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Pages 93-108

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From page 93... ... 93 This chapter provides a discussion of opportunities and potential strategies -- beyond mechanisms for funding and financing rail projects and services -- to realize rail projects and services. The options discussed in this chapter are provided for consideration and debate and should not be construed as recommendations. Read the entire page →
From page 94... ... 94 Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects Need for a Better, More Systematic Basis for Assessing Rail Project Benefits Benefit-cost analysis (BCA) -- comparing a project's total benefits to society to the total cost of the project -- is a standard approach for assessing the public merits of a project. Read the entire page →
From page 95... ... Beyond Revenue and Financing Mechanisms: Opportunities and Potential Strategies to Realize Rail Projects with a Funding Gap 95 typically highly speculative can devalue the significance of the project's calculated potential benefits. A more robust, consistent, and systematic framework is needed for assessing the full potential benefits of rail projects. Read the entire page →
From page 96... ... 96 Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects 8.2 Establishing a Stable, Predictable Funding Source for Passenger Rail 8.2.1 Context Railroads require long-term infrastructure assets, which in turn require long-term funding and financing solutions to ensure sustainability. Major investments are typically required during planning and construction, followed by lumpy investments throughout the life of the railroad to ensure service levels and safety are maintained (e.g., track upgrading, rolling stock upgrades, and technology improvements) Read the entire page →
From page 97... ... Beyond Revenue and Financing Mechanisms: Opportunities and Potential Strategies to Realize Rail Projects with a Funding Gap 97 One way to increase private-sector investment into rail passenger markets could be to structure the public services as contract services with contract terms related to the term of the investment risk (i.e., a private investor would not invest in equipment with a life of 50 years to service a 2-year operating contract unless there was a viable market for the equipment after the term of the operating contract) Read the entire page →
From page 98... ... 98 Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects some federal assistance. However, this allocation of funding from the HTF to commuter and mass transit was, and still is, a point of concern across many sectors of industry. Read the entire page →
From page 99... ... Beyond Revenue and Financing Mechanisms: Opportunities and Potential Strategies to Realize Rail Projects with a Funding Gap 99 Some of the options above involve applying a fee to road-based users that would then be partially used toward passenger transportation. Using this type of approach coupling road user charges with passenger rail service is likely to present legal issues, because the service providers (e.g., state highway and municipal government) Read the entire page →
From page 100... ... 100 Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects transport funding programs, the TIGER program provides a good model for a multi-modal coordination and funding. TIGER is a discretionary grant program, although it does have an explicit objective to generate an equitable distribution of money over geographical areas and modes. Read the entire page →
From page 101... ... Beyond Revenue and Financing Mechanisms: Opportunities and Potential Strategies to Realize Rail Projects with a Funding Gap 101 8.4 Establish Model Institutional and Commercial Frameworks for Complex, Multi-Party Corridor Improvement Projects 8.4.1 Context One of the most difficult obstacles to financing investments for private freight railroads that have significant public benefits is the coordination of various interested parties and the trading off of private ownership rights for potential greater benefits from a joint investment in improved infrastructure. The NORG project is an example of this difficulty. Read the entire page →
From page 102... ... 102 Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects for this has been driven by the complexity of the rail environment in the United States (multiple private railways control most of the existing rail infrastructure except in the largest urban areas where some public rail infrastructure exists) and the similar complexity of the public environment (with cities, counties, suburban cities, public authorities, states, and state authorities) Read the entire page →
From page 103... ... Beyond Revenue and Financing Mechanisms: Opportunities and Potential Strategies to Realize Rail Projects with a Funding Gap 103 8.5.2 Challenge Many government agencies have limited knowledge about PPPs and related expertise and resources. PPPs often immediately become adversarial relationships because government procurement is not set up for long-term partnerships in which not all problems can be defined in a contract at the outset and reasonable solutions have to be negotiated along the way. Read the entire page →
From page 104... ... 104 Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects • Benefits of centralizing technical expertise in one unit, staffed with experienced professionals (e.g., financiers, lawyers, and economists) who are well placed to negotiate with, and understand the needs of, the private sector; often establishing an independent unit (arms-length from government) Read the entire page →
From page 105... ... Beyond Revenue and Financing Mechanisms: Opportunities and Potential Strategies to Realize Rail Projects with a Funding Gap 105 freight railroads need to cover themselves. Next, imposition of an arbitrary limitation on damages has not been fully litigated and may not be acceptable under the U.S. Read the entire page →
From page 106... ... 106 Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects Others argue that shifting passenger liability to freight railroads would limit their willingness to agree to allow access to new passenger services. They point out that most freight railroad rights of way are private property, which has a high degree of legal protection, and Amtrak's terms of access are clearly specified in the law, protecting their private property rights. Read the entire page →
From page 107... ... Beyond Revenue and Financing Mechanisms: Opportunities and Potential Strategies to Realize Rail Projects with a Funding Gap 107 could be required to contribute, given the disparities in the various operations and their risks. Given that creating such pools has been difficult in the past, this would probably be no easier now. Read the entire page →
From page 108... ... 108 Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects and its Big Sky country, including national parks and travel through the Rocky Mountains. The tour operator might team with BNSF and Amtrak to develop a train service designed like an ocean cruise line service, full of amenities and special events. Read the entire page →

From page 93...

... 93 This chapter provides a discussion of opportunities and potential strategies -- beyond mechanisms for funding and financing rail projects and services -- to realize rail projects and services. The options discussed in this chapter are provided for consideration and debate and should not be construed as recommendations.