Pedestrian Tunnel to Billy Bishop Airport Breaks Through

 
Project Marks Significant Milestone
 
The Toronto Port Authority announced that the Pedestrian Tunnel Project has passed the halfway mark. The core of the pedestrian tunnel to Billy Bishop Toronto City Airport is now fully excavated, with tunnelling equipment having broken through to the island-side.
 
"This is a watershed moment for our passengers. The pedestrian tunnel is well on its way to being complete, now that the most technically difficult element of the project is behind us," remarked Toronto Port Authority Board Chairman, Mark McQueen. "The tunnel will demonstrably add to the airport's superior customer experience.  And by balancing out passenger flows, traffic congestion will be reduced, which is an important benefit for the ever-growing residential community that has been attracted to Billy Bishop Airport's neighbourhood."
 
Excavation of the main pedestrian tunnel began in June 2013 with the creation of two six-foot tunnels dug by Canadian-made tunnel boring machines dubbed 'Chip' and 'Dale'.  Work on the seven small "crown" shafts, two of which host new City of Toronto water and sewer mains, began in December 2012.  The Project's next phase is the construction of the pedestrian tunnel skeleton, with completion of this element expected at the end of the year.
 
"The Pedestrian Tunnel Project is an important piece of infrastructure that will support the airport's success and future growth," commented Mr. Richard Abboud, President and CEO of Forum Equity Partners. "We look forward to the continued growth of our relationship with the Toronto Port Authority and the community as we progress towards future project milestones."
 
"PCL is proud to be involved in this historic project that is set to become the world's first underwater pedestrian tunnel connecting an airport to mainland," said PCL vice-president and district manager Bob Martz. "This breakthrough today is an important milestone that brings us one step closer to providing the passengers who travel through Billy Bishop Toronto City Airport with a reliable, efficient, and convenient access route."
 
"I simply cannot say enough in congratulating a committed team that worked so diligently to get this tunnel in place" said Technicore CEO Tony DiMillo. Our in-house designed and built tunnel boring machines performed flawlessly, with some very innovative concrete design and placement techniques."
 
The Pedestrian Tunnel Project is being built through a public-private partnership model led by Forum Infrastructure Partners.  An eight-part consortium is responsible for building, financing and operating the tunnel.  The TPA retains ownership of the tunnel throughout the life of the P3 concession period.
 
The Project consortium recently held its 9th Tunnel Construction Committee meeting on July 30, 2013 at the Harbourfront Community Centre.  Representatives from Forum, PCL, and the TPA outline the status of the construction process and answer questions of those in attendance.  The next session is scheduled for September 24, 2013.  Minutes of earlier meetings may be found here.
 
When complete, the pedestrian tunnel will have four sidewalks (two north and two south) moving at 2.3 kilometres per hour. From a bank of six elevators on the mainland side, passengers will go 100 feet down to access the tunnel and travel 800 feet underneath the Western Gap to escalators which take passengers to the airport's check-in area. The complete journey will take less than six minutes, and will dramatically improve passenger flows while removing the risk that ferry passengers have to wait for a second crossing during peak periods given the Marilyn Bell I's 200 passenger limit. Passengers will also notice shorter check-in and security screening lines as travellers will no longer be arriving at the airport terminal in four ferry "waves" per hour, as is currently the case.
 
Construction began on the Pedestrian Tunnel Project in March 2012. The pedestrian tunnel will link Billy Bishop Airport to the mainland and provide enhanced service and convenient access for airport users. Project completion is expected in the second half of 2014.
 
For more information on the Pedestrian Tunnel Project visit www.torontoport.com or www.bbtcatunnelproject.ca.
 
Tunnel Schedule
 
Toronto (August 23, 2013) — The innovative partnership between the Toronto Port Authority and Forum Infrastructure Partners is designed to ensure that the pedestrian tunnel project comes in on time and on budget.
 
The tunnel will be open for business by Fall 2014. The total cost of construction is $82.5 million.
 
Key timelines in the construction process are as follows:
March 2012 Preparatory work, including relocating city utilities to allow for the city's water mains and tunnel shafts
April 2012 Drilling and excavation starts on mainland shaft.  Excavation directly underground to a depth of 100 feet
December 2012 Tunnelling begins. Arrival of Canadian-made tunnel boring machines to create drifts for the tunnel crown
February 2013 First drifts break through to the island side
March 2013 Installation of city mains into crown drifts commences
June 2013 Horizontal tunnel excavation begins
June 2013 Central core of excavation breakthrough
December 2013 Completion of the tunnel skeleton Completion of installation of city utility mains
April 2014 Island-side atrium completed
June 2014 Mainland pavilion exterior completed
July 2014 Final site work and landscaping
 
