Chapter 6: Financing and Delivery

HSR will be built within the context of the Province’s path to a balanced budget; therefore, consideration of value for money is paramount. Determining how best to finance and deliver a project of this scale requires an understanding of options that balance innovation in design, construction, and user experience with risk and cost to government.

Financing and Delivering Ontario’s Largest Transportation Project

As is often the case for public transportation and other public goods, capital costs for HSR systems are generally not fully recoverable through fares and other operating revenues alone. Although around the world revenues typically cover operating and maintenance costs for HSR systems, reliable financing and funding is always required to deliver capital infrastructure. This chapter discusses financing and delivery options for HSR in Ontario and identifies some potential funding opportunities.

To achieve a successful HSR system a variety of elements must be considered, including but not limited to

  • Planning the HSR system
    • A major transportation infrastructure project such as HSR requires significant study and planning, including the pre-design, engineering, and technical feasibility studies that ultimately inform the design characteristics of the preferred HSR system.
    • This work supports the future EA process.
  • Environmental assessment process, land permitting, and if required, land acquisition
    • All transportation infrastructure projects in Ontario are subject to provincial EA requirements.
    • The EA process supports responsible environmental decision-making by ensuring that governments and other public bodies consider potential environmental effects before an infrastructure project begins.
    • The process ensures Indigenous engagement and public consultation, including before and during a project.
    • The environmental permits and other approvals that are required depend on the scope of the project being undertaken.
  • Determining a financing and delivery model based on a value for money analysis
    • A VfM analysis is conducted on various financing and delivery models being considered for a particular infrastructure project to determine the most efficient and effective way to deliver a project while also ensuring the best value for taxpayer dollars spent.
    • Based on the specific project and consideration for factors such as budget, risk, innovation, and schedule, the model that delivers the best value for money might be traditional (100% public funds), or a mix of public and private funds structured through one of the various Alternative Financing and Procurement (AFP) models.
  • Design and construction
    • Detailed concept design and construction of the HSR system involves the physical build-out of the infrastructure, which can include new, dedicated HSR lines or building the infrastructure needed to upgrade existing track and/or to accommodate higher speeds; this can also include the construction of new or expanded stations, if necessary.
    • The work generally consists of civil engineering, tunnelling if required, signalling, and electric power supply/distribution.
    • The high speed trains to run on the system—also termed the “rolling stock”—must also be designed, bought if required, tested and serviced on the system prior to the start of operations.
  • Operation and maintenance
    • Once the HSR system is built, ongoing operation and maintenance are required over the lifecycle of the system.
    • Operations refer to both the operation of the infrastructure (signalling, train control, safety inspections), and the trains (day-to-day service, ticket sales, customer service).
    • Maintenance includes replacing and fixing track, repairing damage, and servicing and cleaning trains.

To deliver an HSR system, the above tasks must be undertaken either directly by government or procured through various types of contracts. In many cases the private sector is better equipped to deliver on components, such as the civil engineering and construction, for example, and the government may choose to award a contract to a private-sector company for such work through a competitive procurement process.


The inherent environmental, technical, operational, and financial risks associated with a project this large and complex are different than those associated with more typical industrial investments, due in part to the relatively high capital costs and long construction periods of such projects, and, in the case of rail transportation, to the relatively slow-rising revenues, where passenger volumes increase over time. Whereas the risk profile of some of the Province’s construction projects, such as highways, is fairly well-understood, HSR would be unprecedented for Ontario and Canada. Some major risk factors for this project include

  • Environmental risks, or those risks associated with environmentally sensitive lands, watersheds, plant and animal species, archaeology, or culturally sensitive lands.
  • Weather-related risks, especially in winter (e.g., storms), causing delays or potential infrastructure issues such as subsidence.
  • Cost overrun risks during construction, which can negatively impact on-time, on-budget delivery.
  • Lifecycle risk related to potential maintenance and operational cost overruns, such as the inability to run trains on time due to poor maintenance.
  • Interface risk, or the risk that components of the HSR system, including the track, rolling stock, operations, maintenance and other components, do not integrate or work together efficiently; interface risks can arise when a project is dependent on the interconnection or interaction of separate components being delivered by two or more suppliers.
  • Revenue risk, resulting in revenues that are less than forecast, also referred to as passenger risk, since passenger demand drives revenues.

