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Overview and Application July 10, 2009. Transit Economic Requirements Model (TERM). Agenda. Agenda. Overview Rehab-Replacement Module Application of TERM: Rail Mod Study. Overview. TERM: Purpose.

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Presentation Transcript
slide1
Overview and Application

July 10, 2009

Transit Economic Requirements Model (TERM)

agenda3
Agenda
  • Overview
  • Rehab-Replacement Module
  • Application of TERM: Rail Mod Study
term purpose
TERM: Purpose
  • TERM is used to assess the current physical condition and future investment needs of the nation’s transit assets / operators
  • Analyses include:
    • Current physical conditions
    • Level of investment required to:
        • Maintain condition/performance
        • Improve condition/performance
    • Impact of constrained investment on future conditions / performance
    • Cost effectiveness of proposed investments (benefit–cost analyses)
  • Results reported in the transit sections of the “Status of the Nation’s Highways, Bridges, and Transit: Conditions and Performance”
term components
TERM Components
  • The TERM application consists of:
    • User Interface
    • Model Database
      • Inventory of US transit assets
      • Agency-mode operating characteristics
      • UZA demographics
      • Cost and investment benefits data by mode
    • User Defined Investment Scenarios
      • Asset rehabilitation and replacement polices
      • Budget constraints
      • Financial assumptions (inflation, discount rate)
    • Output Reports
      • Investment needs by type, mode and urban area size
      • Asset conditions forecasts
overview needs investment modules
1

2

3

Rehab-Replace

Asset Expan.

Reduce Crowd

Overview : Needs Investment Modules

4

6

5

Improve Speed

Benefit-Cost II

Benefit-Cost I

  • TERM uses six modules to estimate national transit investment needs:
    • Rehab–Replacement (Maintain or Improve Condition): Total investment required for rehabilitation and replacement of the nation’s existing transit assets
    • Asset Expansion (Maintain Performance): Total investment in new, expansion assets as required to maintain existing transit performance given projected growth in transit travel demand
    • Reduce Crowding (Improve Performance I): Expansion investments to reduce crowding in local agency-modes with a high vehicle occupancies
    • Increase Average Speed (Improve Performance II): Expansion investments in higher speed modes (HRT, LRT, or BRT) to improve performance in urbanized areas (UZAs) with low operating speeds
    • Benefit-Cost I (Maintain/Improve Condition, Maintain Performance): Evaluates cost-effectiveness of rehab-replacement and asset expansion investments
    • Benefit-Cost II (Improve Performance): Evaluates cost-effectiveness of performance improvement investments
capital needs assessment are inclusive of all asset types
Capital Needs Assessment are Inclusive of All Asset Types

Stations / Facilities

Transportation

Networks

  • Administration
  • Maintenance
  • Passenger
  • Guideway
  • Track
  • Dedicated Lanes

Transit Asset Base

Vehicle

Fleets

Systems

  • Rail
  • Buses / Vans /
  • Non-Revenue
  • Electrification
  • Communications
  • Control Systems

Equipment / Furnishings

New Technologies

  • Maint. Equip.
  • Computers
  • Elevators / Escalators
  • - AVL / CAD / APC
  • Real Time Info
rehab replacement overview
Rehab-Replacement: Overview
  • Estimates investment needs for rehabilitation and replacement of:
    • All urban and rural transit agencies
    • All transit asset types
  • This includes:
    • Elimination of any investment backlog (“deferred investment”)
    • Normal replacement of assets reaching the end of their useful life
    • Mid-life rehabilitations
    • Annual capital expenditures
  • Needs estimated for each year of a twenty-year forecast period
rehab replacement asset decay simulation
Rehab-Replacement: Asset Decay Simulation
  • Rehab-Replacement Module simulates the full asset life cycle and decay of all transit assets types — including:
    • Asset use (e.g., vehicle mileage, annual boardings, hours of service, etc.)
    • Annual maintenance,
    • Aging (years of service)
    • Life cycle events (capital maintenance, rehabs/rebuilds and replacement)
  • Analysis relies on:
    • A detailed transit asset inventory
    • Asset investment policy (timing of life-cycle events)
    • Empirically derived decay curves (predict asset condition based on asset type, age, maintenance and utilization)
  • Analysis predicts current assets physical condition and timing /cost of life-cycle events over the next twenty years
rehab replacement asset decay simulation13
Rehab-Replacement: Asset Decay Simulation

