LATER this month, three consortia of mainly private-sector companies will be issued with the Request for Proposals (RFP) in the next stage of the tendering process for the largest infrastructure project that Canada has seen for many years: the High Frequency Rail (HFR) programme to connect Toronto, Ottawa, Montreal and Quebec City with electric passenger services that through a combination of shorter journey times and more frequent departures are hoped to encourage modal shift and cut carbon emissions.
HFR is a public-private partnership (PPP), and the winning bidder will co-develop the project and then enter into a contract to design, build and partially finance the new network, and subsequently operate and maintain it for a period of 30 to 50 years. The Canadian government has allocated $C 400m ($US 295.7m) for work on key project activities over the two years from 2022-23, including the current procurement phase.
Having launched the Request for Qualifications (RFQ) stage of procurement in February this year, the government’s transport agency, Transport Canada, announced in July that it would be inviting Cadence, Intercity Rail Developers and QConnexiON Rail Partners to proceed to the RFP stage. Cadence brings together CDPQ Infra, SNC-Lavalin, Systra Canada and Keolis Canada, while Intercity Rail Developers comprises Intercity Development Partners, EllisDon Capital, Kilmer Transportation, First Rail Holdings, Jacobs, Hatch, Cima+, FirstGroup, RATP Dev Canada and Renfe Operadora. QConnexiON Rail Partners is made up of Fengate, John Laing, Bechtel, WSP Canada and German Rail (DB).
“We’re very pleased with the three consortia that we have shortlisted and the interest that there has been in the market,” says Mr Vincent Robitaille, assistant deputy minister for the HFR project at Transport Canada. “We are expecting to launch the RFP probably towards the end of September. The RFP will last about nine months or so and we’re expecting it to close in the early summer of 2024. Our goal is to select the best partner for Canada to finalise the development of the project and then eventually go into construction and operation. We’re asking all the teams to develop a solution where the trains operate at up to 200km/h, and another that would be more ambitious in terms of shorter journey times, and that would include faster trains but also other actions that could be taken to reduce journey times.”
The three prequalified bidders will also have to submit their plan for co-developing the project with Via HFR, a new, wholly-owned but arm’s-length subsidiary of national passenger operator Via Rail that has been created to manage the development and delivery of the HFR project. “It’s both the what and the how,” Robitaille says. “We’re going to select a partner based on that, and then working with them we’re going to narrow down the precise solution that will be built and that will include the best ideas that come forward.”
“We’re very pleased with the three consortia that we have shortlisted and the interest that there has been in the market.”
Vincent Robitaille, assistant deputy minister for the HFR project at Transport Canada
Robitaille points out that each consortium will receive what he describes as “a fairly substantial bid fee,” which will include a licence payment enabling Via HFR to make use of the intellectual property contained in their proposal. “It’s possible that we will use some ideas from different bids in the actual project at the end, in order to generate additional benefits,” he says. “Our goal is to get the best project for Canadians.”
“We expect that co-development is going to take four to five years after we have selected our partner,” Robitaille says. “We’re expecting to sign a contract by the end of 2024 so construction would start towards the end of this decade. We’re going to be looking at opportunities for some early works where it makes sense and where it’s possible to accelerate delivery.” This may see the first HFR services introduced earlier than Via HFR’s aspiration to have the first trains running by the early 2030s.
Competitive process
As Via HFR is using a competitive process to find the best partner to develop and then execute the project, its cost, alignment, technical specifications and operating strategy have not been precisely defined at this stage. “It’s too early to set a specific budget for the project because we’re looking at different options,” Robitaille says. “But just due to the scale of it, we’re looking at about 1000km of right of way, we’re talking about a multi-billion-dollar cost for a project of this size.”
“We’re looking for a private partner who is the ultimate implementer of the project,” says Mr Graeme Hampshire, project director at Via HFR. “We’re expecting the private partner to take full revenue risk and operating cost risk for the operating phase. There’s also an element of construction cost risk that we’re expecting them to take during the construction period. There will be contributions shared between the government of Canada and the private partner in that phase.”