Identifying and allocating risk appropriately is integral to project success and an important input in any VfM analysis, which helps to determine any particular infrastructure project’s optimal financing and delivery model.

The Models: How Are Major Transportation Projects Financed and Delivered?

When determining the most appropriate procurement model for HSR, analyzing which model will provide the best value for money and the preferred net fiscal impact over the project’s lifecycle is one of the most important steps. Because the Province has never undertaken this type of project before, delivering a successful HSR system will require both expertise and innovation.

Various models for HSR financing and delivery exist internationally, from traditional 100% public-sector delivery to 100% private-sector delivery, but because rail infrastructure, similar to other public goods, is built to provide socio-economic benefits and not purely for monetary gains for investors, the latter model is extremely rare.1 

The Brightline from Miami to Orlando, Florida, is one such example, the United States’ first privately-owned and operated intercity passenger rail system. Currently being built by All Aboard Florida, a subsidiary of the Florida East Coast Industries corporation (a real estate, transportation and infrastructure company), the Brightline is unique for a few reasons: its business model is driven by a large, successful tourism industry and the system is being built on an existing right-of-way owned by Florida East Coast Industries, so environmental and land impacts are minimal.2 But conditions like these are rare.

As this chapter will detail, HSR systems around the world are typically financed and delivered through some combination of public and private involvement and through various types of financing and delivery models.


Historically, transit and other major infrastructure projects in Ontario have been delivered through traditional design, bid and build (DBB) models whereby the government puts out requests for bids. First, proponents bid on design, based on a predetermined scope of work. Next, they bid on constructing the resulting design from the first bid. Subsequent to the construction contracts, separate contracts can be issued for operations, maintenance, and rolling stock. This model has been most commonly applied for Ontario’s linear transportation infrastructure such as highways.

DBB can result in several separate contracts that are typically overseen by the government. In a DBB, although the private sector remains involved in delivering components of the project and is paid by the government for work completed, it is not often involved in financing the project. Benefits of the traditional approach include the relatively simple procurement process and the government’s ability to access lower capital costs.

Some disadvantages of the traditional approach to procurement include the potential of disconnects between a project’s various components, since all of them are procured and delivered separately. If problems arise there is the potential for suppliers to refuse responsibility—an HSR system’s poor maintenance, for example, could be blamed on poor construction or poor design. Under the DBB model, such “interface risk” is ultimately borne by government, as are lifecycle and operational risks. The risks of this approach are overcome by employing a system and safety integrator responsible for integrating the different designs and construction tasks.

The majority of HSR systems around the world have been procured using traditional models. This is partly to ensure that more detailed design is completed before the construction is tendered as the risks of price escalation when this is not done have been seen as unacceptably high. Design-build contracts offer the private-sector partner incentives for innovation (in construction methodology, for example) and are often combined with benefit-sharing to achieve better VfM.

Another variant of the traditional approach was used successfully by the federal government in the 1990s when it decided to confront the issue of modernization of antiquated airport infrastructure.  Under the National Airports Policy, not-for-profit local airport authorities (LAAs) were established to take over management and operations of Canada’s 29 major national airports on 60-year concessions, although the Government of Canada still owns the facilities. These LAAs faced the huge challenge of renovating and/or rebuilding airports that required vast sums of capital to do so. However, as bodies that are arm’s-length from government, the LAAs have been able to borrow on open financial markets to finance their projects. Revenue streams to recover the money borrowed come from a variety of sources, including landing fees and commercial rents. Since the devolution of airports began in 1992, some $19 billion dollars of improvements have been financed privately, with no burden to the general taxpayer. The GTAA alone financed more than $4 billion in expenditures for terminals, roads and other infrastructure from domestic and international sources. Whether this model could be adapted to the building of HSR should be one of the subjects for further discussion.

