Photo: Chinatown in
Toronto
Toronto has a difficult challenge. The local government is caught in a disruptive battle over whether they should move forward with a subway plan or a light rail transit plan. “The capital cost of the Sheppard line extensions will have to be covered mostly from the fare box. The extensions will be viable only if there is development in the vicinity of stations that yields sufficient transit riders to provide needed fare revenue.”
It would be prudent to apply basic business principles to transit development summarized below:
1. Develop a comprehensive 35-year business plan.
2. Include amortized capital costs and operating costs.
3. Identify sources of revenue.
4. Estimate urban development necessary to generate fares to cover capital and operating costs.
5. Estimate subsidy required if urban development does not happen.
6. Establish a time limited development agency to assemble land and deliver project.
References:
James, Royson, End of the line for mayor’s transit plan, The Star, March 23, 2012
Gilbert, Richard, It’s time for a businesslike approach to transit projects, The Globe and Mail, May 2, 2011
Photo Credit: Dylan
Passmore from Toronto, Canada under the Creative Commons Attribution 2.0
Generic license.
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