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From page 259... ... 6Findings and Recommendations The study charge asks the committee, first, to analyze the rationale for public investment in freight infrastructure and, as a related question, to assess the relevance of the concept of national significance as a possible criterion for determining government responsibility. Second, the committee was to evaluate alternative finance arrangements for freight infrastructure. Read the entire page →
From page 260... ... 250 Funding Options for Freight Transportation Projects near term. Governments provide and operate most freight infrastructure, including the highway system, airports, seaports andharbors, and the inland waterways. Read the entire page →
From page 261... ... Findings and Recommendations 251 management of the federally provided facilities and more cost-effective environmental and economic regulation. The federal government plays a secondary role in most freight infrastructure projects except those on the directly federally provided systems (waterways, air traffic control, and harbor channels) Read the entire page →
From page 262... ... institutional structures and finance arrangements that are available. In almost every public-sector project, state and local governments have taken the lead in organization and funding and the federal role is secondary, providing usually aminority share of support. Read the entire page →
From page 263... ... Findings and Recommendations 253 most cost-effective action, considering public investment as well as other forms of intervention. Regulatory and Pricing Alternatives Government responsibilities for environmental protection and for preventing anticompetitive behavior can be discharged in many circumstances throughpricing of public facilities and through regulatory policies, rather than through compensatory subsidies. Read the entire page →
From page 264... ... 254 Funding Options for Freight Transportation Projects theymay be viewed by the public and by users as an equitable method of infrastructure funding. Interventions for Community Impact Mitigation Themotivation for several prominent recent public freight infrastructure projects has been to reduce adverse community impacts asmuch as to add physical capacity to the freight network. Read the entire page →
From page 265... ... Findings and Recommendations 255 equitable, orpractical considerationspreventgovernment fromimposing the cost burden on shippers or carriers, it may be in the public interest for the government to pay for mitigation. Government payment formitigationwill be consistent with economic efficiency provided that the government seeks cost-effective options formitigation. Read the entire page →
From page 266... ... 256 Funding Options for Freight Transportation Projects The three findings summarized below concern deficiencies in present finance arrangements, the need for reformof finance arrangements to promote efficient development andoperationof the freight transportation system, and the possible effects of alternative reforms on systemperformance. Read the entire page →
From page 267... ... Findings and Recommendations 257 ameliorated by finance reforms. The first group of problems arises from the practices of infrastructure providers (primarily public-sector agencies) Read the entire page →
From page 268... ... 258 Funding Options for Freight Transportation Projects funding programs (e.g., the federal and state highway programs) and outside the authority of any of the individual established organizations (highway departments, port authorities, railroads, etc.) Read the entire page →
From page 269... ... Findings and Recommendations 259 building infrastructure are increasing, maintaining revenue from fuel taxes, the largest present source for government transportation programs, is complicated by higher fuel prices and by government energy and environmental policies. The TRB Fuel Tax committee pointed out that public reluctance to support maintaining user tax revenue is a problemonly if public skepticism about the likely benefits of increased public investment ismisplaced, and it speculated that taxpayers would be willing to pay more if they perceived a better return on investment, in the form of improved performance (TRB 2006, 21) Read the entire page →
From page 270... ... 260 Funding Options for Freight Transportation Projects acceleration of spending through federally subsidized borrowing, federal assistance to private-sector freight facilities, development of new local or project-specific capacities, and adjustments in the federal-aid highway program. The various proposals differ primarily in four characteristics: • The division between public and private responsibility for providing funds and for investment decisions; • Thedivisionof responsibility between the federal and state governments for providing funds and for investment decisions; • The kinds of fees charged to users of facilities and the dependence of project funding on fee revenue; and • The extent of subsidies, whichmay allow shippers to pay less than the cost of freight service for transporting any shipment. Read the entire page →
From page 271... ... Findings and Recommendations 261 and to direct investment in public infrastructure programs that are vital to freight transportation. Progress also will depend on improvements in areas beyond finance, including new technology; better alignment of infrastructure responsibilities among the federal, state, and local governments; and review of regulatory policies to minimize impediments to efficient public- and private-sector investment and operations. Read the entire page →
From page 272... ... 262 Funding Options for Freight Transportation Projects • Instituting new facility-specific user fees that dependon the cost of providing service to the individual users of a facility. Possibilities include expanded highway tolling, fees for harbor dredging, airport landing fees, lockage tolls on the inland waterways, and port access charges. Read the entire page →
