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Value-For-Money Audit: Metrolinx Operations and Governance (2020)

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Value-For-Money Audit: Metrolinx Operations and Governance (2020) Office of the Auditor General of Ontario Value-for-Money Audit Metrolinx Operations and Governance December 2020 Metrolinx Metrolinx Operations and Governance Metrolinx employed the equivalent of 4,197 1.0 Summary full-time staff. Since 2014/15, Metrolinx has had increasing operating deficits that have been subsid- ized by the province. It will face further financial Metrolinx is a government agency that plays a key pressure as a result of the COVID-19 pandemic. role in public transit services in Ontario. Metrolinx Regarding its train and bus operations, Metro- operates GO Transit trains and buses in the Greater linx’s on-time performance for GO trains—its Toronto and Hamilton Area (GTHA) and the ability to keep the trains on schedule—has been Union Pearson (UP) Express from Union Station in between 92% and 95% during the last five years, downtown Toronto to the Toronto Pearson Airport. and for buses approximately 95% consistently. Its It also awards and manages the contracts for the on-time performance for trains is comparable to electronic fare system PRESTO, which enables rid- that of other transit agencies in the United States ers to tap a PRESTO card to pay for fares on buses and the United Kingdom. While overall on-time and trains in municipalities across the GTHA and in performance for trains and buses is positive, Ottawa on OC Transpo. Metrolinx should continue to focus on improving Metrolinx has also been tasked with planning the performance of those train and bus routes and and rolling out a fare system that would be inte- lines with a high number of delays or cancellations. grated across the GTHA. An integrated fare system We found that the delays and cancellations for would mean that riders would pay one fare when trains were mainly related to the services provided crossing municipal boundaries. For example, on a by Canadian National Railway (CN), Canadian trip starting in Mississauga and ending in Toronto, Pacific Railway (CP) and Bombardier. Metrolinx a rider would pay a single fare, instead of pay- needs to collect more information on bus delays to ing one fare for a MiWay bus in Mississauga and determine how to make further improvements on a second fare for a Toronto Transit Commission its on-time performance for buses. (TTC) subway ride, as they do currently. For the electronic PRESTO fare system, Metro- Metrolinx’s responsibilities are set out in the linx is highly dependent on its service provider Metrolinx Act, 2006 and in a Memorandum of Accenture. The Ministry contracted Accenture Understanding with the Ministry of Transportation in 2006 to build an electronic fare system with (Ministry). capability for flat fares (same fare regardless of In 2019/20, Metrolinx’s total operating costs the distance travelled) and zone-based travel (fare were $1.151 billion and as of December 31, 2019, based on the number of zones crossed in one trip); 1 2 fare system equipment (for example, tap devices); and is responsible for setting strategic direction. an initial website; and capability for customer The Board is also responsible for identifying, man- service access such as in-person, via telephone aging and monitoring key risks, such as passenger and email. Since 2006, Accenture’s scope of work safety; Metrolinx’s financial performance; capital increased to include services including deploying projects; and technology and cybersecurity (see PRESTO on the TTC in Toronto and OC Transpo our related 2020 audit, Information Technology (IT) in Ottawa. Systems and Cybersecurity at Metrolinx). Metrolinx’s The Ministry’s original contract with Accenture Board composition has changed since 2018, and our totalled $231.7 million. Metrolinx took over the review of governance confirmed improvements in contract with Accenture in 2011. As PRESTO servi- governance processes. ces expanded after 2012, Metrolinx engaged Accen- ture for additional work worth over $1.7 billion Operations under the existing agreement without competitive procurements. Metrolinx has grown significantly • Although Metrolinx plans to competitively dependent on Accenture, a situation about which procure the services Accenture currently Metrolinx’s Board has expressed concern to man- provides in anticipation of the PRESTO agement over the years. Nevertheless, Metrolinx contract expiration, Accenture may have continued to approve the contract increases. The an advantage in being chosen for this contract between Metrolinx and Accenture is work. The services Accenture currently pro- currently not managed under Metrolinx’s Vendor vides include operating the core IT software Performance Management System. This means system and piloting an open payment capabil- that, unlike the arrangement with other service ity. Despite Metrolinx’s intent to competitively providers, Metrolinx does not assess and review procure this and other services in future, we Accenture’s performance every six months and noted that between October 2019 and April provide a