“We’re involving the operator right at the beginning of the process, which we think will bring efficiency in terms of concentration on what we are actually going to be providing for passengers and Canadians at the end of the day,” he says. “We’re not starting off with building an engineering edifice, we’re starting off with the design and construction of a passenger service business. And we think that this approach from the outset leads to efficiency of design.”
“Typically, on a project of this nature, the alignment will have been precisely defined,” Robitaille says. In contrast, the final alignment for HFR between Toronto, Ottawa, Montreal and Quebec City will be determined during the RFP process and the subsequent co-development phase on the basis of acceptable options identified by Via HFR and the alternatives proposed by the bidders. “We’re doing it this way to have the maximum innovation possible,” he says. “From an operator standpoint, what is the best service pattern, marketing and customer value strategy to get as many people as we can shifting from cars and planes to rail in the corridor.”
“We’re involving the operator right at the beginning of the process, which we think will bring efficiency in terms of concentration on what we are actually going to be providing for passengers and Canadians at the end of the day.”
Graeme Hampshire, project director at Via HFR
“We have minimum requirements that need to be met,” Robitaille continues. “There are specific calling-point cities that need to be connected. In some of the cities we have a preferred station location, for example Union station in Toronto or Central station in Montreal. In some areas there is really only one option, for example going into Ottawa where the track is already owned by Via Rail, that is by far the best. But in many areas, there can be different rights of way, like an abandoned rail corridor, an existing rail corridor that could be expanded, or other industrial corridors that could be used.”
Via Rail was first created in 1977 to take over the passenger operations of then state-owned railway Canadian National (CN) and private railway Canadian Pacific Railway, and today its services operate almost entirely on CN infrastructure where freight traffic takes priority. “The genesis of this project is not in terms of a particular journey time, but a particular level of capacity,” Hampshire says. “The need for more capacity is being dictated by the fact that the railway as it exists is basically full, and Via Rail trains need to fit in with the needs of the infrastructure owner.”
“So while you are in a way constrained by where the existing freight lines run at the moment, we’re not saying that those are the only options that are available,” he says. Bidders will be invited to use their “skill, expertise and judgement as a passenger business developer” to suggest an alternative. “We are providing significant optionality, but ultimately the decision will be joint,” says Robitaille. “We fully expect that some adjustments will be necessary even with the retained proposal, but connecting downtown to downtown is essential.”
Once the final route is determined, it will fall to the public sector to acquire any necessary land. “Part of the public contribution to the PPP is the provision and acquisition of land,” Hampshire says. “The partner needs to identify it and will be responsible for providing a significant amount of the effort towards obtaining the footprint, but ultimately, it is a public activity.” Robitaille adds: “our preferred approach is to conduct negotiated land acquisition. We do have legislation to expropriate land if that becomes necessary, but to every extent possible in previous projects we’ve significantly limited the use of these powers.”
Service level
The level of service that HFR will provide is also largely for the bidders to develop. “In terms of trains per hour, we’ve started off with providing not quite an hourly service, but of that order,” Hampshire says. “We’d be looking for the private sector to better that. We’re not going to do timetable development for our three bidders. We’ve got an idea of where we start and where we would be as the business matures.”
“This is about capacity, it’s about modal shift from both air and from road. And the better the product, the more capacity will be required and therefore the increased frequency will be needed,” he says. “One of the project outcomes is to significantly increase ridership. It’s about 4.9 million a year at the moment, it depends on the origin and destination pairs, but we’d be looking to triple that in the middle of the project.”
Robitaille says that the objective is to get traffic to around 17 million passengers a year by 2059, “and then it would keep growing. Just on our base case, about 40% of the ridership would come from other modes, like planes and cars, and the rest would be people already taking the train who would use it more.” Hampshire adds: “Our revenue forecasts were done several years ago, and they’re in the process of being updated at the moment, because of recent events such as the Covid-19 pandemic.”