From page 273... ... Findings and Recommendations 263 3. Federal credit assistance and tax incentives for freight infrastructure projects. Read the entire page →
From page 274... ... 264 Funding Options for Freight Transportation Projects Federal assistance programs should promote development and use of well-designed facility charges and other local and facility-specific revenue sources. Federal policy should encourage and provide incentives for development of local and facility-specific revenue sources to pay for construction and operation of freight facilities. Read the entire page →
From page 275... ... Findings and Recommendations 265 be accountable for demonstrating that the program was succeeding in producing worthwhile projects. Legislation establishing federal assistance programs should direct the administration of the programs by defining project evaluation criteria rather than by identifying projects to receive aid. Read the entire page →
From page 276... ... 266 Funding Options for Freight Transportation Projects achieve the commonobjective of improved systemperformance. Examples of areas for policy reforms that could improve performance and promote efficient infrastructure development include the following: • Reducing project delivery time. Read the entire page →
From page 277... ... Findings and Recommendations 267 sive and flexible federal program of assistance to freight projects. It therefore should have a sunset provision, and its outcomes should be formally evaluated. Read the entire page →
From page 278... ... 268 Funding Options for Freight Transportation Projects • Assistance awarded competitively:Determinations of projects to receive assistance, and the form and amount of assistance, should consider the expected benefits of competing projects, the likelihood that projects would fail to advance without federal participation, and the ratio of the proposed federal contribution to total cost. Project selection should be based on explicit policy objectives and evaluation criteria. Read the entire page →
From page 279... ... Findings and Recommendations 269 – As an incentive for multistate projects and for coordination of development among the states. Facilitating interstate cooperation is acknowledged as a federal responsibility. Read the entire page →
From page 280... ... 270 Funding Options for Freight Transportation Projects preference to projects whose financial plans call for primary reliance on user charges. • Economic justification: Standardized requirements should be defined fordemonstrating economic justification in applications for aid through the program. Read the entire page →
From page 281... ... Findings and Recommendations 271 integrated administration of USDOT-administered programs should reside in the Office of the Secretary rather than in any of the modal administrations. Read the entire page →
From page 282... ... 272 Funding Options for Freight Transportation Projects manner to promote valuable freight projects in circumstances where federal participation appears critical to achieving a successful outcome. Credit assistance programs should be designed and administered to be consistent with the guidelines of Recommendation 1. Read the entire page →
From page 283... ... Findings and Recommendations 273 • Allow a contingent federal loan commitment before all other elements of the financial plan are in place. The federal loan commitment could aid in recruiting additional sponsors and investors in the project. Read the entire page →
From page 284... ... 274 Funding Options for Freight Transportation Projects be borne by the government (for example, by guaranteeing a construction completion date) Read the entire page →
From page 285... ... Findings and Recommendations 275 revenue favors projects with the greatest benefits to their users) Read the entire page →
From page 286... ... 276 Funding Options for Freight Transportation Projects removed, although federal responsibilities (for example, to ensure that interstate commerce is not interfered with) may necessitate some form of oversight. Read the entire page →
From page 287... ... Findings and Recommendations 277 and training. USDOT should serve as an information clearinghouse and technical assistance resource, as proposed in Recommendation 5 below. Read the entire page →
From page 288... ... 278 Funding Options for Freight Transportation Projects will relate to highway transportation along with other modes, and the other modal trust funds also could contribute. Freight SystemMonitoring The federal government should expand its existing freight system monitoring program by developing a continuing, comprehensive, and systematic program to monitor the performance of the national freight transportation system and to identify sources of inefficiency. Read the entire page →
From page 289... ... Findings and Recommendations 279 Resources should be devoted primarily to developing planning and analysis tools that directly support specific federal decisions. For example, the federal government should have the capability to evaluate the system performance impacts of federal regulations and the effects of alternative structures of federal infrastructure assistance programs on investment levels and priorities. Read the entire page →
From page 290... ... 280 Funding Options for Freight Transportation Projects • Definition of evaluation frameworks, including principles and practical methods for project evaluation. Any federal program that entails economic evaluation of project proposals should have a standard evaluation protocol that specifies costs and benefits to be estimated quantitatively, estimation methods, and data required. Read the entire page →

From page 259...

... 6Findings and Recommendations The study charge asks the committee, first, to analyze the rationale for public investment in freight infrastructure and, as a related question, to assess the relevance of the concept of national significance as a possible criterion for determining government responsibility. Second, the committee was to evaluate alternative finance arrangements for freight infrastructure.