and insiders.
We, the public, don’t need Dave Crebo to answer questions, we need the Minister of Transportation to tell us where She is getting the money to pay the Concessionaire. Is the Executive council, cabinet, cutting health care benefits, education? What is government cutting to make up for the lost revenue?
Is it a sleight of hand fuel tax at the pumps, or is it a mill rate increase on our property taxes?
This highway and the everything around it is a big can of worms for Campbell, and Falcon, because it was all rammed through for 2010. Even the way the did they did the request for proposals was upside down – they said this is what we will pay you, now you tell us what you will give us for that amount.
Just so you know, there is a storm in the Liberals office this morning, due in part to this story and the bc rail information you uncovered. CTV or Global would do well to pick this one up so all of BC can see how dumb the government thinks they are.
WOW! Wonder Woman!! You are truly a Gem. There should be an Honourarium, or something to reward you for your hard work and dedication. Come on Norm Farrell, you should know how to instigate this.
I think I can provide some more (sadly, heresay) on the Test Section. I’m on the edge of my seat! Go Girl, GO!
Hearsay often leads to concrete facts when one knowns where to look and who to talk to. You know where to find me Mr. Aghast! Next time you are in town, we’ll sit and chat, no?
The world has changed with the internet, it opens up a whole new realm to people searching for answers otherwise hidden and not available to them.
This is the case for me as it is how I came upon you and the work you are doing here.
I am appalled that mainstream media has not seen this for what it is, very important and shocking news that should be on every newscast and in every paper in British Columbia!
It isn’t as though they aren’t aware,Shame!
I appreciate all your time and effort devoted to this Laila, and I suspect so will thousands of taxpayers in B.C.
All the best
Good work Laila and everybody that gave her a hand. This is the type of work that will need to be done every day to keep politicos like we have now from lining their s and their friends pockets at an alarming pace. Who knows with recall maybe some will start to pay attention and ignore pressure from certain campaigna managers and the like with hidden motives, like hi-jacking a railroad.!!! Among many others.
Go, Laila, Go!
Go, Laila, Go!
To prove how serious the province
was on pushing through this project at
speed, all the while maintaining a high
level of competition between the bidders,
honoraria were offered to unsuccessful
bidders throughout the procurement
“Honoraria”?? Now, are they talking about the highway here, or the railway? If the latter, or even if the former, that word “honoraria” sounds a lot like the government was bribing bidders, so as to “maintain a high level of competition between the bidders”……
“Business as usual”…..I remember that phrase being tossed around in the wake of the Raids, by MSM pundits who were trying to rationalize the whole system of backroom deals and “friendly largesse”…..
Right on Laila! Keep up the good work. As a member of the S2S community, and also one who worked on the project, I have always had nagging doubts about the background of the ‘deal’. Things just didn’t add up. I appreciate your ‘bulldoggedness’. Thank you
With all the new information that is surfacing, one wonders whether or not, Canada Revenue Agency should be taking an interest and look at what has transpired. Should there have been federal taxes paid on parts of these “transactions” or dealings ? If so, was adequate and correct information presented to CRA? Going by the BC Liberal government’s record thus far, it seems highly unlikely that proper and acceptable book keeping has been done.
Another can of worms for Pinocchio Campbell and the BC Liberal government ?
Outstanding work, Laila and friends! passing along down the grapevine…
I just want to chime in with my thanks to you for the work you have done on exposing this issue, and the good work you do on this blog. The unwillingness of the msm to do this kind of investigative work – all the while bemoaning their declining viewer and readership – is truly sad. It doesn’t surprise me that the likes of Good, Palmer and Baldrey deride blogs like this as the “lunatic fringe.” You, along with BC Mary and others, are showing them how journalism is actually done.
Wonderful work, Laila.
You dig deep and you persevere when it comes to research ….and it shows.
(NVG is another great researcher as you note here.)
Outstanding article – I love how you are bringing the puzzle pieces together .
Great work Laila. I have forwarded your site to friends. We must not let up on the shenanigans and deceit this government has imposed on all citizens. And the costs, the true costs, when we see the suffering of seniors, children, poor people and the list goes on. What can be worth that much as to watch people suffer! Shame on them all !! We must all participate in exposing them all.
Congratulations to you.
Another superb effort Laila!
As part of their election platform, all incumbent NDP MLA’s should immediately commit to a formal inquiry into all the major infrastructure projects that the Campbell government initiated during their Regime.
