04 February 2005

Outside the Box - The Stunnel

Call it the Stunnel.

If the Channel Tunnel became the Chunnel, then the name for our fixed link makes sense. Stunnel is also a good name for an idea that is pretty stunned when you look at it a little more carefully.

A couple of Scandinavian social scientists wrote a book last year called Megaprojects and Risk. After studying a bunch of European projects like the Chunnel, they came to a set of surprising conclusions: first they found that proponents grossly overestimate the benefits of their Big Idea. Second, proponents grossly underestimate all the costs.

Consider the Stunnel idea. According to the Stunnel web site, the project would cost $1.3 billion or thereabouts. It would need an average of 1400 cars traveling across it per day, with a peak of 3, 000 per day, in order to be viable. Proponents also claim it would produce upwards of 40, 000 direct and indirect job during construction, although this would last for a total of 3 years. Using the ever popular argument, proponents say the Stunnel would be an engineering marvel and attract tourists from around the world.

Let’s just look at the traffic flow. Right now, the main surface carriers are Marine Atlantic and Oceanex who between them carry 882 vehicles per day into the province. Even if we closed those two carriers and forced everyone to use the Stunnel, we’d still only have 63% of our break-even average. Obviously, we need more people to use the Stunnel.

Tourism, you say? Well, consider that the largest number of tourists come to the more populated areas of the country. For Newfoundland and Labrador, that means that surface travelers come through Atlantic Canada and cross the ferry to add Newfoundland to a tour. Would they come through one of the most desolate parts of Quebec to get here? Doubtful. As for those engineer groupies, think of how many tunnels Kierans and company say have been built in warmer places? If I loved holes in the ground, the last place I’d go to see one is the Straits of Belle Isle where it is freezing cold in June.

Right from the start, the very reason for building the Stunnel – lower costs owing to large usage - goes out the window. Even if we forced everyone to use the Stunnel, and allowed some reasonable rates of growth in traffic, it would be years, maybe decades, before there was enough traffic to meet the break-even traffic numbers Kierans says his project will need from the beginning.

Consider our own recent experience. The Tobin government started building a road around the southern coast of Labrador to meet up, ultimately, with the highway out of Labrador City. There were plenty of promises of great benefits. Already, we have found that shipping goods to northern Labrador ports is more costly than sending them from Lewisporte. The roads can’t be kept open to traffic in winter, and if that wasn’t bad enough, we already know from the Auditor General and PriceWaterhouseCoopers that the province can’t maintain its existing roads.

There are already signs that Labrador is coming more closely connected to Quebec than the island. The Stunnel would link the whole province to Quebec via an isolated stretch of road. We’d move away from the short routes to our historic partners in the Maritimes and New England and link up with Quebec City. That’s a big strategic implication that can’t be overlooked.

As for cost, we have only seen the beginning of the escalations. The proposal is only a couple of years old and already Kierans and company have tripled the costs. The $1.3 billion project that Danny Williams bought into three years ago is already estimated to cost $4.3 billion. Megaproject proponents grossly underestimate costs. They’ve shown that already. As for traffic flows, the higher the cost, the more cars we need to make it pay. If we don’t have enough traffic to support the first cost estimate, where are the cars coming from to support a project three times as costly?