Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects (2015) / Chapter Skim
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Pages 28-33
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From page 28... ...
28 Funding and Financing Rail Projects 4.1 Funding vs. Financing The terms funding and financing are often confused or used interchangeably.
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Funding and Financing Rail Projects 29 When revenues (i.e., funding) associated with a project or service are expected to be sufficient to cover the overall costs of the project or service, financing is relatively easy and can be accessed through commercial financial markets.
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30 Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects 4.2.2 Passenger Rail Revenues Passenger railroad revenues largely consist of revenues from the sale of tickets. Different ridership revenue models can include different ticket prices based on type of ticket (e.g., economy vs.
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Funding and Financing Rail Projects 31 Instrument Descripon Retained Earnings (Cash) Cash available aer operang expenses, debt service, taxes, and dividends to shareholders.
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32 Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects 4.4 How to Realize Rail Projects That Have a Funding Gap? Financing is typically not available to projects or services that have a "funding gap." Indeed, a funding gap -- when revenues are insufficient to cover the cost of a project or service -- is a funding, rather than a financing, problem.
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From page 33... ...
Funding and Financing Rail Projects 33 Public funding is used when a rail project or service has a funding gap and that project or service is deemed to provide a net public benefit worthy of public investment. Public funding mechanisms generally include grants or other capital contributions (for capital investments)
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