I-95 Corridor Coalition Mid-Atlantic Rail Operations Study

II-95 Corridor Coalition

Mid-Atlantic Rail Operations Study A Multi-Modal and Multi-State Study

Presentation to

American Association of State Highwayand Transportation Officials

Standing Committee on Rail Transportation

35th National MeetingBurlington, VT

August 27, 2002


Summary of Key Points Five Mid-Atlantic states and three railroads, working under the

umbrella of the I-95 Corridor Coalition, studied the Mid-Atlantic rail and highway network. The Mid-Atlantic Rail Operations Study (MAROps) committee –

Found an urgent need for state transportation agencies to increase rail system capacity to keep pace with freight and passenger growth on already heavily trafficked and congested highways in the Mid-Atlantic region

Recommended an improvement program –

• 3 phases over 20 years to double rail freight and passenger service

• 71 infrastructure and information system projects

• $6.2 billion total

• $620 million quick-start program


Summary of Key Points (continued)

Recommended a regional approach with initial funding from the federal government because –

• Neither the states nor the freight railroads and Amtrak can afford the larger improvements (e.g., tunnels and bridges) necessary to clear critical choke-points, and

• Costs and benefits are unevenly distributed among the states and railroads

Recommended a financing approach that would be “self-policing” because –

• States and the private sector will participate in all aspects of planning, financing, implementing, and allocating risks and returns on capital improvement projects


MAROps Challenge

“I certainly hope increasing rail capacity and operations is a viable

strategy for the Northeast and Mid-Atlantic because, as a region,

we are running out of options for building new runways and

adding new highway lanes, bridges, and tunnels.”

Joe Boardman, Commissioner, NYSDOT – Summer 2000


MAROps Participants

Five states – Delaware, Maryland, New Jersey, Pennsylvania, and Virginia

Three railroads – Amtrak, CSX, and Norfolk Southern

I-95 Corridor Coalition


MAROps Scope

Examined the performance of region’s transportation system

Formulated a vision and consensus program of rail investments

Recommended a public private/partnership to implement the program


Mid-Atlantic Rail NetworkMajor Links and Ownership


Highway Segments with Over 10,000 Daily TrucksInterstate 95 through the Mid-Atlantic region is one of the most heavily traveled truck routes in the Nation


Do Rail and Highway Have the Capacity to Handle Growth? In 2000

• “GDP” of Mid-Atlantic study region alone was $1.3 trillion or 13 percent of U.S. Gross Domestic Product

• Equivalent to the 8th largest economy in the world and the same as California

By 2020

• Population expected to grow by 4 million or 12 percent

• Domestic freight tonnage expected to increase 60 percent

• Highway travel is expected to increase from 300 to 470 trillion vehicle miles of travel, about 53 percent

Where will this growth go?


2020Additional Truck Tons

2020Additional Rail Tons

2000Truck Tons

2000Rail Tons

Truck and Rail Domestic Freight Tonnage in 2000 and 2020 at Current Mode Shares


Solution

Make better use of what we have

• Rail corridors have the most room for growth

- At a lower cost and “life-style” impact

- 1 rail car has the capacity of 2 to 4 trucks

• On average, railroads are three or more times more fuel efficient than trucks

• Environmental advantages – rail is less polluting

• Adding highway lanes will be costly, time consuming and environmentally difficult


Railroads Are Part of the Solution

Most of the national rail-freight infrastructure is robust

Freight railroads are running well

Billions have been spent on new rail-freight capacity

There are some choke points –

• Mid-Atlantic region – CSX and NS have capacity and clearance constraints at the very points where the road network becomes most congested

• Chicago hub

• Los Angeles and I-5 Corridor


Rail Freight Share of Combined Truck-Rail Market by Region, 1993 and 1997

0%

5%

10%

15%

20%

25%

30%

Northeast Midwest South West U.S.

