Via Rail has recently had its operational budget cut in the last federal budget. The service which one of the last publicly owned rail companies in North America is in need of investment and a new way of thinking. One proposal that I have for Via rail consists of the Oil Sands, environmental sustainability and moving large numbers of people.
The Oil sands is now one of Canada’s largest employers with a huge number of people being brought in and out of the communities by air. It costs massive amounts of money to move these people and the cost will continue to rise with the increasing price of gas. In many cases companies will pay their employees trips to fly to and from their home community to work. This can become a huge expense for companies and I’m sure that many of these companies are looking to cut these costs. One of the ways that the employers would likely be able to see savings would be the to move these people by rail to and from the major urban centers. Flying them into cities like Edmonton and Calgary and then having them jump onto a train to connect to the Fort McMurrary could be cost efficient. When it comes to moving people and items the cheapest forms of travel are by sea and by rail. It would only make sense that these companies look for new ways to get a large number of employees into work at a single time. As it stands now a seat from Edmonton to Fort McMurrary is around $202 and from Calgary is $244. While both prices are reasonable this flight is only the last hop in a trip that may have taken people across the country. A flight from St. John’s, Newfoundland ranges from $714 to $1,096 for a one way trip. Weather delays are also an important factor to consider when a company looks to get his work from point A to B. Living in Canada we experience snow for a considerable period of time. Snow, ice, sleet, all cause delays to a system which is already consistently delayed due to overcrowding and congestion. Delay’s like this can cause problems for scheduling and cause extra wage related costs which will affect a companies bottom line. While delays can and will happen to a rail based system they can be fixed to make sure they happen on a limited occasion.
The proposal that I have in mind works with these oil companies and suppliers to bring rail service to the north and change how they move their people. Getting these people out of a plane/vehicle and into rail car could help to reduce the environmental impact that these companies have. It could also have a positive impact on Via rail as it looks to different sources of income to reduce the impact of budget cuts. The proposal would be as such:
– Companies interested help to help pay for a rail system from Calgary – Edmonton – Fort McMurray. They pay a percentage of the cost to install the rail line to bring the service to the north.
– Companies can purchase a rail car or a number of them and their employees get cheap rides to Fort McMurray or can pay a percentage and get a reduced rate for employees.
– Cars purchased would cost around 3.33 million or invested in would be 60% of the cost or 1.98 million.
– Via along with the companies would own the tracks and could allow companies like CN or CP access for a fee. Via would collect 51% with the other 49% being divided up by the other investors.
– Priority would be given to trains with investors employees.
– Cars purchased or invested in would serve as a mobile ad space for those companies.
A working relationship could be started with Go transit to purchase cars at the same time they are to reduce the costs experienced by both users. Reducing the cost could help to improve the number of investors willing to bring this project online. The savings will also need to be there as well for the companies and Via rail. Making money from this endeavor will also be important to VIA rail as it will help to reduce the cuts from the most recent budget. We would need to see that saving so lets look at the estimated costs associated with this project. The distance between Edmonton to Fort Mcmurray is 434.8 km and the distance between Toronto – Montreal is 542.4 km. Roughly the same with the GTA trip being about 100 km longer then the oil trip would be. The costs for this trip is $109 to a maximum of $264 which could be a significant savings for business owners. The cost per km for this route is 0.20 cents, so removing 100 km would reduce the price of a ticket from $109 to $89 or $244 for the most expensive seats Via offers. This savings could be massive for a company $122 dollars a trip will add up quickly and with the added savings in the purposal it could be even more. Consider this, a person works 2 weeks in and 2 weeks out which means that they are making 4 trips a month. 4 trips by plane is $844 but using our rail numbers it could be $356, a savings of $488 a month. Going to a grander scale that could be $5,368 annually back into the companies pocket in savings. If that employee was to continue working with the company for 10 years it would be $53,680 a number which could purchase someone a brand new vehicle in cash.
One of the questions would need to be: How much does the rail car cost and when would I see it pay itself off. If Via decided to go with the same coach produced by Bombardier for Go transit it would cost around $3.33 million per vehicle. One of these rail cars is able to hold 150 people inside comfortably. This means that on average the savings needed to break even on the rail car purchase would need to be $22,200 or just over 4 years continual ridership for each one of those 150 people. With 30,000 commuters to Fort McMurray this could conceivably be a viable option for the future of transit in Alberta. The federal government has worked to make more projects P3 of a public/private partnership and this would be a prime example. There is obviously cost savings available to the energy companies and with a huge push on to make them seem more environmentally friendly then this could be a great option.
What do you think?
Open minded Millenial perspective - OMMP 