Olympic transportation plan released

Posted March 11, 2009 by Sacha Peter
Category: Olympics

Today VanOC released the Olympic Transportation Plan. It is a surprisingly common-sense document – just stay out of the downtown core, and anywhere near the athlete’s village during the Olympics. There will also be dedicated lanes in major arterial roads leading in and out of Vancouver, in addition to lane provisions on the Lion’s Gate Bridge and the Second Narrows Bridge.

Whistler will also have significant vehicle restrictions, but again, this is not surprising.

Nothing too controversial in this document that can be picked away at politically. The document alludes to more detailed plans coming out in the summer of 2009 which might have a little more political impact. Of course, this will be after the election is over.

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Dodging the Olympic security costs

Posted February 19, 2009 by Sacha Peter
Category: Olympics

The government of British Columbia managed to have the federal government take on the majority of the Olympic security bill.

Provincial release – Federal release

The federal government’s release is much more detailed than BC’s release.

The provincial release says it will pay the federal government $63.7 million (plus it has already paid $24 million), and increase its share of infrastructure funding by up to $165 million over the next three years. In exchange, the federal government will completely take over the operations of Olympic security. Inferred in this is a total cost of $252 million to the province, which the federal release uses.

The federal government mentions that its share is $647 million, for a total cost of $900 million.

When the costs are broken down, about half of it goes to the RCMP, but I will just cut and paste it from the federal release:

* $491.9M to the Royal Canadian Mounted Police (Integrated Security Unit) to lead, develop and deliver the integrated security plan for the 2010 Games. The RCMP will provide security for athletes, coaches, officials and all other participants in the Games.
* $212M to the Department of National Defence to provide unique military skills to support the RCMP in securing the Games.
* $25M to Transport Canada for a contribution to NAV Canada for enhanced air navigation services along the Sea-to-Sky corridor, and to ensure the safe and secure movement of aircraft during the Games.
* $8.8M to Transport Canada to perform inspection and enforcement activities on transportation systems during the Games.
* $11M to the Canadian Security Intelligence Service to provide intelligence support related to threats to the national security of Canada, including the 2010 Games.
* $9.8M to Industry Canada to provide effective, interference-free broadband for radio-communication networks and wireless devices used by the security agencies during the Games.
* $1.2M to Citizenship and Immigration Canada for security screening measures associated with the Games accreditation process. The accreditation card will serve as both temporary resident visa and security access card for Games venues.
* $1.2M to Public Safety Canada to coordinate with federal organizations responsible for 2010 security and public safety issues, provinces, territories, first responders, industry, and international counterparts.
* $0.9M to the Public Health Agency of Canada for public health surveillance, provision of medical equipment and supplies, emergency training, and laboratory services.
* The Government of Canada will contribute an additional $1.4M to the federal employee benefit plan, for certain overtime costs related to RCMP.
* In addition, the Government of Canada has set aside $137M as a contingency reserve in case of unforeseen events requiring additional security measures.

This announcement should be considered a major victory for the government – it removes a large degree of budgetary risk associated with the Olympics, and it seriously blunts the attacks that the NDP would have over future costs. Although the budget has been increased from original projections, there is far more certainty with the final cost, especially with the provisions that the federal government will pick up cost overruns.

It is unlikely now that Olympic spending will haunt the government come election time as the security costs were the major “known unknown” (now a “known known”). There still is the issue of cost overruns on other projects related to the Olympics (e.g. the downtown convention centre), but this is unlikely to gain traction.

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BC Auditor General doing the job of the opposition

Posted December 15, 2008 by Sacha Peter
Category: Analysis, Olympics

Auditors are a critical function of any organization – they provide a third party control, one in theory that should not be subject to manipulation.

In practice, however, things are a little different. In the corporate world, auditors are typically reliant on consulting revenues from the very same companies they are trying to audit. The prototypical case of this was Arthur Andersen with respect to Enron, Worldcom, etc. There are other examples which are less extreme, but the very relationship that auditors have with their clients (mainly that the auditors are being paid by the clients they serve) lead to an inherent conflict of interest – if the auditor delivers a report too damaging, the company will simply dismiss the auditor due to a “difference of opinion”.

This is why when companies change auditors in the three month period following the end of the fiscal year, it is always a “red flag” for an investor since it is virtually guaranteed there is more dirt that is not being made public.

In government, the role of the auditor general is defined by Section 11 of the Auditor General Act. Generally, the Auditor General is to provide assurance that the financial statements produced by the government are correct, and to audit grants, and performance guarantees, and items of that nature. Also in the act, contains Section 11(8), which provides for the following broad mandate:

(8) The Auditor General must report to the Legislative Assembly one or more times each fiscal year of the government and call attention to anything resulting from the work undertaken to exercise the powers and perform the duties of the Auditor General that the Auditor General considers should be brought to the attention of the Legislative Assembly, including any assessments concerning whether

(a) financial and administrative provisions of Acts and regulations under those Acts have been complied with,

(b) the government, a government organization or a trust fund is operating economically, efficiently and effectively,

(c) the procedures established by the government, government organizations or trust funds to measure and report on the effectiveness of their programs are adequate and complied with,

(d) the accountability information provided to the Legislative Assembly by the government, government organizations and trust funds with respect to the results of their programs is adequate,

(e) the terms and conditions applied in respect of a grant, a transfer under an agreement, an advance of money, a loan, a guarantee for the performance of an obligation, or an indemnity given by the government, a government organization or a trust fund to any individual or another organization have been complied with, and

(f) the terms and conditions applied in respect of a collection of money on behalf of the government, a government organization or by or on behalf of a trust fund have been complied with.

