ROB SHAW (Vancouver Sun)
VICTORIA — The money-losing Port Mann Bridge won’t start turning a profit until 2025 — eight years behind its original schedule, according to newly released government figures.
Financial forecasts for the bridge, provided to Postmedia News, show it is projected to continue suffering tens of millions in annual losses until 2025-26, when it hits a break-even point. After that, the forecast calls for the bridge to start aggressively repaying both its original construction costs, as well as 13 years of accumulated annual losses, before fully retiring the debt by 2050.
The $3.3 billion Port Mann/Highway 1 expansion project over the Fraser River between Surrey and Coquitlam has been plagued by lower-than-expected ridership since it opened in 2012, because drivers have mainly detoured to the nearby free Pattullo Bridge.
Transportation Minister Todd Stone said he remains confident the Port Mann will be paid off by 2050 — when Stone turns 78 — and that he’s heartened by a 14 per cent increase in average monthly traffic on the bridge in the last year.
“I am absolutely confident with the projections and the numbers I see and that I have put in front of me every day,” he said.
“As we said from the beginning of this project, through its construction and to this day, the entire debt related to the Port Mann Bridge project will be paid before 2050. That has never changed.”
The government had originally expected the bridge to be turning a profit in 2017-18, according to Cabinet’s 2010 letter of expectation to the Transportation Investment Corporation, the stand-alone corporation that operates the Port Mann on behalf of the government.
Instead, documents released with last week’s provincial budget project a $90 million loss, in addition to $407 million in losses over the first five years, casting doubt over the viability of a future toll bridge to replace the George Massey tunnel. Government reduced its vehicle traffic projections for the Port Mann in 2014, saying they were too aggressive.
“It’s a financial disaster for the province,” said NDP critic Claire Trevena. She said the projections showing a 2025 break-even date is part of continued “disgraceful” miscalculations by government.
“I don’t believe government’s projections because they’ve got it so wrong for so long,” she said.
The new government figures show what the province hopes will be the bridge’s path to profitability.
“The assumptions behind the numbers are conservative, projecting a much less than three per cent growth in traffic, slow toll rate increases over time, as well as increasing interest rates,” the transportation ministry said in a statement.
“As we’ve mentioned, traffic on the bridge has grown by over five to six per cent a year since 2014 (14 per cent last year), which has outpaced the conservative projections in the model that we’re using.”
The government would not provide exact traffic estimates, or projected tolls, because it said those relate to potential future policy decisions. Instead, its charts refer simply to “cash-flow,” which could be accomplished by increasing ridership, increasing tolls, or some combination of the two.
Stone said the positive bridge traffic numbers led to a recent decision not to raise tolls, which currently sit at $3.15 per regular vehicle.
Daily traffic on the Port Mann varied in 2016, from a low of an average of 103,000 drivers last January to a high of 140,400 in August. The old Port Mann Bridge averaged 127,000 drivers daily. At three per cent annual growth, the amount of vehicle traffic would more than double by 2050.
The B.C. government’s optimism for the future stands in stark contrast to the Port Mann’s current, sobering, financial statements. The bridge earned $145 million in toll revenue last year, which was quickly eaten up by $142 million in interest costs on the debt, $38 million in operating expenses and $53 million in depreciation, leaving an $88 million net loss.
The province points to other major projects as proof they can be paid off over the long term, such as the Oresund bridge linking Denmark and Sweden, which cost 2.6 billion euros and opened in 2000 with a 34-year repayment plan that remains on track despite initial loses.
The transportation ministry also pointed to Highway 407 in Ontario, a contentious tolled structure that cost $1.6 billion to build in 1997, lost money in its initial years and then began to turn a profit before it was sold to a private company for $3.1 billion in 1999.