They must be very vocal about this commitment, in addition to an essential formal inquiry into the give-away of BC Rail. If my MLA fails to pledge to this request, I will be casting my vote elsewhere.
Laila, the following project report, reviewed by the auditor general, is the best that I can find in terms of understanding the financial complexity of the S2S.
More importantly, it also includes the forecast “volume usage payments” (shadow tolls) for each and every year right up to the final year 2030 for the S2S.
BTW, they also calculated a NPC of the S2S improvements under the PSC (design-build) and DBFO (P-3) options as $744 million and $790 million respectively as at December, 2005.
Click to access SeatoSkyFinal_VFM.pdf
Thought you might like knowing your story made the rounds in the black tower, and DAMN! You got em good, girl.Don’tcha love it how your story made the midnight news?hehe. They got nothin on you sweetheart, nothing at all. You got billy boy stomping mad, dontcha know? Cause you’re a blogger and all that… heehee.
Just wanted you to know me and a whole lot of others think you should be sitting in the big boys chair hun. Hes getting old and if they want to keep this dial going, they’ve gotta reach out and get the people who you touch with your stories. Imagine. The Laila Yuile show. We can dream, girl, we can dream big. Keep it comin.
I see this is all on BC Mary’s site ‘legislature Raids’ as well!
I even saw a Russian site talking about it. Can’t wait so see it everywhere!
The dates of these affairs is simply too much to ignore as to tie in B.C. rail sale and everything is starting to be clearer of how it all fits together.
There certainly is cause for a public inquiry and possibly another trial where no ‘sacrificial lambs’ can be offered up other than Mr.Campbell himself!
All this at the start of recall, timing is everything.
Good work and good luck!
Way to go Laila!! You and BC Mary repeatedly make me proud to be a woman.
Something interesting while researching crime in this province tonight about the RCMP struggle to deal with the crime and corruption in this province. You will recognize the Judges name. I ask that you please forward this to B.C. Mary for her sight if of any importance:
This all makes authorities’ failure to curb the growth of crime that much more troubling. Police and prosecutors have faced multiple setbacks at the hands of the courts recently. Few of those arrested by police for growing marijuana actually serve prison sentences. Meanwhile, the biggest blow came in March when prosecutors lost a case that would have seen the Hells Angels declared a “criminal organization.” Police spent two years and $10 million trying to prove that David Giles, a member of the Hells Angels East End chapter, and two co-accused had been involved in trafficking cocaine. B.C. Supreme Court Justice Anne MacKenzie acquitted Giles, saying the evidence against him was “weak.” At the same time police say existing legislation hampers their probes of major crime figures.
Interesting isn’t it! If anyone requires a link to where this came from please request it here and I will gladly post with details.
WTF? I’ve spent ALL DAY reading blogs – Alex Tsakumis, Gabriel Yiu, Tielman, even Arleigh Chase, and have come to the aphoristic conclusion that there MUST BE a Public Inquiry. Could not one of those erudite scribes commit to writing a book about these shenanigans and use the proceeds to finance a Public Inquiry. Perhaps we could involve a US entity so we could use the US Court System (ala Conrad Black) to get to the heart of the matter. Youse guys (particularly Brian Keirnan) are absolutely fearless. I hope you all have Mossad connections, just in case.
For sure , I’d love to sit and chat!
[…] This post was mentioned on Twitter by BC First Party and Blake MacKenzie, Peter Kelly. Peter Kelly said: Shadow tolls on Sea to ‘Sly’ highway, the William R. Bennett Bridge,and the BC Rail connection. – http://t.co/uWqKR0b […]
I think there may be at this time a need for a news website for B.C, as there are too many issues, a gathering so to speak of people such as Laila, Mary, Raif etc. etc. etc. A ‘Truth B.C.’ site where all issues can be documented and explored.
MSM is falling down on the job horribly and is almost useless as news sources of real issues.
The internet is fast replacing video outlets, retail stores and how people live their lives and purchases.
We could be on the forefront of internet news which I believe time has come.
I am now seeking all my information this way as I see are many others.
Is there anyone here with some expertise on how this may be accomplished?
Hi everyone, I’ll be here to comment shortly, I’ve been sicker than a dog overnight with a cold that came on really fast yesterday, hence the lack of presence here.
See you soon!
Would love to take a look at the South Fraser Freeway Contract. Bet there are clauses in there with similar usage fees and note the financing for the South Fraser Freeway seems to be tied to the HST transfer payments from the Federal government, in a similar manner to the Sea to Sky financing being linked to the sale of BC Rail.
