Surrey-Langley SkyTrain extension facing delays due to TransLink's fiscal crisis

May 27 2020, 12:54 pm

COVID-19 is having a direct impact on the planning of one of Metro Vancouver’s most significant upcoming transportation infrastructure projects.

In a report to the Mayors’ Council ahead of Thursday’s meeting, TransLink says the SkyTrain Expo Line Fraser Highway extension project cannot proceed with its pre-pandemic planning timeline due to the public transit authority’s financial uncertainties.

TransLink was targeting an approval of the Phase 2 Investment Plan Update incorporating the SkyTrain project into the Mayors’ Council Plan, with the target date for approval in July 2020.

This was the “primary impetus” of the update before the pandemic, but it is “no longer feasible due to uncertainties in projecting future revenues.”

TransLink staff and the Mayors’ Council were also anticipating the federal and provincial governments to approve the project’s business case before the end of May. The business case was sent to the senior governments following the Mayors’ Council’s approval in January.

All three levels of government — federal, provincial, and TransLink/municipal — are financially contributing to both SkyTrain extension projects in Vancouver (Broadway Extension to Arbutus) and the Surrey, which will reach at least Fleetwood.

The Fleetwood extension would run seven km between the existing King George Station and 166 Street at a cost of $1.63 billion, utilizing all of the funding from the cancelled Surrey Newton-Guildford LRT project. But this funding draws on $484 million from the federal government and $1.12 billion raised by TransLink, which means it largely depends on the public transit authority’s finances.

In contrast, the $2.8-billion Broadway Extension is not at risk given that the federal government is covering $888 million, the provincial government is covering $1.8 billion, and the City of Vancouver is providing $100-million value from the required land for the subway stations. This project does not depend on a TransLink contribution.

“The pandemic is adversely impacting TransLink’s finances and much work will be required before TransLink will be able to develop and approve the next Investment Plan: once the longer-term economic and public health situation begins to stabilize and becomes more clear, the agency will need to reset its projected revenues and expenditures over the ten-year period, confirm available senior government funding, recapitalize its depleted reserves and re-prioritize its entire existing capital plan,” reads a TransLink staff report.

The likely timeline for approving the updated Investment Plan is now Fall 2020.

As well, the provincial government and TransLink are now examining options to increase the cost-sharing formula of the senior governments for major projects as a component of a senior government relief package that ensures planned infrastructure projects can continue.

“This would have the effect of reducing the region’s capital share and free up resources to address the challenge,” reads the report.

“If this happens, the business case will need to be updated prior to Treasury Board approvals with the Province and Federal Government.”

Due to the collapse in fare, fuel tax, and parking tax revenues, TransLink is anticipating a revenue shortfall of between $710 million and $3.25 billion, depending on the duration of the pandemic and the economic fallout, which could last for years.

Under the previous timeline, following the business case approval by senior governments and the approval of the Investment Plan Update, TransLink was aiming to begin an 18-month procurement process for a main contractor. Construction would have occurred from 2022 to 2025.

Although there are now fiscal hurdles, TransLink maintains that the Surrey-Langley SkyTrain extension’s business case is “still sound” as it is “a crucial addition to the region’s transportation system to support regional growth in the decades to come.”

Moreover, “the business case is already with senior government and the scope could readily scale with additional funding. However, it is fiscally prudent to wait until the nature and magnitude of emergency relief and stimulus programs is more certain.”

Fraser Highway SkyTrain King George Station Langley Centre

2019 map of the Fraser Highway SkyTrain extension from King George Station to Langley Centre. (TransLink)

The full cost of bringing the extension past Fleetwood and into Langley Centre is $3.12 billion. Between King George Station and Langley Centre, this would be a seamless 16-km-long extension of the Expo Line.

The first phase option up to Fleetwood with four new stations will attract about 40,000 average daily boardings in 2035. It has a benefit-cost ratio (BCR) of 1.12, where economic benefits exceed input costs of 1.0.

If the project were to be built in full with an additional $1.5 billion in funding, it would have eight stations, reaching 203 Street, with an average daily boarding of 62,000 by 2035. The BCR ratio is 1.24.

Both BCRs are considered high, comparable to the Canada Line and Evergreen Extension.

Construction on the Broadway Extension is on target to begin later this year, following the provincial government’s selection of a main contractor early this summer.

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