1993 1997

Calculated from U.S. Census Bureau Commodities Flow Survey data

-35.9%

-14.7%-7.0%

-13.4%

-12.0%

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Rail Choke Points – ExamplesPhysical points that reduce capacity compared to rest of system, and information deficiencies that constrain effective utilization of system as a whole

Howard St. Tunnel, Baltimore

Shellpot Bridge, Delaware

12


MAROps Vision

Infrastructure and information technology improvements, covering the passenger and rail systems in the five states and the District of Columbia to double service

• Bridges and tunnels

• Capacity, connections, and clearances

• Stations, terminals, and grade crossings

• Information systems


MAROps Program

$6.2 billion in improvements

• $2.4 billion near-term program (within 5 years)

- buildable projects where current demand exceeds supply

- planning projects with long lead times

- $620 million of quick-start projects ready now

• $1.9 billion medium-term program (5 to 10 years)

- important choke points needing design andenvironmental approvals

• $1.9 billion long-term program (10 to 20 years)

- Growth

The fullest benefit would be realized by implementing the entire $6.2 billion program


MAROps Goals

Provide capacity and redundancy to reliably handle increased traffic

Systematically remove choke points

Handle double-stacked container trains on all main freight routes

Minimize or eliminate conflicts between passenger and freight operations


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MAROps Project – Example


MAROps Program Is Multi-State

New Jersey $311 million

Pennsylvania $946

Delaware $253

Maryland $2,722

Washington, D.C. $785

Virginia $1,057

System wide $100

Total $6,174 million

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MAROps Program Requires Multi-State Solutions

A public/private multi-state partnership is needed to –

• Change rail capital financing if the goal is to help relieve truck and auto pressure on the region’s highways

• Bridge the gap between near-term capital needs and long-term revenues

• Facilitate direct public investments in rail projects with public benefits

• Combine and leverage public and private resources


Reactions

All five state DOT Secretaries have been briefed

Strong endorsement of the process and product, but

• No state money on the horizon

• State “A” money cannot be used to fund State “B” improvements even though State “A” may be helped

States alone are not equipped to tackle the challenge

Challenge to the MAROps team to develop a regional financing proposal


Financing ChallengeExisting Sources for Financing are Stretched to the Limit

CSX and Norfolk Southern invest about $2 billion annually to maintain entire networks covering eastern U.S. and to support near-term business opportunities

Northeast and Mid-Atlantic states have invested $4 billion in rail since 1992, primarily to support passenger infrastructure and operations

Federal grant programs such as STP and CMAQ are heavily committed to roadway system maintenance

Federal aid is allocated by formula to the states, which must be matched by state/local funds, making it difficult to invest beyond state boundaries


Financing Challenge (continued)

Existing Sources for Financing are Stretched to the Limit

Federal loan and credit enhancement programs have not attracted widespread-use

Joint investment/toll charge programs show some promise

• Alameda Corridor

• Delaware and Norfolk Southern – Shellpot Bridge

- Public funding of improvements

- Rail toll charges paid as used

- Risk and reward sharing


Principles for Organizing and Financing Regional Rail Improvements Address the rail network serving a multi-state trade area

Involve the states and the freight, inter-city passenger, and commuter railroads

Provide a forum to identify needs, define improvements, describe benefits, set priorities for investment, organize multi-year programs, and evaluate results

Provide a mechanism for financing the improvements, and

Provide a mechanism for recouping investments and sharing risks and benefits


Models Proposed for Further Examination

National Transportation Finance Corporation

• Non-federal, non-profit finance corporation enabled by Congress to grant or loan money to states or regional entities to make rail capacity improvements

• Authorize formation of regional rail advisory committees through which coalitions of states can develop a plan, set priorities, commit to funding and coordinated sharing of project risks and benefits

• Allow states and railroads working through advisory committee to negotiate project-by-project deals, and

• Toll revenues to be repaid to revolving fund


Models Proposed for Further Examination (continued)

Regional Rail Finance or Investment Bank

• Congress establish regional rail finance corporations or investment banks

• Capitalize with federal funds, tax-credit bonds, etc.

• Other provisions similar to national corporation proposal

National Rail Network Program

• Congress establish federal aid rail program program under U.S. DOT

• Authorize Secretary DOT to underwrite one or more regional transportation coalitions

• Other provisions similar to national corporation proposal


Benefits

Public benefits of improving the rail system

• Increased use of rail passenger

• Increased use of rail freight

• Reduced congestion on highways

• Maintain competitive business and port sectors

• Improve environment and quality of life

Public benefits accrue to the region and the nation


Conclusion

Two futures

• Ease rail choke points and improve the efficiency, capacity, and safety of the rail system

or

• Maintain status quo for rail freight volumes and passenger trains and accept increased congestion burden on other transportation modes


Thank You

Questions?

Documents

I-95 Corridor Coalition Mid-Atlantic Rail Operations Study