According to its annual report for 2019, the last year before the Covid-19 pandemic, Via Rail’s Corridor East services on the Montreal - Ottawa - Toronto and Quebec City - Montreal - Ottawa routes accounted for $C 269.6m of the company’s total revenue of $C 411m that year. The Corridor East trains carried a total of 3.6 million passengers in 2019, well over half of the 5 million carried by Via Rail in total.
Achieving modal shift from road and air will enable the HFR project to meet its goal of helping Canada to become carbon-neutral by 2050. “The tracks will be mostly electrified which would be new for inter-city rail in Canada,” Robitaille says. As with the civil works that will be needed, it will be for the bidders to come up with their preferred solution for electrification, as well as other railway systems such as signalling, and the eventual size and form of the HFR rolling stock fleet.
“We want the system to be safe. It’s up to bidders to demonstrate why they’ve chosen that level of safety and what safety systems they intend to implement to meet those levels of safety.”
Graeme Hampshire
On signalling, Hampshire thinks that the project has the potential to act as a catalyst for introducing train protection to Canada, preventing trains from passing signals at danger, enforcing speed limits and limiting the impact of human error on safe train operations. “They’re already thinking about it, obviously for the freight railways, but this will accelerate it,” he says. Asked if Via HFR would consider a system new to Canada, such as ETCS, if it were compatible with legacy signalling systems, he replies: “Yes. But again, we’re not going to specify the system.”
“We want the system to be safe,” Hampshire says. “It’s up to bidders to demonstrate why they’ve chosen that level of safety and what safety systems they intend to implement to meet those levels of safety.” On rolling stock, “again, it’s up to the bidders to put forward what they think their solutions are.” The different crashworthiness requirements imposed by the freight-dominated North American operating environment have sometimes proved an obstacle to introducing new rolling stock designs from elsewhere, particularly for passenger operations. If the HFR bidders want to open the debate about crashworthiness requirements, “you need to look at the system in the round,” Hampshire says. “If it’s totally isolated, and sterile, and has no connections with the freight railways, then you’re into a different ballgame.”
“This is again why we’ve been cautious,” Robitaille says, pointing out that at present the maximum speed for passenger trains in Canada is 177km/h. “We cannot point to something that already exists. But we prefer to view this as an opportunity. And we believe that our bidders see it that way as well.”
Advancing reconciliation
Robitaille also sees the HFR project as a great opportunity to advance reconciliation with Canada’s indigenous peoples, which he says is a real priority for both the project team and the Canadian government. “There are over 40 indigenous communities that the project will have a different impact on given its length,” he says.
Engagement initiatives have been launched to help Via HFR understand the expectations of these communities and to examine opportunities to work together. As well as respecting indigenous knowledge and taking traditional practices into consideration during project design, this will involve exploring the opportunities to create jobs and share the economic benefits with indigenous communities.
“We’ve involved indigenous communities in our procurement processes, and they’re keen to be involved,” Hampshire says. “It’s a commercial and competitive process and we need to respect that, but we are seeking to involve them.” The Canadian government is placing great value on selecting a partner who prioritises and values meaningful relationships with indigenous peoples, and during the RFQ stage bidders had to demonstrate past experience of establishing such relationships, taking into consideration employment, socio-economic benefits, and indigenous knowledge, history and culture. They were also required to identify innovative solutions to advance indigenous reconciliation through the HFR project.
“We’re not imposing the project on communities, we’re building it for the community,” Robitaille says. The success of the project is premised on working with indigenous communities, he stresses, but also with the cities and the provinces along the route. “This is about Canada seeking to improve its connectivity for over 60% of its population that lives in the eastern provinces,” Hampshire says.
The private-sector partner chosen to co-develop, build and operate HFR will be required to maintain connectivity to communities already served by Via Rail in the Toronto - Quebec corridor, but providing them with more convenient schedules that meet their needs rather than those of passengers travelling between Toronto, Ottawa, Montreal and Quebec City. Once HFR is in service, VIA Rail is expected to continue operating its long-distance services from Toronto to Vancouver and from Montreal to Halifax.