Which begs the question who are the Campbell Liberals accountable for with all this Highway Infrastructure financing? It is sure not the ordinary taxpayers and citizens of this province as between the upfront tolls, the shadow tolls and all the cuts that are being made to social programs we will be paying, and our children, even our children’s children will be paying for these roads for a long, long time to come.
Wise investments? Well the Port Mann Bridge Project was such an unsound deal, that they couldn’t even get a P3 deal for it. No private investors would touch it. So why did it make such good sense for the province to take it on increasing our deficit.
Now the new Port Mann and Highway 1 expansion are to be financed by tolls, but as the Golden Ears Bridge is proving, those revenues cannot be counted on. In fact as Tod, I think it was pointed out in comments elsewhere in this Blog, once the South Fraser Freeway is built people will be using it to escape tolls by way of the Patullo Bridge, Alex Fraser and the Tunnel. Thereby increasing congestion at those choke points, which puts a lie to the government line that the South Fraser Freeway is being built to relieve congestion.
Living in Bridgeview we already knew that was a lie or myth to put it politely because as my daughter (at age 10 or 11) astutely pointed out – “There is no traffic in Bridgeview mom. We are never on AM730”. Out of the mouths of babes…but once the South Fraser freeway is built there will for sure be traffic in our neighbourhood, thousands of trucks – brought here by a freeway that the Minister of Transportation ironically claims is being built to get trucks on highways and out of neighbourhoods. Conveniently she forgets to mention while the trucks are being put on freeways to get them out of neighbourhoods, the freeways are being put in neighbourhoods, like Bridgeview, Bolivar Heights, Fraser Heights, Sunbury, Annieville etc.
And the traffic congestion “myth” suffers even further now that it is being revealed that the plan is to build intersections instead of interchanges along the route. For crying out loud a few interchanges at current choke points, and some lane widening along the existing route – at a cost of a few hundred thousand compared to $1 to $2 billion and there wouldn’t be any congestion to worry about.
Keep up the good work Laila, exposing the lies, oops myths and delusions of Campbell’s Liberals. It is great to see that reading your blog has opened a lot of eyes. So make sure you get yourself good and healthy, don’t overdo it you are needed and appreciated.
Looking for something to do today? You want to have more information about just who is the Concessionaire and who represents the Concessionaire?
Keywords to use when looking on Google are these:
Sea to Sky Highway Investment L.P. aka
Sea to Sky Highway Investment Limited Partnership
The sixth hit down on the long version search gives what appears to be an oddball result:
Scott Marks – Canada | LinkedI
BUT, there’s this inside:
“Director of Finance”
Sea to Sky Highway Investment Limited Partnership
November 2005 — Present (5 years 1 month)
Acting as the Director of Finance for the Concessionaire (Sea to Sky Highway Investment L.P. (“SSHILP”)) in British Columbia’s first highway infrastructure Public Private Partnership (P3).
SSHILP, as per the terms of its contract with the British Columbia Ministry of Transportation, is responsible for constructing, through its DB Contractor, Peter Kiewit and Sons Co., certain improvements and modifications to a 99-km stretch of the Sea to Sky Highway between West Vancouver and Squamish before September 2009. Additionally, SSHILP, through its OMR Contractor Miller Capilano Maintenance Corporation, is also responsible for operating, maintaining and rehabilitating the highway until 2030.
(Note: services provided through Struxi360 Capital Managers Ltd., my wholly owned corporation.)
In other words S2S aka Miller Capilano Maintenance Corporation is not to be the source for creating the required Website, that responsibilities lies solely with Sea to Sky Highway Investment Limited Partnership to provide,or at the very least provide the name of their website.
Finally, the buckleys has kicked in enough I can type for a bit.
May, Lynn, and anyone else wondering what the NDP is up to, they have submitted some FOI’s on this, and news 1130 interviewed Harry Bains, waiting for some more info before taking the story to air.
The Squamish Chief has a story coming out in its Friday paper edition, should be online before that, possibly today.