I earlier covered the item with respect to the Rich Coleman tree farm license land removal issue – one that he was later exonerated from the conflict of interest commissioner. However, the underlying argument of the Auditor General was that there was sloppy internal controls with respect to process, and this apparently has not been corrected (or at least if it has, it hasn’t been made public).

The NDP pushed the conflict of interest angle (until it was cleared up), but they never pushed the process/internal control issue – which inherently is the more important of the two with respect to public interest.

Recently, the Auditor General made note in a December 11, 2008 statement about the reporting of the 2010 Olympic budget. It is only a three page report, so one can read the whole thing. Inside this statement includes the following paragraph:

The second piece of work relates to costs and risks to the Province associated with the 2010 Olympic and Paralympic Winter Games (the Games). My Office’s two previous reports, issued in 2003 and 2006, conclude that British Columbia’s share of the full cost of the Games is considerably higher than the $600 million figure that has often been quoted. Further, in the absence of full disclosure by the Province, each report highlights significant risks that could result in even higher costs to the Province by the time the Games are finished.

Later is a recommendation that the revised budget coming next year by VanOC “will present an ideal opportunity to update this disclosure.”

Obviously the current government is not happy with such a report. But the Auditor General is doing exactly the job that the role was created for – to highlight weaknesses in government reporting and internal controls. It is typically a political move to reduce funding and staffing to the office of the Auditor General if he/she is being diligent with his/her portfolio, and it will be interesting to see if this happens.

Normally this should be the job of the official opposition – but since they are chasing issues of little concern to the operations of government, Auditor General John Doyle is clearly doing a better job at presenting real issues to the people of BC.

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Sea to sky rockslide

Posted August 1, 2008 by Sacha Peter
Category: Olympics, Transportation

As work to clear the rock slide continues, I noted the sensationalist media depicting the world almost coming to an end if you lived in Squamish and Whistler.

Fortunately, there is a scenic route that will take six hours from Vancouver to Whistler – compared to the two hours it would normally take. Implied in this is that the extra four hours of driving will not result in Whistler being cut off from the rest of the civilized world.

I was trying to find political reactions to this event as politicians absolutely love to take unexpected events and twist it around. The NDP transportation critic, Maurine Karagianis, who stated the following from an article in the Vancouver Sun:

“This one is huge. Sixteen thousand tonnes of rock coming down on a busy highway that we expect will have to be almost bumper to bumper traffic for the Olympics in order to get the number of people up there — that’s a catastrophe in the offing,” said Karagianis.

“I think it’s a huge problem, and I think this is another wake-up call,” she added.

“I’d like to hear from the government. What is their contingency plan? Who is taking responsibility for this?”

It’s a legitimate question, although laced with the usual adjectives (“bumper-to-bumper”, “catastrophe”, etc.) – what if a rock slide happens during the 2010 Olympics? Christine Penn (a reader of the Vancouver Sun) noted that a slide in the spring of 1996 and 1990 caused highway closures (the 1990 closure being 12 days long). It is unlikely that a rock slide would happen during the two weeks of the Olympics, but if it did it would seriously impact transportation efforts.

Karagianis begins to lose it with this statement:

In an interview, Karagianis said the government should have long ago planned a contingency route to ensure a slide of this magnitude could not have the potential to cripple the Olympic Games.

“I think the government was short sighted in not ensuring there was more than one entryway into Whistler that was adequate for the public use,” she said, adding that should have been an early consideration in the Olympic plan.

Premier Gordon Campbell puts her back in place with the following statement:

When asked about building an alternative route, Campbell responded: “Right now I would not immediately jump and say we should spend billions more on another road through a national watershed.”

While the risks can be mitigated with rock-bolting and other forms of prevention, the risk cannot be significantly reduced further simply because the routing of the Sea-to-Sky highway is in a geologically ripe location for rock slides. Historically, there was a routing that was more expensive to build that involved going up the Indian Arm, but the government of the day decided to settle for the coastal routing. The yellow line in the map depicts such a routing:

Choosing the coastal route (although much more scenic) inevitably turned out to be a rather short-sighted decision as it permanently leaves open the risk that the highway will be closed for significant periods of time due to slides.

You will notice one other routing on the map, with the red line – going through Garibaldi Park, so it will not happen, but topographically it is the most likely route to Whistler.  More likely (and not illustrated) is the so-called “Sasquatch Highway” that would connect Harrison Hot Springs to Pemberton.  There is a 4×4 and forest truck logging road that already connects the two areas.

These routes have been explored and are likely in the historical studies commissioned by the Ministry of Transportation, although there is zero chance of them coming to fruition as long as the government continues to upgrade the Sea to Sky highway. The amount of protest would be greater than the magnitude that the Eagleridge Bluffs upgrade generated. It is virtually impossible to build a new road in the Lower Mainland without generating protests.  The “Sasquatch Highway” route, however, is a lot more likely to happen as there is already a pre-existing road there.

The contingency plan is likely to pray for no rock slides during the Olympics. The unfortunate reality is that even with a ferry service running from Horseshoe Bay to Squamish, it won’t be able to scale up nearly to the volumes necessary for the Olympics if an event of this magnitude occurred. A realist would just write “no plan” in the report, but since this would be rather politically incorrect, ferries will be discussed. But even if a rock slide occurred, ferries won’t be able to do it – the ultimate contingency plan is to take the long way around to Whistler. In February, I’d bring my tire chains.

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Shocking 2010 Olympic News

Posted March 14, 2008 by Sacha Peter
Category: News, Olympics

Today, the Vancouver Province reported that the official airport of the Vancouver 2010 Winter Olympics is… Vancouver International Airport!

This gave me a good laugh.

It would have been nearly as funny if it was Boundary Bay Airport.

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