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CHAPTER 4 Guidelines for Public-Private Dialogue This chapter discusses needs, uses, and procedures for bringing highway and freight planners together with private-sector freight operators and other institutional players and lays out the types of actions and cooperative strategies that can be effective in cultivating relationships and forging partnerships between public- and private-sector entities. This chapter first focuses on three types of actions that can aid the development of relationships--the establishment of coop- eration, the positive techniques of conflict resolution, and the distribution of labor. It then prescribes six elements for the development of institutions: stable funding, organizational strategies, professional development, the promulgation of standards, multi-jurisdictional tech- niques, and land use actions. The design of transactions is described next in terms of two major categories of initiative: progress improvements and new market improvements. Topics include expediting projects, taking care of the community, and traffic assurance. The chapter concludes with methods for winning project support by addressing program priority and forming multi- party coalitions. 4.1 Cooperation First Many planners believe that the establishment of mutual cooperation in a public rail program must come before any serious investment in technical analysis. This is meant to prevent con- flict, but it presents practical challenges. Railroads have few resources specially assigned to pub- lic interaction, and those they have are dwarfed by the number and variety of agencies. Most rail personnel have other duties, cannot devote time to the nurture of relationships for their own sake, and require specific proposals to win their attention. Similarly, it is common for pub- lic organizations to have few resources devoted to freight, and fewer yet to consider railroad options. Moreover, relationships progress along an evolutionary path. Because public rail partnerships often are new endeavors, most agencies are at the start of the path; they cannot count on a mature rapport or appreciation of rail behavior to guide them in their dealings. Their railroad counter- parts frequently are in a comparable position, knowing their own business well and the public process less well, especially in its diversity around the country. While it is easier to form a lim- ited partnership around the particulars of a project and see whether a lasting relationship results, it is better to lay a foundation of understanding and shared purpose. This helps ensure that the right projects are proposed--ones that will fit the strategic focus and network priorities for both groups. Four steps can be taken to create cooperation: (1) initiation of advisory discussions; (2) provision of leadership and high-level contact; (3) application of freight advisory councils; and (4) situational adjustment. G-47

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G-48 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion Advisory Discussions Advisory discussions are a productive way to clarify the overarching goals and structural requirements of both public and private stakeholders. Such discussions should be considered by (1) public agencies whose relationships with their rail carriers are still maturing; (2) agencies that are further along, but want to improve their railroad dealings; and (3) railroads interested in public partnerships. The purpose of these discussions, preceding evaluation of any specific investment proposals, is to develop a foundation for proposals to succeed. It may be necessary for the parties to have one or more projects in view in order to justify the allocation of time and instill focus to the meetings, but even so, their deeper aim should be to reach an understanding of needs and to instill mutual regard. To reduce the ratio of public representatives seeking rail- road time to the number of railroad personnel, it can be desirable for states to organize these meetings jointly for their MPOs and themselves. Senior DOT officials reaching out to senior rail executives will be an expeditious way of causing the discussions to happen, and it will give such meetings an aura of importance. Finally, in the treatment of procedures for conflict resolution presented later in this chapter, there are precepts for bilateral decision-making that will be help- ful for managing advisory discussions and reducing the likelihood of disagreements. The objectives for these meetings would include Acknowledgement by both sides that the venture into mixed rail investment may be breaking new ground and should be developed together. Neither public agencies nor freight carriers have the leverage to force change on the other. A clear understanding of the priorities and processes that drive public and private investment allocations and of the assumptions about what will constitute success. The following chart gives examples of how perspectives can differ in each sector's approach to projects and the factors associated with them. Understanding and documentation by public agencies of the issues of greatest concern to pri- vate rail interests. Such issues may include taxation, liability, open access, capacity allocation, and management of core assets. Resolution of such issues may, in some cases, be a prerequisite for moving forward on collaborative investment proposals. Comprehension and acknowledgement by rail carriers of the public accountability required for use of taxpayer-supported funds. Rail carriers need a good grasp, for example, of how the Exhibit 4-1. Public and Private Perspectives.

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Guidelines for Public-Private Dialogue G-49 benefits from public rail investment must be tracked in order to compete with other modes for infrastructure spending. Agreement on a shared process to better track and publicize the benefits of rail transportation to key decision makers and the public at large. A specific public information program jointly supported by public agencies and the private freight carriers would provide an additional plat- form to build confidence and prove the value of public engagement to the carrier community. A specific product such as the public information and rail impact-tracking program described above may serve as an inducement for serious, early engagement by the private freight carriers. The overall goal is establish joint ownership of the targeted projects rather than to have either the public agency or carrier in the position of selling the merits of an initiative to the other side. The budget, level of staff, and rail knowledge of public-sector players can prove crucial to gain- ing the degree of carrier engagement that brings success to a public rail program. Carriers will commit resources when given a prospect of real deliverables and a serious, long-term commit- ment by a state or other agency to fund attractive projects. States whose programs are seen as effective by peers have a history of substantive rail funding and staffs that understand the com- plexity of railway operations. Leadership and High-Level Contact Delivery of developmental objectives like those outlined above depends in large measure on having the right kind and level of people participating. Since new ways of doing business may be devised, those present at such meetings should have the power to work from organizational needs, rather than public policy positions or company protocol. To that end, the following actions will be useful: Foster high-level contacts between top railway and public agency executives if rail initiatives are expected to become a major element in local programs. States that have done this single it out as a key reason for their success in gaining carrier cooperation and in executing projects on the ground. Such contacts also establish a relief channel to get discussions moving if parallel (and more frequent) lower level talks break down. A DOT secretary, top lieutenant, or mayor working with a railroad CEO or senior vice president typically is the right kind of contact, provided the parties have a more than superficial commitment to the value of partnership. Provide initial leadership by state officials. Many rail projects have significance at the state, if not the regional level, even if they may be led by MPO or other local units of government. State leaders also are better positioned to address the broader non-transportation issues (such as liability or taxation) that may surround a carrier's willingness to consider alternate ways of doing business. Consider professional facilitation. Described at greater length under Section 4.2, Conflict Res- olution, professional facilitation may be required to ensure that foundational issues remain the focus of the advisory meetings. Planning and carrier officials both may leap to specific sce- narios and potential projects before detailing and documenting the full context into which such projects must be launched. Limit stakeholder attendance at advisory meetings to a handful of public and railway officials. Private firms are wary of large-scale meetings that may serve as a platform for airing of griev- ances by interest groups. Freight Advisory Councils Support for public rail funding ultimately relies on a broader set of interests than those rep- resented in the rail carrier community. Shipper groups, motor carriers, MPOs, environmental