Ray, I can’t find anything on that section with regards to tenders either. I did find a PDF that I have saved to disk, that shows Kiewit doing the work, but am not sure if this is that phase 1, or what? Then there is this link, which mentions the test section :
Click to access capital_project_plan_011504.pdf
” The preliminary stages of procurement have commenced, including starting
construction on a test section south of Lions Bay to gain specific knowledge of
geotechnical, constructability and traffic management issues associated with the
project, and issuing a Request for Qualifications for construction of the remainder
of the section between Ansell Place and Lions Bay. Procurement for the
remainder of the project is to be initiated shortly. The award of major
construction contracts will occur subsequent to receipt of an Environmental
Approval Certificate. ”
Then there is this bit on Emil Anderson’s site- another favoured contractor of the MOT and government in general ,they did a lot of work on 2010 projects in the Whistler area. :
” Sea to Sky Highway Test Section
The Test Section was a particularly difficult piece of the Sea to Sky Highway, which runs from Vancouver to Whistler. The original design called for the narrow, 2-lane section to be expanded to four lanes by constructing a split grade alignment with retaining walls at both the outside and centerline of the highway. The project was constrained by a high bluff on the uphill side and the railway below.
The project utilized the Alliance contract model in which the owner, designer and contractor all have a stake in the outcome. This model encourages innovative approaches and opportunities for re-design while construction is underway. After a short period on site, EAC recognized a significant opportunity to redesign the project.
The entire project was redesigned and the split-grade alignment was eliminated. Various downslope retaining walls were used to create room for the additional two lanes of traffic.
The Test Section project was completed on time and realized a 30% savings in construction cost due to the redesign. The techniques pioneered by EAC on the Test Section have been utilized on the balance of the Sea to Sky corridor upgrades. The project won a Deputy Minster’s Award for Specialized Engineering Services. ”
And this link: http://webcache.googleusercontent.com/search?q=cache:4HhwH5FTRUsJ:www.allbusiness.com/sports-recreation/amateur-sports-olympics/12705111-1.html%20seat%20o%20sky%20%20%20test%20section
There doesn’t seem to be a lot on that sectionin terms of finances, and since BC rail money was said to have financed it, no wonder.
Thank you for those links, I’ve only been able to look at them briefly- this cold is a killer- but will spend some time on them this afternoon. So much information has come in on this and it takes some quiet time to review it all, which is how I caught this bloody cold in the 1st place- not sleeping enough…lol.
Leah, I don’t see any renegotiation in the agreement anywhere, and I doubt the government here is going to go there.
BC is relatively new to the Shadow toll mechanism, whereas it has been used all over the world for longer. Other countries have since learned the disadvantages associated with shadow toll payments on long term P3’s, such as Portugal. They stopped using shadow tolls in 2005 because the expense of the long term payments on so manyprojects, became a financial burden to the country. Right now it looks like we are paying shadow tolls on the Sea to Sky, the kicking horse( haven’t had time to dig into that one deeply) the William R bennett bridge and possibly the SFPR might have one cooked into the deal too.
May not seem like much now, but the combined payments over 2 to 35 years on all projects can become quite a monthly/yearly budget killer if employed on too many projects at one time.
Don, cfvua, and everyone else, thank you for the kind words of support, and thank you for passing it along. Everyone reading should be contacting their MLA’s for answers to the questions we are asking here. There is much ado about something here, and I’m going to find out what it is.
John, no worries, we take care of each other, we really do.
Todd, more links I see, I will have to look at these some more to see what I can get from them. My concern is the accounting practices the Libs use, which as we all know, are irregular and not standard. They seem to deviate this way an awful lot!!
Bernadette, the SFPR is still on my hit list,you know it. Although I am quite sure the MOTI has been busy the last few days, making sure there is nothing to find. That’s the great thing about sources and the net. Can’t hide everything all the time!
I do find last nights emails from the MOT interesting,they seem to be working late a lot, the last couple of weeks…
[…] research has shown that 'shadow tolls' are being paid on the Sea to Sky highway https://lailayuile.wordpress.com/2010/10/31/shadow-tolls-on-sea-to-sly-highway-the-william-r-bennett-… and one wonders what Translink of the provincial government is paying to operate the […]
There is that Chinese connection again. Plus that article that says the road building is part of a Pacific Asian Gateway… so who really benefits from all of this? Not us regular taxpayers that is for sure.
“Of a total capital cost of US$498m, the cost of the DBFO component of the project is roughly US$332m, two-thirds of the total. From the sale of BC’s rail operations, the transport ministry is investing US$166m in the project – which is covering the first phase of the project, the traditionally procured construction work.”
The above is in US dollars from the UK magazine. We all know that we got Value for our money LOL, the US $498 million translated into $600 million CAN….
