Caisse says quick sale of REM line unlikely once project is done
The Caisse de dépôt has the right to sell off Montreal’s REM commuter light-rail network five years after it comes into full operation in 2023 if it feels one of the line’s four branches is underperforming, with Quebec having first rights to acquire the train line.
At a news conference Monday organized to shed more light on the management of the Réseau express métropolitain project following prolonged complaints of a lack of transparency, Quebec’s pension fund manager took pains to stress that a rapid sale was unlikely.
Among the revelations released from the management agreement between Quebec and the Caisse de dépôt et placement du Québec (CDPQ) Monday were the caisse has the right to sell if one of the four branches — from the South Shore to downtown Montreal; to Deux-Montagnes; to the West Island and to the Pierre Elliott Trudeau International Airport in Dorval — was found to be underutilized and unprofitable. But Macky Tall, CEO of the caisse’s infrastructure subsidiary, said the caisse isn’t interested in a quick sale because its investment is designed to earn higher returns in the long run. It would be up to the Quebec government to decide if a sale is required or if other options, such as compensating the caisse for an underperforming line or simply closing it down and replacing it with bus service, was more warranted. The caisse is investing $3 billion in the 26-station line, with the federal and provincial governments kicking in $1.28 billion each.
The regional transit authority overseeing rates said it hadn’t yet worked out how much train fares would cost. But Autorité régionale de transport métropolitain (ARTM) executive director Daniel Bergeron noted prognostications of how much the train line would earn were based on average fares charged to Montreal and suburban public transit users.
The management agreement notes that a special tariff could be charged for passengers heading to the airport, as is done in most cities, but Bergeron said that had not yet been decided. The 747 express bus running between downtown and the airport will likely be altered because the train line will offer faster and more regular service on the same route. But the line could be rerouted to serve other areas that lack access, like the Sud- Ouest borough, Bergeron said. The ARTM is studying how to reroute public transit offerings to mesh with the REM and ensure it is being used to its full potential in a way that will best serve the public, Bergeron said. Recent reports that the REM line would get exclusive rights to certain territories to maximize its use raised fears existing public transit services could be eradicated. By 2027, the ARTM was forecasting the line would see 600 million passengers and cost $438 million to run in a typical year. Of that amount, $124 million or just under 30 per cent would come from passenger fares and the rest would come from the government funding, with Quebec paying $238 million a year and affected municipalities paying $72 million. Last week, Transport Minister André Fortin confirmed operational payments for the train line are estimated at about $11 billion over 20 years, with passengers paying $3 billion and provincial and municipal governments covering $8 billion. The caisse is expecting to earn eight to nine per cent profit from the project. If traffic projections hold, it expects to reap $500 million in 2028 and more than $700 million a year in 2042, The Canadian Press reported.