Alternative Financing and Procurement Models

Public-private partnerships (P3s), also referred to in Ontario as AFP models, have recently been used to deliver major transit and infrastructure projects in the province. The AFP model aims to bring together private- and public-sector expertise in a structure that transfers some project risks (e.g., project cost increases, scheduling delays, etc.) from the public sector to the private sector. Under AFP, provincial ministries and/or project owners establish the scope and purpose of a project while design and construction work is financed and carried out by a private-sector consortium. Depending on the structure of the contract, the same consortium could also be responsible for the operation and/or maintenance of the asset. 

The Province established IO in 2005 as a Crown agency responsible for financing and modernizing public infrastructure. One of IO’s business lines, “Major Projects,” manages the delivery of infrastructure projects primarily through the AFP model.

The Province uses a VfM assessment for AFP projects, comparing the total project costs for AFP to the costs of traditional procurements, to ensure that AFP offers the best value for government. If an AFP delivery model is chosen for a particular project IO often acts as the procurement and commercial lead, supporting contract development and evaluating the financial structure proposed by bid respondents.

Under the AFP model the private-sector consortium arranges for its own project financing. This can involve different types of private lenders, ranging from banks to life insurance companies. Since the consortium typically does not get paid until the construction is well underway and certified as meeting the project requirements, the lenders’ interests are aligned with the government’s interests in ensuring that construction is completed on schedule, within budget and with the proper level of quality.

To reduce a project’s overall financing costs while ensuring appropriate risk transfer is maintained, IO recently modified its AFP model to provide construction progress payments (CPPs) during construction. Previously, the consortium received no payments until the project was constructed and certified as fit for use, at which point the consortium would receive a substantial completion payment (SCP) representing approximately 60%‒85% of the consortium’s total project budget.

CPPs are monthly payments made by the project sponsor (i.e., government) to the private consortium once the consortium has expended 50% of its construction costs. The CPPs and SCP are sized to maintain the incentives for on-time and on-budget performance. After substantial completion, regular (typically monthly) “availability” payments are provided to the consortium as long as the asset is maintained and available for its intended use.

These tools ensure that the government optimally balances risk transfer and financing costs, and that the private sector retains sufficient “skin in the game” to meet its obligations. AFP projects are characterized as having higher initial costs due to the higher costs of borrowing from private sources compared to the government’s lower borrowing costs for construction financing, although the trade-off is that a portion of the construction and operating risks are transferred to the private sector under an AFP model.

In Europe, where HSR systems have been built for a number of years, traditional procurement approaches tend to be preferred. In the U.K., for example, although HS1 was originally envisioned as an AFP-type project, the government had to assume the delivery of the project due to lower-than-projected revenue forecasts. More recent rail projects in the U.K., such as HS2, have resumed using traditional financing and delivery models.

To support the Special Advisor in developing insight and recommendations around the appropriate delivery models for HSR, MTO engaged IO to undertake a market sounding. Between January and July 2016, IO and MTO officials met with stakeholders representing the financial sector, engineering and construction firms, and operators and equipment providers to discuss the potential opportunities associated with HSR in Southwestern Ontario as well as key considerations regarding financing and delivery.

Lessons from the Market Sounding: What We Heard

Overall, private-sector interest in an HSR system in Southwestern Ontario is high. All respondents indicated a strong interest in having a role in the project under the right conditions and were keen to be kept engaged as the project advances.

Private-sector participants in the market sounding were asked a series of questions related to their interest levels in the HSR project, the allocation of various types of risk, their preferred capital structures, where the private sector sees the role of government and, ultimately, what their preferred delivery model would be for a project of this scale. Participants were not given any information pertaining to the business case for HSR (e.g., cost estimates or potential timelines), since at the time it was not available. Instead, participants were asked to express their general thoughts and opinions about what such a project might look like and how they would like to be involved. The following is an overview of what respondents said about HSR in general and about key project factors.