Asset Decay Process

Asset Inventory

Model Run:

Needs Forecast

Investment Policy

Listing of Current Asset Inventory

(Track, Structures, Systems, Facilities, Vehicles, Stations)

Simulated Decay, Rehab and Replacement of Transit Assets Over Twenty Year Period

Rehabilitate / replace all assets with a condition of 2.5 or lower

SGR

Needs Forecast

Asset Conditions Forecast

overview current and forecast physical conditions
Overview : Current and Forecast Physical Conditions
  • TERM uses empirically derived decay curves to estimate the current physical condition of all transit assets
  • Curves used to determine those points in the asset life cycle (i.e., condition ratings) at which assets will require rehabilitation and replacement
  • Curves also used to generate forecasts of how transit asset conditions are expected to change under differing scenarios. This capability that allows TERM to run the “maintain” and “improve” conditions scenarios

TERM’s Condition Rating System

aggregate physical condition forecast
1477-0006SF00

Maintain Existing Conditions

4.25

Improve Existing Conditions

Condition

4.00

3.75

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

Year

Aggregate Physical Condition Forecast
rehab replacement asset inventory
Rehab-Replacement: Asset Inventory
  • TERM’s asset inventory documents the capital assets of more than 600 urban and rural transit operators
    • Inventory records documents each asset’s type, acquisition date, replacement cost, quantity, owner agency and mode
    • Inventory uses a hierarchical structure with roughly 400 asset types
the rail modernization study used term to
The Rail Modernization Study used TERM to:
  • Assess the state of good repair needs of nine rail operators (14 rail modes) listed below
  • Investigation excluded:
    • Capacity improvements, major betterments, safety /security
    • Non-rail assets (e.g., bus, paratransit, ferry)

Agencies/Modes Considered

agency selection
Agency Selection
  • These nine agencies operate the majority of the nation’s rail assets and serve the majority of it’s rail riders
current conditions23
Current Conditions
  • The nine agencies also operate and maintain many of the nation’s oldest transit assets
  • More than one-third (34%) of the nine agency’s assets are in either marginal or poor condition
  • In comparison, less than 20% of all US transit assets are in marginal or poor condition
  • This suggests agency reinvestment needs (per dollar invested) are higher than the rest of the industry
needs estimation approach
Needs Estimation Approach
  • Use FTA’s Transit Economic Requirements Model (TERM) to estimate level of investment required to bring the nine agencies to a state of good repair
    • Only includes rehabilitation and replacement investments
    • Analysis relied on agency provided asset inventories
    • Applied consistent definition of “state of good repair” to all agencies
    • FTA team met with staff from study agencies to review analysis results
  • SGR Needs Estimates do Not Include:
  • System improvement, expansion or capacity improvements
  • Investment needs of other US transit operators
  • Do include non-rail capital needs of the nine study agencies
definition of state of good repair sgr
Definition of State of Good Repair (SGR)
  • “SGR” defined using TERM’s numerically based conditions rating system
  • An asset, group of assets or entire agency is in a state of good repair when the physical condition of that asset (or all assets owned by an agency) is at or above a condition rating of 2.50
  • The level of investment required to attain and maintain a state of good repair is therefore that amount required to rehabilitate and replace all assets with an estimated condition of 2.50 or less

TERM’s Condition Rating System

needs estimates
Needs Estimates
  • The current SGR backlog for the nine agencies is roughly $50.0 billion ($2008)
  • Once this backlog has been addressed, an additional annual investment of $5.9 billion would be required to maintain SGR
  • Alternatively, a total annual investment of $8.4 billion would attain SGR over a twenty-year period while simultaneously addressing normal replacement needs (or $2.5 billion to address the backlog alone)
  • The current annual reinvestment rate is roughly $5.4 billion, or about $0.5 billion less than the $5.9 billion in normal replacement needs

Study Agency SGR and Annual Normal Replacement Needs (Billions of $2008)

needs vs current expenditures
Needs vs. Current Expenditures
  • The current annual $5.4 billion reinvestment rate is:
    • Less than the $5.9 required for normal replacement
    • Well below the $8.4 required to address both normal replacement backlog needs
  • Hence, in the absence of additional funding, the physical condition of these nine agencies is expected worsen
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