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G-50 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion groups, land use planners, and economic development interests all have a stake in efficient, bal- anced transportation investment. Freight advisory councils (FACs) are used by many states and urban areas to gather input on stakeholder concerns and provide policy input to public agencies on transportation priorities. Usually FACs are not convened expressly to treat rail issues, but railroads and their potential cus- tomers commonly are members, and the councils can be well placed to step into this role. Such groups typically are facilitated by public agencies, but should include sufficient private-sector leadership to be credible in the eyes of citizens and legislators, when it comes to the economic rationale for investment of tax dollars. Councils also can perform the crucial function of deliv- ering an early reality check on the commercial attractiveness of proposals to develop or enhance rail facilities and the ability to divert highway traffic such as FAC members themselves may manage. Councils should be called on critically, but not constantly. The limited time available to mem- bers of advisory groups means that a specific list of possible rail policies and projects should first be developed by the sponsoring agencies. A draft description of the project assessment princi- ples to be employed should be brought before this group early on to preempt concerns over the fairness of the capital allocation process. Agencies in states with active FACs should draw them into freight rail issues, if they are not already engaged. Others should urge their formation. There are many examples of how to pro- ceed with this; one from the State of Florida is discussed in the inset box. Freight Advisory Council: Florida The Statewide Intermodal Transportation Advisory Council (SITAC) was created by the 2003 Florida Legislature to advise and make recom- mendations to the Legislature and the Florida Department of Trans- portation on policies, planning, and funding of intermodal transporta- tion projects. Initial responsibilities of the SITAC are to coordinate with the Florida Transportation Commission on the development of a man- dated assessment of regional transportation in Florida and to supply input on the initial draft strategic plan for the Florida Strategic Inter- modal System. The FDOT Office of Policy Planning (OPP) gives administrative sup- port for the SITAC. The OPP also provides project management for development of the SIS strategic plan. The FDOT Seaport Office, part of the Public Transportation Office, is responsible for programs relating to seaports, intermodal development, and planning for freight move- ment/intermodal connections. The SITAC meets on a monthly schedule. The members are appointed by the Governor (5), Senate President (3), and Speaker of the House (3). The current members include representatives from each of the modes, as well as the Florida Space Authority and various port interests. Situational Adjustment Freight carriers always care about operational improvements and cost reductions, and rail- road capital programs normally have projects underway of this type. Some railroads also care for network and business expansion and their interest is particular to their own circumstances and the locality. Public planners should evaluate how the projects they are contemplating match with

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Guidelines for Public-Private Dialogue G-51 the situation and behavior of the carriers. For instance, a railway's financial condition plainly will shape its motivations, so that a company whose position is straitened will be acutely concerned for the near term and not very much for the long. Similarly, its planning horizon may be fore- shortened if it is preparing itself for a possible merger or trying to demonstrate immediate returns to Wall Street. Operational improvements--and there are many examples of opera- tionally oriented projects with significant public benefits--may win the support of these carri- ers, where new traffic development may not. Carriers intent on expansion will reveal this by their public pronouncements, the programs they support, and the level at which they support them. They may be able to tackle only a few at a time, and fewer than their many public jurisdictions may wish, but they will be committed partners for both operationally driven and development- driven initiatives. In short, public planners should adjust their proposals to railroad motivations and should seek to understand those motivations. By doing so, planners may be able to reach a project-based consensus with the carrier, regardless of whether they can reach consensus on other issues between them--and this may be sufficient to the purpose. For the carrier's part, public proposals should be viewed with flexibility, because there is a range of ways for the railroad to participate. At one extreme, carriers can facilitate corridor access and the development of specialized rail services that would operate with substantial autonomy and little management interaction with the main carrier. This option (which is just short of line sales) may be appropriate for railroads with limited planning horizons. It may allow them to derive revenue when they otherwise would not, particularly at times or in locations where capacity is slack or where the public sector helps to enlarge it. Use of this option can be seen today in the short-haul inter- modal market. At the opposite end of the spectrum is a full service-integration model, where the railroad mingles a new service offering with existing traffic, while accepting public contributions of capital for track capacity, rolling stock, or terminals. Even when projects and participants are in harmony, conflicts will arise. Some of them may derive from the everyday interaction of the railroad with the community--carriers who keep a clean house with regard to this may find it easier to focus on larger opportunities and diminish opposition to rail investment schemes. (Similarly, numerous projects that have actively treated community concerns count this among the reasons for their success.) Other disputes may be addressed by broadening the terms of discussion from a narrow point of complaint to the more systematic matter it may manifest. Examples of how this may be done appear in Exhibit 4-2. Finally, challenging conflicts may be encountered because of entrenched positions, adversarial histories, competitive apprehensions, or the sheer stakes of a project. Organized methods of con- tending with them, including techniques for improving the general process of public-private deci- sion-making, are presented next. Exhibit 4-2. Underlying Issues and Their Resolution.