Tuesday, October 30, 2012

Island Corridor Foundation has 2 of 5 regional districts on board

The Island Corridor Foundation managed to get $15,000,000 in funding from the Federal and Provincial governments for needed repairs to the rail line but they need another $3,200,000 from local governments to make it happen.

There are five regional districts that would need to contribute and their populations in 2011:

  • Capital Regional District - 359,991
  • Regional District of Nanaimo - 146,574
  • Cowichan Valley Regional District - 80,332
  • Comox Valley Regional District - 63,538
  • Alberni Clayoquot Regional District - 31,061

The contribution they are looking for is $0.43 per $100,000 of assessed value per year for five years.   For a $600,000 house in Victoria this is $2.58 per year for a total bill of $12.90.

So far the Alberni-Clayoquot and Cowichan Valley regional districts have approved the tax, 16.3% of the population and likely representing less than 10% of the assessed value.   The bulk of the contribution will come from the Capital Regional District.  

The CRD has the highest assessed values and 52.8% of the population.  The buy in by the CRD is crucial.  

Should all five regional districts agree the ICF will then have $20,900,000 to work with which includes $500,000 from Southern Railway of Vancouver Island and debt or fundraising of $2,200,000 by the ICF.    The question then is who pays if there are cost overruns?  

The investment is clearly needed to ensure that the tracks can be used, but the odds of a 20-30% cost overrun is very likely given the track record of transportation infrastructure projects.   Where would that  $4,200,000 to $6,300,000 come from?

I am not trying to be negative about the E&N but it worries me when the planning does not seem to be fully thought out.   There has to be a clear plan to raise extra money because you can almost plan on there being cost overruns. To pretend that they will not occur means someone will be asked to come up with the shortfall because a crisis point is reached.    I suspect that it will be the local governments that will have to come to the rescue.

To get this phase of the rail line work completed is going to likely need all the regional districts to approve a second round of taxes twice as much per $100,000 of assessed value as is being asked for now.   I am not sure from where else the money could come from unless a new government in Victoria next May grants the ICF another $7,500,000.

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