By Jeff T. Wattrick | MLive.com
This week we presented an extensive interview with Dr. Roy Norton, the Canadian Consul General, about the New International Trade Crossing plan and other issues at the Detroit-Windsor border. Here are some highlights from our conversation:
The costs of Detroit-Windsor border congestion
The average vehicle built in this area essentially crosses the border—from its smallest component until it emerges as a finished vehicle—six times. Chrysler argues that it costs them in the neighborhood of $700 per vehicle…
The prestigious Center for Automotive Research based at the University of Michigan says that costs of congestion to the U.S. economy are in the neighborhood of $30 billion per year, and in the trucking sector it’s $106 an hour that is lost to truckers by virtue of delays.
Chrysler says they could put that money into R&D. We could reduce the cost of the vehicles, making them more competitive with imports. We could export our vehicles at a lower cost, making them more competitive abroad. Instead, they’re spending money unnecessarily on congestion costs that distort the marketplace.
The Ambassador Bridge’s post-NITC future
We think that there’s enough demand for two bridges to be profitable. The Ambassador Bridge will lose some of its traffic. But half of their traffic is either local, meaning its traffic logically wouldn’t be rerouted two miles south and then two miles north. If you’re going from Chrysler in Auburn Hills to Windsor, you don’t necessarily go to the NITC. Mr. Moroun owns a number of trucking operations, and they’ll presumably direct their trucks across their bridge. The Ambassador Bridge will be less profitable, but there’s every reason to believe it will be profitable.
Opposition to twinning the Ambassador Bridge
I don’t know if Canada can be comfortable with a twin span. Certainly, the city of Windsor can’t be comfortable with a twin span. This has been tested already, and frankly it’s totally fallacious for the folks at the Ambassador Bridge to imply to anybody that somehow the two choices here are between the NITC and a twin.
On why Canada can’t simply remove spotlights between the Ambassador Bridge and Highway 401
Well, to “fix” the stoplight issue is to bring freeway to the foot of existing bridge, which we cannot do. The city has grown up around the plazas. The plazas were built in 1929. Nobody anticipated the volumes of traffic or the security requirements. The University of Windsor is at the foot of the bridge. Are we supposed to obliterate the University of Windsor? There are historic graveyards, there’s retail, there’s residential, are we supposed to obliterate it all? Do the Morouns not care anything about the community? Perhaps they don’t. Maybe I’ve answered my own question.
The case for redundancy
Prudent governments don’t allow the security of their countries or the employment of millions of people—there are eight million jobs in the U.S. that depend on trade with Canada and a quarter of U.S.-Canada trade crosses the Ambassador Bridge. Ipso facto, two million jobs in the U.S. depend on the Ambassador Bridge working just right everyday even though it’s 83 years old. It was built to last 50 years, and it will be approaching its 100th birthday in the not so distant future.
What if tolls don’t fully repay Canada’s $550 million loan to Michigan?
We suck it up. The government of Canada assumes all liability associated with that money.
The bridge builder/developer assumes liability with regards to the project they’re contributing, so if it costs $1.2 billion that will be their responsibility to suck up. But, in terms of the $550 million, if the bridge were never to become profitable, Canada eats the $550 million and the government of Canada is fully mindful of that risk. It’s quite an affordable risk; it’s quite a manageable risk.
On assertions that NITC will cost more than is estimated
We’ve done a lot of public-private partnerships in Canada. We’ve got a lot of experience with them. This is a good time for building these sorts of things. The Ontario freeway—the $1.4 billion freeway—we had thought would cost $1.6 billion. It came in $200 million under budget. Other public-private partnerships that we’ve engaged in over recent years have come in under budget, ahead of time, or both. There’s no basis for promoting cynicism, as some folks have done along the line of: “Oh, well you know these things always far more than what they’re projected to cost.”
On Canada’s tri-partisan support for the NITC
Oh, all parties can speak in favor of the importance and desirability of a particular infrastructure project, but it is unprecedented that all three parties would agree that the government of Canada should encumber the Canadian taxpayers with a $550 million liability to support a developed country’s contribution to a share of a bridge. This is unique. It speaks to the importance to which we attach to the project.
The binational bridge authority precedent
There is nothing novel about this model [for building and operating the NITC]. It pertains in the case of 25 of the 27 bridges. The two exceptions are the Ambassador Bridge, which carries the most traffic, and a bridge in northwest Ontario-northern Minnesota across the Francis River that’s owned by logging company. They have a sawmill on each side of the river and they drive back and forth. For the most part, they’re the only people who use it.
Transport Canada’s relationship with the Detroit International Bridge Company
We regulate telecommunications. We regulate electricity and other monopolies. This is a piece of critical binational security infrastructure. Why would it not be regulated in the same way? If ever there was a case for a government role, it’s got to be in the context of something like this.
But, the relations between the Ambassador Bridge and the law enforcement agencies I think are fine. The relations with Transport Canada, which is the lead on the NITC, get rockier every time the Ambassador Bridge brings a new lawsuit against us, and they are quite litigious by nature, and not just us. They sue the government of Michigan, they sue the city of Detroit, they are into lawsuits big time.
Could the DIBC potentially operate the NITC?
This is an open process. They’re not a firm that knows something about building a bridge, necessarily, but they certainly know something about operating a bridge. Maybe they can be part of a consortium with people who know something about bridge building but not about operating. It would be a match made in heaven.
The NITC project timeline
Given that [legislation authorizing the project] won’t pass before the fall of 2011, construction probably doesn’t begin until early 2013 and it will probably take four to five years to complete. So, an opening in 2017 with all those jobs existing during a period of construction is probably what we should be anticipating.