performance rating that would form part 2020, Metrolinx engaged Accenture, under of Metrolinx’s evaluation of bids from Accenture for the existing agreement, to develop and pilot future contracts. an open payment capability on UP Express Since the launch of PRESTO in 2010, riders have and for additional maintenance work within not yet had two key elements: the convenience of the current PRESTO system for approximately integrated fares across the GTHA; and the ability $53 million. Metrolinx launched the pilot to use their own debit or credit cards to tap and to meet customers’ expectations and dem- pay—a feature called “open payment.” In the latest onstrate progress with PRESTO’s ability to plans to modernize PRESTO, senior Metrolinx accept different forms of payment. Engaging management had originally planned to implement Accenture to deliver the open payment pilot open payment no earlier than 2022, when Accen- work could likely give Accenture a further ture’s main contract agreement expires. However, advantage over competing service providers Metrolinx’s CEO and Audit, Finance and Risk Man- when all the PRESTO systems and services agement Committee pushed to expedite the project. are tendered. In 2019 and 2020, Metrolinx engaged Accenture • After 14 years, PRESTO has still not to deliver a pilot project for open payment on UP been fully adopted in the GTHA. One Express under the existing agreement and did not of the key objectives of the PRESTO fare conduct a competitive tender process. card system was to seamlessly connect GO A qualified Board of Directors oversees Metro- Transit and municipal transit agencies in the linx’s operations through its Chief Executive Officer GTHA. PRESTO use by riders has increased Metrolinx Operations and Governance 3 substantially in the last decade, with an Bombardier contracts without a standardized overall adoption rate across the GTHA of approach. The main instrument for managing 71%. However, the adoption rates vary by Bombardier’s contract performance has been municipalities. For example, in Durham issuing liquidated damages—compensation Region, it was only 37.5% as of January 2020. for specific breaches of contract. However, One of the reasons for this low adoption rate there was no consistency between the two is that Accenture has not been able to have teams in collecting and analyzing data with PRESTO offer the same discounted fare to respect to Bombardier’s performance and post-secondary students that they currently issuing liquidated damages. According to enjoy with the Durham Region UPass. About Metrolinx, it will be rolling out in-house stan- 30% of Durham Region Transit’s riders dard reports and analyses for trending train are post-secondary students. Three post- delays caused by Bombardier’s rail equipment secondary schools contracted with a third and train crew operation service issues on a party to create an app to enable a student monthly basis by February 2021. discount on Durham’s transit system. If this • Metrolinx has limited data on bus delays third-party UPass solution is rolled out, and cancellations to understand how students will have no incentive to switch to further improve the reliability of bus to PRESTO. services. On a daily basis, there was an aver- • Commuters still do not pay one fare when age of 101 bus delays and 2.4 cancellations they cross city boundaries. Metrolinx’s from 2015/16 to 2019/20. We noted that vision for integrated fares across the GTHA Metrolinx does not have an effective system would allow riders to pay just once when in place to track the reasons for bus delays they cross regional and municipal boundaries or cancellations when they occur. Metrolinx using different transit systems. In our 2012 uses a manual process for capturing some bus audit, Metrolinx—Regional Transportation delay reasons and lacks complete informa- Planning, we recommended that Metrolinx tion to understand how to further improve work with the provincial government and the reliability of bus service, especially on GTHA transit agencies to make progress on the routes that are most affected by delays implementing fare integration. However, we or cancellations. found that little progress had been made at • Metrolinx established the Service Guar- the time of this audit. antee Program to improve customer • Metrolinx has not consistently tracked satisfaction and drive customer loyalty and the cause of train delays and cancella- retention; however, customer satisfaction tions related to Bombardier. Bombardier with the claim submission process has provides the crews to operate all GO rail been low. GO train riders can claim a refund trips and solely maintains the entire GO train within specific parameters when trains are fleet. Between 2015/16 and 2019/20, train late or cancelled. According to Metrolinx’s crew operation issues related to Bombardier overall customer satisfaction survey results, resulted in 2,353 train delays and 211 train customer satisfaction with the Program’s cancellations. In the same time period, equip- claim submission process ranged from 57% ment issues related to Bombardier resulted to 63% over the last five years.
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