Cost to Government

Market respondents articulated clearly and unanimously that they saw no scenario where the private sector would finance and deliver a turnkey HSR solution funded solely by projected ridership. This response suggests that the market is also unlikely to accept a financing and delivery model that transfers significant revenue risk (i.e., passenger risk) to the private sector. It was emphasized that this reluctance flows from HSR systems not having an established revenue stream and existing traffic patterns.

However, transferring some portion of passenger risk to the private sector is not unprecedented. For example, as described in Case Study 1, Vancouver’s Canada Line LRT system was able to transfer approximately 10% of its passenger risk to the private sector via an AFP contract.

Case Study 1: Canada Line LRT, Vancouver3

Key Lesson:

Government transferred most risks to the private sector (i.e., InTransitBC) through a 35-year Design-Build-Finance-Operate-Maintain (DBFOM) AFP contract.


  • Most notably, the private sector assumed a portion of the line’s passenger or revenue risk, since the contract stipulates that 10% of its revenue is dependent on achieving ridership forecasts.  
  • Since it markets the system, sets fares, and controls bus service to support the line, the Greater Vancouver Transportation Authority retained some risks including the majority of ridership revenue.
  • This AFP was expected to generate $92 million (NPV) in savings to the government compared to a traditional procurement. 

As HSR in Ontario would be a new system the market indicated that government would need to bear a significant portion of costs and revenue risk, at least for a certain period of time, until ridership and revenues are proven. Some respondents suggested that one approach to reducing cost to government is to have the government operate the HSR trains for five or ten years to build ridership and revenue levels. Once these levels are proven, the government could sell the operations as a concession to the private sector to recoup a share of project costs. This is the model used in the U.K. for HS1. Case Study 2 describes how the concession model was implemented for this project.

Case Study 2: High Speed One (HS1), U.K.4

Key Lesson:

Government had to assume project delivery following lower-than-projected traffic outcomes for HS1; government was eventually able to recuperate some costs through an operating concession model after ridership and revenue levels were established.


  • Initial expectations were that construction of HS1 could be entirely financed by the private sector against expected revenues from Eurostar UK; traffic forecasts were overly optimistic and government had to intervene and assume project delivery.
  • Government brought project in-house in 1998 and established ridership and revenue streams, and in 2010 sold operating concession for track infrastructure to Borealis and Teachers’ Infrastructure Group, recouping some project costs through track access charges.5 These operators have little direct exposure to passenger risk. The sale of the operating concession is generally regarded as well-handled and achieving a higher-than-expected price for government.

Project Phasing

The market unanimously suggested that developing HSR in stages would reduce the overall risk premium paid by government. It was suggested that building HSR first from Toronto to London, and then extending the track to Windsor in a second phase would be a measured approach, and would generate a number of benefits including balancing costs over time and reducing ridership risk/revenue risk.

In this context, a few of the market sounding participants mentioned the example of California’s high speed rail system, which is currently under construction and described below in Case Study 3. The project is experiencing a number of challenges including cost uncertainty, delays, and reduced public support, which sounding participants suggested might be attributed to building too much at one time, which has introduced integration risk.

Case Study 3: California HSR6

Key Lesson:

Project size and various construction "packages” have created high integration risk and challenges to remaining on budget.


  • The California High Speed Rail Authority (CHRSA) is delivering its HSR system through a Design-Build model.
  • Because of its size the project is being delivered in phases, broken down into three construction packages per phase since the sections under construction are quite large: Phase 1, for example, covers the 840-km distance from Anaheim to San Francisco.
  • The total cost is expected to be approximately $64 billion USD.

Capital Structure

When private-sector respondents were asked about the size of project that the market could bear, many of them indicated that the maximum capital costs of a single contract to deliver HSR should be $5 billion, as a general estimate, and that if the project’s capital costs were beyond $5 billion, the project would have to be broken down into smaller, more manageable contracts. Some projects with capital costs above $5 billion can be found, however. For example, an approximately $10 billion HSR project is being delivered in France under one AFP contract. Another influencing factor will be the number of other projects underway at the same time, since how much market capital is available for any one project depends on how much is already tied up in other projects.

