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Financing Freight Infrastructure

Financing Freight Infrastructure. Transportation leadership you can trust. A Guidebook to Federal Funding and Financing Tools for Freight Projects. presented to Talking Freight Seminar presented by Iris N. Ortiz Cambridge Systematics, Inc. September 20, 2006. Agenda. About the Guidebook

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Financing Freight Infrastructure

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  1. Financing Freight Infrastructure Transportation leadership you can trust. A Guidebook to Federal Fundingand Financing Tools for Freight Projects presented toTalking Freight Seminar presented byIris N. OrtizCambridge Systematics, Inc. September 20, 2006

  2. Agenda • About the Guidebook • Case Studies

  3. Freight Financing Issues • Public investment on private infrastructure • Public-private partnerships • Regional/multijurisdictional scope of issues • Some require unique blending of funding sourcesand financing techniques

  4. Objective and Structure • Objective – Develop a guide that will provide information and descriptions of available Federal funding sources and financing tools to support freight investments • Guidebook structure • Funding and financing tools • Case studies • Phases II and III – Freight financing course development and delivery

  5. Federal Funding and Financing Tools • Funding (partial list) • Traditional – NHS, STP • Mode Specific/Special Grants – CMAQ, Bridge, Rail-Highway Crossing, Harbor Maintenance, Airport Improvement Program • Discretionary and HPP • Financing Tools – TIFIA, SIBs, RRIF, GARVEE, PAB

  6. Non-Federal Funding Methods and Financing Tools • Funding sources • User fees/tolls • Dedicated taxes • Special taxing and assessment districts • Equity and in-kind contributions • Financing tools • Public debt • Tax-exempt/private activity bonds • Institutional arrangements • Joint development • Public-private partnerships • Tax-exempt corporations/63-20 corporations

  7. Case Studies • Guidebook includes about 50 case studies • Types of projects • Highway • Rail • Airport expansion • Port • Intermodal/storage facilities

  8. Case Studies • Dixie Siding (Indianapolis, IN) – $1.5 million • Southern Tier Extension Railroad Restoration (Hornell, NY to Corry, PA) – $38 million • ReTRAC (Reno, NV) – $280 million • Sheffield Flyover/Argentine Connection (Kansas City, MO-KS) – $60 million to $74 million

  9. Dixie Siding • One-mile long rail siding constructed south of the West Avenue highway-rail crossing to store empty coal trains • Completed in 2003 Source: Indianapolis MPO.

  10. Dixie SidingFunding • Funding partners – Indiana Railroad Company, Indiana DOT, Indianapolis MPO, FHWA • Funding/financing mechanisms • Indiana Railroad Company – $815,000 • INDOT Industrial Rail Service Fund grant – $200,000 • CMAQ – $480,000

  11. Reno Transportation Rail Access Corridor (ReTRAC) • Project description – 33-foot deep trench to separate auto traffic from rail in downtown Reno; 11 bridges to provide crossings over the trench • Project cost – $280 million • Project sponsors/partners • City of Reno • Union Pacific • FHWA Source: City of Reno

  12. ReTRACFunding UP, 6% $17 Million TEA-21, 8% $21.3 Million City of Reno, 28% $79.6 Million TIFIA, 18% $50.5 Million City of Reno G.O. Bonds, 40% $111.5 Million

  13. ReTRACSources to Repay Debt Lease Income, 32% $34 Million Assessment District, 17% $18 Million 1/8% Sales Tax and 1% Hotel Tax, 46% $50.5 Million Air Rights, 5% $5 Million

  14. Sheffield Flyover and Argentine Connection • Location – Kansas City, Kansas-Missouri • Project type – Rail crossing separation • Project cost • Sheffield Flyover – $74 million • Argentine Connection – $59.8 million

  15. Sheffield Flyover • Completed in 2000 • Sheffield Junction was the third busiest rail crossing in the country • Travel time savings of 25 minutes (trains) • Financing strategy • Creation of nonprofit transportation corporation • Issue bonds; tax-exempt status from property tax • Railroads (BNSF, UP, and Kansas City Southern) pay back debt

  16. Argentine Connection • Completed in 2004 • Santa Fe Junction located at state border • Increased rail capacity • Financing strategy • Missouri created another transportation corporation to issue bonds ($46.3 million) • Unified Government of Kansas City/Wyandotte County issued bonds to fund the Kansas portion of the project ($13.5 million) • Kansas City Railway Terminal responsible for debt service payments

  17. Lessons Learned • Funding follow benefits • Agreements are reached only after major obstacles are addressed • Cash contributions not the only “revenue source”

  18. Next Steps • Guidebook – Fall 2006 • Develop a freight financing course – Winter 2006/07 • Course delivery – TBD

  19. Contact Information Iris N. Ortiz 100 CambridgePark Drive Suite 400Cambridge, MA 02141 Phone: 617-354-0167 E-mail: iortiz@camsys.com

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