     
FAST FACTS: Tunnel Construction
800 Length of tunnel in feet
10 storeys Depth of tunnel underground
4 Number of moving sidewalks
2.3 Km/h of moving sidewalks
950,500 Enplaned (i.e. departing) passengers in 2012
$20
Current Airport Improvement Fee (AIF) for each enplaned passenger, a portion of which will cover the tunnel's annual Service Payment
$8.6 million
Annual Billy Bishop Toronto City Airport (BBTCA) passenger AIF payments required to pay for tunnel's construction, operation and maintenance
1 New coffee shop on mainland
$82.5 million
Total construction cost, 100 per cent financed by the private sector and ultimately paid for by a portion of the existing $20 BBTCA passenger AIF
$103,000
Price per foot for airport pedestrian tunnel versus the
estimated $190,000 price per foot of the recently-completed Simcoe Street vehicle underpass
Fall 2014 Start of operations
2 Number of custom-made tunnel boring machines
 
 
QUESTIONS & ANSWERS
Tunnel Financing and Schedule
 
1. What will the tunnel cost?
 
The tunnel is being built at no cost to taxpayers.
 
When the final public-private partnership consortia proposals were received in the Fall of 2011, the three shortlisted proponents came in with far higher construction costs than the Toronto Port Authority's (TPA) independent engineering advisors had originally forecast in 2009.
 
The TPA's working cost estimate for a tunnel that would extend from the city-side to the Porter Terminal was $65 million (with a 10 per cent overage estimate).  The winning consortium bid a construction cost of $82.5 million, 100 per cent of which is being paid for and financed by the successful private sector consortium.
 
This cost increase can be explained by four factors: i) the tunnel will now connect to the new Porter Terminal, rather than the airside Passenger Transfer Facility as was originally anticipated by the TPA in 2008 and 2009. As such, the length of the underground tunnel has grown by 50 per cent; (ii) all three proponents advised that the tunnel should be built deeper than had originally been expected, which added to the construction cost; (iii) the construction associated with the Pan Am Games put upward pressure on trade costs in 2013; and iv) the proponent has assumed all liability for cost overages under the proposed contract.
 
2. What does the higher construction cost mean to BBTCA passengers?
 
In 2010, the BBTCA passenger Airport Improvement Fee (AIF) was increased to $20 per outbound passenger from $15 in anticipation of this project.  There is no plan to increase the AIF.  At Toronto Pearson, the AIF for outbound passengers is $25.
 
Although the winning proponent's construction cost was higher than the TPA's independent advisors had originally forecast, the proponent's financing cost is substantially lower than had been originally expected by the TPA's independent financial advisors.
 
The TPA had tentatively budgeted the annual service payment to be $8.7 million for a pedestrian tunnel that would cost the private sector $65 million to construct. The actual annual service payment required by the winning consortium is $8.6 million, due in part to the tunnel's lower financing cost.
 
In 2012, the TPA collected more than $19 million in AIF from BBTCA passengers via the current $20 fee charged to outbound passengers. These fees are used for airport capital expenditures.  As such, less than half of the AIF collected annually is required to meet the consortium's annual pedestrian tunnel Service Payment.
 
The relevant financial figure is the annual Service Payment to the private sector consortia, as that's what the passengers must cover via the BBTCA AIF.
 
3. Is the project guaranteed or financed by the Federal Government in any way?
 
No.  Under the Canada Marine Act, the Toronto Port Authority is a Business Enterprise, and not a "Crown Corporation," for example, and cannot receive direct funding or tax dollars from the Federal Government.  The Pedestrian Tunnel project is neither being underwritten nor guaranteed by the Federal Government, as the TPA itself is an arms-length entity of the Parliament of Canada.  The TPA has no taxation powers, and by law must be financially self-sufficient.
 
4. How many AIF-paying passengers does the airport need to cover the annual tunnel Service Payment?
 
In 2012, BBTCA saw 2.3 million passengers, with 950,500 (departing/enplaned passengers only) paying the AIF; this worked out to be over $19 million in aggregate AIF payments.  The 2013 forecast is for 2.4 million passengers in total, with nearly one million departing passengers paying the existing $20 per passenger AIF.
 
To cover an $8.6 million annual service payment plus basic airport maintenance capital expenditures solely out of the AIF, the BBTCA would need about 460,000 departing passengers per annum, versus the 2012 count of 950,500; and the tunnel should increase aircraft seat utilization once completed.
 
As the BBTCA generates landing fees and other rent for the TPA, there are additional revenue streams beyond the AIF that add to the TPA's financial strength.
 
To date, the TPA has already accumulated approximately $16 million in AIF payments that have not been spent on airport capital expenditures.This sum, plus what is generated over the next two years, helps to reduce the annual Service Payment over the next 20 years.
 
This sum provides a multiyear buffer should traffic drop dramatically for an extended period of time thereafter, and the TPA needs to use this accrued AIF "bank account" to cover any future shortfall in the AIF collected to meet the annual Service Payment.
 
5. How secure is the Consortium's debt commitment?
 
A portion of Forum Infrastructure Partners' sub debt is being contributed by the Ontario Pension Board, while the senior bank debt is being provided by NORD/LB, a highly-rated German bank.  The bank debt has a term of 10 years. 

 

on August 23, 2013