If the project is over $5 billion, there could be benefits to breaking it up into various contracts, including potentially increasing market competition. When a single project is too large only one or two private-sector proponents may have the capacity to deliver it, thereby reducing cost competitiveness in the bidding process.

Role of Government

Every participant emphasized that to successfully deliver an HSR solution there is no role for “passive government.” The project is not financeable without government involvement, largely due to the risks described earlier in the chapter. To protect its interest and to ensure value for money, government must actively ascertain and properly allocate risks under the appropriate funding model.

The private sector expects that EA processes and related engagement with stakeholders and Indigenous communities are part of government’s role. They also indicated that government must reduce the risk of over-serving the corridor by managing the various “moving parts” including the coordination of VIA Rail, UP Express, GO RER, and ensuring that the majority of freight is successfully taken off the corridor. These were considered significant strategic decisions related to the delivery of HSR in Ontario and participants made clear that these are prerequisites for private-sector involvement in the project.

Delivery Model

Almost all respondents recommended that the government pursue an AFP model to finance and deliver HSR in Ontario. Most of those recommending such an approach indicated a strong preference for a DBFOM model. Others recommended a Design-Build-Finance-Maintain (DBFM) model, which is currently being used to deliver the Eglinton Crosstown LRT. Respondents indicated that including the “O” (Operate) component for HSR would generate a more integrated solution and a higher likelihood that the infrastructure would be operated smoothly once delivered.

This approach is not unprecedented in Canada. The country’s first DBFOM model for a transit project, Vancouver’s Canada Line LRT, was delivered under a 35-year contract and in October 2016 the DBFOM model was announced as the chosen approach for Ontario’s Hurontario-Main LRT, connecting the lakeshore in Mississauga to Brampton.

Under a DBFOM model, every component of the HSR project would be delivered by one private-sector consortium (i.e., a group of companies with varied project-area expertise that agree to bid on a project as one entity). Private financing of the Design and Build components provides an incentive for on-time/on-budget construction of the asset; the integration of Design and Build transfers “constructability” risk; and the inclusion of Operate and Maintain reduces integration and lifecycle risks. Because the party that designs and builds the system will also operate and maintain the trains and infrastructure they have an incentive to deliver an efficient and high-quality system over the duration of the concession.

As with all AFPs, DBFOM contracts include the number of years the concession will be held by the private-sector consortium: the government retains ownership of the infrastructure and the private sector operates and maintains it for the number of years specified in the contract. For example, France’s Tours-Bordeaux HSR line, which is considered a strong example of on-time, cost-effective delivery, is being financed and delivered, operated and maintained by LISEA, a consortium of companies, over a 50-year period as part of its DBFOM contract.7 Highlights of this project are described in Case Study 4.

Case Study 4: Tours-Bordeaux HSR, France8

Key Lesson:

The French Government transferred most risks to the private sector through a DBFOM model; the private sector is financing approximately 45% of the project.
To date, the project is an international example of DBFOM achieving desired outcome on an HSR project.


  • This project represents the first time France has used this kind of AFP model: a single company essentially designs, finances, builds, runs and maintains a major railway line.
  • To date, the project is considered an excellent example of on-time, cost-effective infrastructure delivery in Europe; project complexity is relatively low, however, due to the absence of a need for tunnels and the largely greenfield construction.
  • The government ensured that the contract has reliability and availability targets with built-in penalties if they are not met and financial incentives for early delivery and performance.

As discussed earlier, real capital risk is best transferred to the private sector through AFP models, including DBFOMs. Payments to the private sector are structured to give consortia financial incentives to deliver on time and on budget.

Innovative Funding Tools

Although not a major focus of the market sounding, questions were also asked about other innovative ways that the government could reduce out-of-pocket costs for HSR. The following section outlines potential funding tools that warrant further consideration.