From this BC government website link: http://www.bcbudget.gov.bc.ca/2004/bfp/bgt2004_part1-tb_bcrail.htm
Colin Hansen, or rather it was Gary Collins who gave the public a break down on how the monies from the sale of BC Rail was spent, by him, but first, he was there to receive the monies from CN Rail. The Finance Minister says this:
“CN will pay the Province $1.005 billion for the opportunity to operate the freight railway.”
“Proceeds from the investment partnership will be used to establish a $135 million Northern Development Initiative to support investments related to forestry, pine beetle recovery, transportation, tourism, mining, Olympic opportunities, small business, economic development, energy and sustainable communities.”
From my reading of that paragraph it appears that the $135 million in Canadian Funds was used to “support investments”, ten of them, which I’ve highlighted in bold printing above.
A lot of items, not much money especially when one considers that the TRANSPORTATION section alone eg. Sea to Sky, gobbled up $166 million in US Funds. Shall we round up and make it $200 million in Canadian funds
And then all of a sudden, Collins, or maybe it was Campbell, decided to scoop an extra $200 million from the sale of BC Rail for ……. Transportation… Sea to Sky.
“Development Initiative and the First Nations Benefits Trust, to authorize applicable expenditures and the transfer of proceeds from BCRC to the Province. The payments to the Northern Development Initiative and the First Nations Benefits Trust will represent an expense in the year they are made. In addition to funding these initiatives, $200 million will be provided to the British Columbia Transportation Financing Authority (BCTFA) for the multi-year capital program. This BCTFA transfer represents the redistribution of cash from one part of the government reporting entity to another, and has no impact on the government’s bottom line.” Yeah but you’re still stealing it from the sale of BC Rail buddy.
“BCRC and the Province have provided commercial indemnities to CN with respect to the purchase of the subsidiary and partnership, including indemnities related to tax attributes. BCRC and the Province, based on independent legal advice, believe there is a very low risk these indemnities will be called upon.”
Great work NVG, excellent, because as you and I have disussed, as well as Ben Meisner and I, my firm belief is that the only reason BC rail was sold was to fund not only the first portion of the Sea to Sky project that was not part of the P3, but to also fund other initiatives related to the 2010 bid, as well as other transportation initatives… like perhaps the RAV line, the Golden Ears etc… all which were fast-tracked for the Olympics. And recall, that I located documents from the goverment that also referred to the Golden Ears as an Olympic iniative, to get people across the river and to the West Coast express, moving people etc…. https://lailayuile.wordpress.com/2010/08/18/was-the-construction-of-the-white-elephant-golden-ears-bridge-about-connecting-communities-or-was-it-a-2010-olympic-iniative/
People poo-poo’ed that document, and my suggestions, but recall well how many of these projects that were planned previous to the bid, suddenly came to fruition before the games opened…. and at a great cost to this provinces financial future.
Another excellent point you are pointing out is that none of this debt is considered a liability until the year it is reported. So, even though the province may owe.. .say billions and billions over the life of the Sea to Sky, for example, in availability and shadow toll payments( remember they call them traffic usage payments in the agreement), and we are on the hook for it on paper, they dont consider all that debt to be debt, until each years payments are done! Nuts. Like trying to say that even though your mortgage is 500K, its not really considered a liability or debt until each payment comes due. Bonkers.
Yes, I do believe that BC rail was sold to finance this whole bloody mess of projects, and while they may have tucked some money here and there for other purposes, winning the bid for 2010 was the only thing that mattered in the end, and the government was willing to do anything to make that happen. It was to be Campbells crowning glory, and his developer friends best case scenario… all that property…
[…] Stunning findings to some, but not to myself and others who have called for similar audits on more recent P3 projects such as the Sea to Sky highway, the William R. Bennett Bridge and the Canada Line. […]
[…] Sometimes it is taken through no-bid contracts and sometimes through secret payments as in shadow tolls. Other times through arrangements hidden within complex business deals where private companies use […]
[…] Sometimes it is taken through no-bid contracts and sometimes through secret payments as in shadow tolls. Other times through arrangements hidden within complex business deals where private companies use […]
[…] tolls paid by everyone in BC, on the Sea to Sky highway, disguised as ” Vehicle usage Payments” https://lailayuile.com/2010/10/31/shadow-tolls-on-sea-to-sly-highway-the-william-r-bennett-bridgeand… AND scroll down on this link to the full series […]
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