DRIC bridge on Detroit River big loser - Conway report

June 1, 2011

The heavily championed Detroit River International Crossing (DRIC) bridge would likely lose over $230m a year or $4.75b over 20 years 2016-2035 according to a report by Conway MacKenzie (Conway), specialists in turnarounds and financial crisis management.  And beyond 2035 it would continue bleeding financially. The report was commissioned by the Ambassador Bridge company which opposes the government sponsored DRIC bridge.

Losses would likely be split about two-thirds Canada, one-third US, they estimate.

Conway find the traffic and revenue at the Detroit Michigan border is insufficient to support the $3.2b government bridge even if it were to get all the traffic, and the three existing crossings (Ambassador Bridge, Detroit-Windsor Tunnel and Blue Water Bridge) were closed.

The entire toll revenue market at the Michigan-Ontario is put at $159m/year in 2016 but by comparison the DRIC alone would have debt service requirements of $307m/year, according to a calculation based on traffic studies by Halcrow.

Halcrow put total Michigan-Ontario crossing traffic at 11.35m cars and 4.17m trucks in 2010 growing to 13.01m/5.39m in 2020 and to 14.64m/6.58m 2030.

The opening of a DRIC bridge in 2016 would take traffic mainly from the nearby Ambassador Bridge and Detroit Windsor Tunnel but some also from the Blue Water Bridge, they say.

Canada the report says would take the biggest losses - because they are financing the expensive Windsor Essex Parkway approach road and have offered to fund $550m needed for Michigan approach roads and the I-75 interchange.

Sensitivity analysis shows that more optimistic traffic forecasts reduce the prospective losses slightly but come nowhere near closing the DRIC's huge deficit gap.

Based on Wilbur Smith's more optimistic traffic projections the DRIC bridge losses would be $30m/year less or just over $200m/year or $4.1b over 20 years.

The Conway report notes other risks in the project:

- the lack of any business plan with financial projections

- an unknown operator

- unidentified financing

- possible construction cost overruns

The study says bluntly: "the DRIC is not a viable investment."

On Conway MacKenzie:


copy of Conway report:


COMMENT: Michigan Governor Rick Snyder has expressed enthusiasm for the DRIC bridge, but on the basis that Michigan taxpayers are not "on the hook" for any losses. If the Conway report is anywhere near an accurate assessment he'll have to concede at some point that the project is not viable, or break his promise about taxpayers being kept "off the hook."

The DRIC enthusiasts will loudly denounce the report because of its Ambassador Bridge sponsorship but a fair question will be: "Where exactly is Conway wrong?"

And: "Where are your financial projections, and what is your financing plan?"

The real test will come when proposals are sought from the private sector for financing the project in return for toll revenues. Will those proposals require a taxpayer "hook"? - editor

CRITIQUE: see a counter-argument to this


TOLLROADSnews 2011-05-31

Leave a comment:

Upcoming Events