Land Value Capture

The general premise of land value capture (LVC) is that improved connectivity generated by new transit or transportation services increases land and development value around station areas. LVC tools seek to capture some of this increased value generated by a new transportation facility (i.e., station), to apply it toward funding the transportation project.9

One LVC tool that has gained media attention in recent years is tax increment financing (TIF), which forecasts increases in property values due to new transportation facilities (such as a new HSR station) and earmarks the forecasted property tax revenue increases to fund construction. In general, the market sounding respondents who commented on the application of LVC tools indicated that governments tend to overestimate the value that can be captured through such tools. It was also noted that the Province may be limited in its ability to capture such value, since the lands developed are generally owned by municipalities.

Overall, enthusiasm for these types of tools was relatively low; however, respondents did express interest in development opportunities that could be associated with HSR in Toronto, specifically at Union Station; if the Province were to pursue LVC tools in the future, any development or opportunities associated with Union Station and the surrounding area would certainly receive attention from the private sector. In September 2016 the City of Toronto proposed a Rail Deck Park over the western approach tracks to Union Station. If adopted, this future development would also have to be taken into consideration.

Station Retail and Parking

A number of respondents were interested in the potential for retail opportunities at HSR stations, suggesting that the Province could offer separate contracts for retail concourses, parking lots, air rights, and other ancillary businesses at HSR stations, for example, recouping costs by selling these rights to the private sector. Such place-making—that is, creating stations that themselves are “go-to” destinations—has been successful in other jurisdictions; in the U.K. HS1 retail and parking concessions account for approximately 10% of revenue.10

Opportunities connected to Union Station interested respondents the most but, as HSR ridership expands, key hubs such as Kitchener-Waterloo and London could also offer promising opportunities. Kitchener-Waterloo is currently developing a large multimodal hub for VIA Rail and GO services to connect to local feeder systems, such as the Waterloo ION LRT; London’s VIA Rail station is located on prime downtown lands that are largely undeveloped.

Neither potential opportunities associated with joint development nor revenue tools such as business levies and development charges were discussed during the market sounding. These tools have been successfully applied in the U.K. and future market soundings and analysis for HSR should consider researching them in greater depth. Below is a brief analysis of both of these tools.

Business Levies

Levies are a type of tax typically collected within a certain geographic area. Levies create a mechanism to ensure that those who will benefit from the construction of certain infrastructure (such as local residents or businesses) contribute to its cost. For example, in the U.K., London’s business community was highly supportive of the construction of the London Crossrail system, which will provide a crucial east-west link across the city and connect London Heathrow Airport to Canary Wharf, a major financial centre in the city’s east end. (See Case Study 5.)

A property impact study commissioned by Crossrail in 2012 concluded that property values around Crossrail stations would increase as a result of the project, with commercial office values around Crossrail stations in central London increasing by 10% over the next decade. Residential capital values immediately adjacent to the stations are projected to increase by 25% in Central London above an already rising baseline projection, and by 20% in the suburbs.11 Acknowledging the future Crossrail’s role in this “land value uplift,” London’s business community let Transport for London and the Greater London Authority implement a Crossrail Business Rate Supplement and a Community Infrastructure Levy to help pay for Crossrail.

Although these types of tools are sometimes criticized as disincentives for business and development, when the private sector recognizes the benefits of a project there is the potential for their involvement.

Case Study 5: London Crossrail, U.K.12

Key Lesson:

International example of a unique/alternative approach to working with the business community to fund and deliver a major transit project.


  • The Crossrail commuter rail project has gained an international reputation for its application of joint development; the cost of the project has been largely shared between the government, Transport for London (TfL) and the business community.
  • TfL and the Greater London Authority (GLA) are contributing over $11 billion, which includes levies paid by businesses that will benefit from the service, through the Crossrail Business Rate Supplement (BRS) and the Community Infrastructure Levy (CIL).
  • London businesses will contribute through a variety of mechanisms including joint development and the BRS, which alone will yield $6.8 billion.

