Freight Public Private Partnerships Today. by Bill Habig, P.E., AICP Transportation Matters

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1 Freight Public Private Partnerships Today by Bill Habig, P.E., AICP Transportation Matters

2 Overview of Transportation Matters Founded October 2008 Seeks full funding of Ohio transportation Advocates statewide for all modes Provides partnerships to promote transportation Conducts education & outreach

3 Top Three Reasons to Join Participate Join Ohio s first ever multi-interest transportation coalition. Get Connected Network with industry leaders. The Time is Now Influence the federal reauthorization window.

4 Board of Directors Bicyclist Consultants Contractors Association City Disabled Community Metropolitan Planning Organizations Rail Development Commission Supplier Transit Authorities

5 Federal Reauthorization Prospects 8-12 month compromise extension $10-15B additional trust fund subsidy needed for federal fiscal year 2010 Impact of climate change legislation Impact of deficit on potential new taxes Survey on vehicle mile tax potential

6 Federal Funding Gap: Source: Based on Future Highway & Public Transportation Study for U.S. Chamber by Cambridge Systematics 2005

7 Growth of Freight Millions of tons Rail +74% Intermodal - +73% Truck - +77% Total - +75% Source: U. S. Department of Transportation

8 Rail Freight Flows 2035 vs. Current Capacities without Improvements Source: Cambridge Systematics Study for Association of American Railroads 2007

9 What Are Public Private Partnerships? Contractual arrangements Single private consortium typically responsible and financially liable Procuring agency shifts certain risks to the private partner Private partner receives the opportunity to earn a financial return commensurate with the risks it assumes

10 Types of Public Private Partnerships (PPP s) Design Build Design Build Finance Operate Design Build Operate (Maintain)

11 Benefits of PPP s Significant cost savings Project delivery shortened by several years Allocation of risk to the party best able to manage it Encourage innovation and the incorporation of life-cycle costs

12 PPP s respond to Policy Failures Poor system performance Growing resource scarcity Poor investment decision making Contradictory policy goals Lengthy development cycles

13 PPP Case Studies Alameda Corridor Heartland Corridor Chicago CREATE National Gateway West Virginia King Coal Highway

14 Alameda Corridor Source: Alameda Corridor Transportation Authority

15 Overview Partnership of two ports, cities, MTA, two railroads Cost - $2 billion Links ports of L.A. & Long Beach to rail mainlines near downtown L.A. Completed in 2002

16 Norfolk Southern Heartland Corridor A multi-state public/private partnership Enables double-stacked international containers to be transported by rail between the Norfolk, VA port and the Midwest Increases tunnel clearances and modifies other overhead obstructions from western Virginia to Columbus, Ohio Designated as a Project of National and Regional Significance under SAFETEA LU

17 Heartland Corridor Route Source: Virginia Commonwealth Transportation Board

18 30 Tunnels Being Cleared

19 Heartland Corridor Cost COMPONENT EST. COST Central Corridor Double-Stack Initiative $ 151M Prichard Intermodal Terminal $ 18 M Roanoke Region Intermodal Terminal $ 18 M Rickenbacker Intermodal Terminal $ 62 M Commonwealth Railway Mainline Safety Relocation Project (CRMSRP) $60 M TOTAL $ 309 M

20 Chicago Region Environmental & Transportation Efficiency Program (CREATE) Partnership between the State of Illinois, City of Chicago, Metra, Amtrak, railroads, and USDOT A project of regional and national significance Includes 78 critically needed rail and highway infrastructure improvements Estimated cost $2.6 billion Funds committed: state $320M, federal $100M, railroads $100M, City of Chicago $30M

21 Chicago Midwest Rail Hub: Growth (Millions of Tons)

22 CSX National Gateway Project Double stack-cleared, state-of-the-art rail corridor linking the east coast and the Midwest Estimated cost - $700M. Intermodal terminals - $300M Double stack clearances - $400M CSX has committed $300M. $80M North Baltimore terminal here in Wood County

23 CSX National Gateway Corridor Source: CSX Railroad

24 West Virginia King Coal Highway 90 mile new four lane highway to cost $2.3B Partnership of FHWA, West Virginia DOT, coal companies, King Coal Highway Authority Phase one (8 miles) Cost $110M Coal companies providing right-of-way and constructing road foundation Private efforts saving 50% of overall cost

25 King Coal Highway Corridor Source: West Virginia DOT

26 Projected Benefits Sustain 2,000 jobs Provide $220M annual economic impact Save highway businesses $24M/year

27 Federal Freight Funding Programs Formula Special funding (CMAQ, Rail Relocation) Discretionary (Projects of National or Regional Significance) Highway Funding Core National Highway System (NHS) Surface Transportation Program (STP)

28 Federal Financing Tools Loans (e.g., State Infrastructure Bank) Credit Enhancement (e.g., TIFIA guarantees) Grant Anticipation Revenue Vehicles (GARVEE Bonds) Tax Exempt Private Activity Bonds Rail Rehab & Improvement Loans Special Experimental Project (15 Trial PPP s)

29 Conclusion Why PPP s Provide resources in a time of scarcity. Expedite projects. Fund life cycle costs.