Freight Public Private Partnerships Today by Bill Habig, P.E., AICP Transportation Matters
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
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.
Board of Directors Bicyclist Consultants Contractors Association City Disabled Community Metropolitan Planning Organizations Rail Development Commission Supplier Transit Authorities
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
Federal Funding Gap: 2008-2020 Source: Based on Future Highway & Public Transportation Study for U.S. Chamber by Cambridge Systematics 2005
Growth of Freight 2007 2035 Millions of tons 40000 35000 30000 25000 20000 15000 10000 Rail +74% Intermodal - +73% Truck - +77% Total - +75% 5000 0 2007 2035 Source: U. S. Department of Transportation
Rail Freight Flows 2035 vs. Current Capacities without Improvements Source: Cambridge Systematics Study for Association of American Railroads 2007
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
Types of Public Private Partnerships (PPP s) Design Build Design Build Finance Operate Design Build Operate (Maintain)
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
PPP s respond to Policy Failures Poor system performance Growing resource scarcity Poor investment decision making Contradictory policy goals Lengthy development cycles
PPP Case Studies Alameda Corridor Heartland Corridor Chicago CREATE National Gateway West Virginia King Coal Highway
Alameda Corridor Source: Alameda Corridor Transportation Authority
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
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
Heartland Corridor Route Source: Virginia Commonwealth Transportation Board
30 Tunnels Being Cleared
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
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
Chicago Midwest Rail Hub: 2005-2035 Growth (Millions of Tons)
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
CSX National Gateway Corridor Source: CSX Railroad
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
King Coal Highway Corridor Source: West Virginia DOT
Projected Benefits Sustain 2,000 jobs Provide $220M annual economic impact Save highway businesses $24M/year
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)
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)
Conclusion Why PPP s Provide resources in a time of scarcity. Expedite projects. Fund life cycle costs.