Joint Development

Similarly, the London Crossrail project has had success with ventures such as “joint property development,” a term that in cases of railway station development applies when a private partner obtains the right to develop part of the site—either around or above the station—and in exchange participates in building the station, either by contributing financially or in kind, usually by constructing the station).13

Currently Crossrail Ltd. has joint ventures in place for six of its station sites, including at Canary Wharf, which includes plans for 9,000 square meters of retail space and a rooftop park. In exchange for agreeing to contribute $250 million towards the design and construction of the station and bearing the risk of any cost overruns, Canary Wharf Group plc obtained the rights to build a four-storey shopping centre above the station.14

This development-based land value capture tool requires a clear and strong business case and extensive engagement with the private sector. Further analysis to determine the applicability of joint property development for HSR stations in Southwestern Ontario would be worth pursuing.

Recommended Approach

The HSR project is still in early phases of planning. Although it is important to begin to consider financing and delivery models that could be applied to HSR, design and cost certainty cannot be known or understood until completion of the pre-design, assessment of the technical planning work and initiation of the EA process. Conducting a full VfM analysis on optional models for HSR before these key project phases are completed is challenging.

It is evident from the market sounding results that private-sector interest is high and that the market generally feels some form of AFP is both a reasonable and preferred way to finance and deliver the HSR project in Ontario, particularly a DBFOM model with a large private-sector consortium delivering it, potentially in packages of $5 billion.

Based on an assessment of international jurisdictions and feedback received during the market sounding, it is also evident that traditional models are a viable option. These are generally applied in markets where government knowledge of and experience with HSR is extensive (i.e., the U.K., Germany). However, not all European countries are continuing to pursue traditional models of delivery. As noted earlier, France, a country with an extensive history of HSR infrastructure delivery, has chosen to pursue a DBFOM approach for its new Tours-Bordeaux HSR line.

Given these considerations and others outlined throughout the chapter, the recommended approach at this point for the financing and delivery of HSR is as follows:

Recommendation 26: Financing and Delivery Models

The Province should conclude at a principles level that an AFP model (potentially DBFOM) is a viable option to finance and deliver HSR while ensuring that a full VfM analysis is conducted on AFP versus traditional models during the EA process.

Recommendation 27: Private-Sector Engagement

The Province should continue to engage key private-sector partners throughout the HSR project, including by potentially engaging in a follow-up market sounding during the environmental assessment process and once more project details become available. This should include re-engaging former participants as well as potentially broadening to other private-sector interests.

Recommendation 28: Federal Financing Experience

The federal experience with private-sector airport financing under the National Airports Policy should be examined to ascertain whether aspects of this model could be applied to HSR.

Recommendation 29: Innovative Funding Tools

The Province should consider innovative funding tools to help pay for HSR and/or stations, such as business levies, land value capture tools, and joint development.


1 Roll, M. and A. Verbeke. “Financing the Trans-European High-Speed Rail Networks: New Forms of Public-Private Partnerships.” European Management Journal 16, no. 6 (December 1998): 706‒713.

2 All Aboard Florida (2015). Passenger Train Travel.

3 Canada Line Rapid Transit Inc. (April 2006). Canada Line Final Project Report: Competitive Selection Phase.

5 Ontario Teachers’ Pension Plan (November 5, 2010). Borealis and Teachers’ agree to acquire HS1, UK’s only high-speed rail network.

6 California High-Speed Rail Authority (May 1, 2016). Connecting and Transforming California: 2016 Business Plan.

7 VINCI and Réseau Ferré de France (June 16, 2011). High-speed rail between Tours and Bordeaux: Réseau Ferré de France and VINCI sign world’s biggest rail concession contract.; and Balfour Beatty (2016). Innovation for the future ‒ Better delivery of Mega Projects.

8 Ibid.

10 Dusina, Manuel (March 5, 2014). High Speed Rail Finance 1 PLC. Standard & Poor’s RatingsDirect.

12 Crossrail Ltd. (2016). Funding; and Greater London Authority (2016). Paying for Crossrail: business rate supplement.

13 Abadie, Richard and Philippe Bozier (March 12, 2013). Which financial mechanisms for urban railway stations? A study conducted by PwC. La Fabrique de la Cité.

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