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Framework for Assessing the ROI for High-Speed and Intercity Rail Projects

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Framework for Assessing the ROI for High-Speed and Intercity Rail Projects Framework for Assessing the ROI for High-Speed and Intercity Rail Projects Prepared for: American Public Transportation Association (APTA) Prepared by: The Urban Transportation Center (UTC), University of Illinois at Chicago with Economic Development Research Group (EDRG), Boston, MA Primary authors: P.S. Sriraj, PhD, Director, Urban Transportation Center at UIC Bo Zou, PhD, Assistant Professor, College of Engineering at UIC Steve Schlickman, JD, Senior Research Specialist Glen Weisbrod, EDR Group Contributing authors: Ahmadreza Talebian, PhD, Post-Doctoral Research Fellow, UIC Kyle Schroeckenthaler, EDR Group Adam Blair, EDR Group June 2017 The Urban Transportation Center University of Illinois at Chicago 412 S. Peoria St., 340 CUPPAH, Chicago, IL 60607-7036 www.utc.uic.edu REPORT SPONSORS APTA BUSINESS MEMBERS Capitol Corridor HNTB WSP Mott McDonald Atkins HDR Quandel Consultants Al Engel Consulting TECHNICAL REVIEW TEAM Charles Quandel, Quandel Consultants Ira Hirschman, WSP Sharon Greene, HDR Dominic Spaethling, HNTB Darnell Grisby, APTA APTA HIGH-SPEED AND INTERCITY PASSENGER RAIL COMMITTEE LEADERSHIP Anna Barry, Connecticut DOT Chair Al Engel, Al Engel Consulting Vice Chair Jennifer Bergener, Managing Director, LOSSAN Rail Corridor Agency Secretary Peter Gertler, HNTB Immediate Past Chair David Cameron, Teamsters Officer at Large Art Guzzetti, APTA Staff Advisor Contents Introduction ................................................................................................................................................................ 1 Cost Elements ............................................................................................................................................................. 3 Preliminary costs ............................................................................................................................................. 3 Capital Investment Costs .............................................................................................................................. 3 Operating and Maintenance Costs ............................................................................................................ 4 Assets Replacement and Remaining Assets Life Cost....................................................................... 4 Benefit and Impact Elements ............................................................................................................................... 5 Impact Elements .............................................................................................................................................. 5 Travel Time ........................................................................................................................................................ 6 Travel Cost ......................................................................................................................................................... 7 Congestion and Reliability ........................................................................................................................... 8 Safety .................................................................................................................................................................... 9 Noise ................................................................................................................................................................... 10 Emissions .......................................................................................................................................................... 12 Energy Resource Use ................................................................................................................................... 14 Accessibility (Labor, Leisure and Business Visitor Markets) ...................................................... 15 Intermodal Connectivity ............................................................................................................................. 18 Land Development ........................................................................................................................................ 19 Service Operator and Facility Owner Revenues and Expenses (all modes) ......................... 20 Benefits Estimation Approaches....................................................................................................................... 21 Benefit-Cost Analysis ................................................................................................................................... 22 BCA Accounting Systems: Analysis Steps ............................................................................................ 22 4.2.1 Monetizing Multimodal Travel Benefits .......................................................................................... 23 4.2.2 Monetizing Externality Effects ............................................................................................................ 24 4.2.3 Monetizing Wider Economic (Productivity) Effects .................................................................. 24 4.2.4 Presentation of Output Results ........................................................................................................... 25 Economic Impact Analysis ......................................................................................................................... 25 4.3.1 Economic Impact Models: Analysis Steps ....................................................................................... 26 4.3.2 Short-term Construction and Operations Spending Impacts ................................................. 28 4.3.3 Long-term Cost Savings and Productivity Impacts .................................................................... 28 4.3.4 Regional vs. Multi-Regional Impacts ................................................................................................ 30 4.3.5 Presentation of Output Results ........................................................................................................... 30 Social Impact Analysis ................................................................................................................................. 31 4.4.1 Social Impact Analysis Steps ................................................................................................................ 31 4.4.2 Localized Mobility and Accessibility Effects .................................................................................. 32 4.4.3 Localized Livability Effects (health, environment, neighborhood activity) ..................... 34 4.4.4 Localized Prosperity Effects ................................................................................................................. 35 4.4.5 Long Term Sustainability and Resilience Effects ........................................................................ 35 4.4.6 Presentation of Output Results ........................................................................................................... 36 Recommended Framework for Social Return on Investment .............................................................. 36 Guidance on Using the Framework ........................................................................................................ 36 5.1.1 Clarifying Objectives and Perspectives............................................................................................ 36 5.1.2 Selecting among available analysis methods ................................................................................ 37 5.1.3 Setting the Stage: Correctly Defining Scenarios and Mode Split Categories .................... 39 Framework for Overall ROI Calculation and Presentation .......................................................... 42 Social ROI (targeted for specific audiences) ...................................................................................... 44 Appendix A: Literature Review ................................................................................................................................... 48 Appendix B: Compiling existing estimates of HS&IPR economic and public benefits ......................... 79 Appendix C: Illustrative Cases ..................................................................................................................................... 97 Introduction Background. Intercity passenger rail demand in the U.S. has shown an unprecedented surge in the new millennium. Amtrak, the primary intercity rail service provider in the country, reports more than 30 million ridership in 2015, almost 1.5 times of what it was in 2000 (Amtrak, 2017). To accommodate the ever increasing rail passenger demand and to meet the rising expectations of riders for quality rail travel experience, several states have been actively pursuing new high-speed and intercity passenger rail (HS&IPR) services. Prominent examples include the California High-Speed Rail project, the Midwest Regional Rail Initiative (MWRRI), the Florida High-Speed Rail project, and the project to improve intercity passenger rail between North Carolina and Virginia, among others. HS&IPR service is an appealing alternative to air and auto in intercity travel. Many parts of the national highway and airport systems in the U.S. have been plagued with congestion and deteriorating infrastructure for a long time. In addition, the two modes are under increasing criticism for their considerable negative externalities to
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