Cost Benefit Analysis of Washington-Richmond High-Speed Rail

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Cost Benefit Analysis of Washington-Richmond High-Speed Rail Spring 2010 38 • The Rail Enhancement Fund - $25 million in annual funding; • Capital Project Bonds (CPB) - $113 million in capital project bond proceeds; and • 2007 Acts of the Assembly General Fund Appropriations - $65 million for specific I-95 corridor projects. 42 In Florida, during the initial attempt in the 1990s to build HSR between Tampa and Miami, $70 million were appropriated annually for a similar rail investment fund, which was set up to support an infrastructure bond equal to $2.146 billion dollars. 43 It is assumed that, in a similar fashion, Virginia could use the dedicated annual $12.9 million in CPB funds, and $25 million annual REF to float a construction bond equal to $1.2 billion dollars, which is enough to cover the 70% match 44 . In California, debt service costs followed the market interest rates for major infrastructure projects of 7.5% annually to service a bond that covers a total build scenario for HSR infrastructure improvements for the entire Los Angeles-San Francisco corridor. 45 Both of these figures were used to estimate total construction cost debt incurred and debt service costs on a yearly basis for the length of the D.C.-Richmond project assuming limited federal support. These costs were separated out from the mandatory 30% contribution of public and private partners (VRE, Amtrak, CSX, the federal government, and local jurisdictions), which is required by the Commonwealth of Virginia to qualify for use of its REF and CPB funds. No further analysis was conducted to estimate the likely breakdown of contributions on the part of individual agencies within this consortium; however, it was included in a lump sum in a separate column in the infrastructure costs table. 42 Virginia Department of Rail and Public Transportation, “Virginia Department of Rail and Public Transit, Statewide Rail Plan Technical Update,” 8-4 - 8-8 43 Anthony Pearl, New Departures: Rethinking Rail Passenger Policy in the Twenty-First Century (Lexington, KY: The University Press of Kentucky, 2002), 71 44 Virginia Department of Rail and Public Transportation, “Virginia Department of Rail and Public Transit, Statewide Rail Plan Technical Update,” 8-1 - 8-4 45 Levinson et al., “The Full Cost of High-Speed Rail : An Engineering Approach.,” 194.
Cost Benefit Analysis of Washington-Richmond High-Speed Rail Spring 2010 6. Travel Demand Model 6.1 Forecasting Background Cost-benefit analyses of transportation projects almost always depend on forecasts of projected levels of usage. When using forecasts to generate benefit estimates, it is important to assess their reliability. In order to assure the reliability of the forecasts used in this analysis, a careful review of outside forecasts was completed. When using previously prepared forecasts, it is important to match forecasts of affected population to the appropriate time period. For example, using projected traffic levels for 2030 to generate benefits for all the earlier years is incorrect. For more information on forecasting, refer to the forecasting section of FHWA’s Economic Analysis Primer 46 . 6.2 Ridership Forecasts Passenger ridership is one of the most critical components used in calculating the costs and benefits of a major public transportation project. Before additional analysis could be conducted, it was necessary to calculate estimated passenger rail ridership between Washington, D.C. and Richmond, VA for each year of the analysis period, 2015-2035. The gravity model was used in this study to estimate ridership because it is one of the most widely used and most commonly accepted forms of a travel demand model. The gravity model is based on Isaac Newton’s Law of Gravitation where the size and population of a location may be appealing (gravitate) to other locations due to size, proximity, and other factors 47 . Several iterations of the model were run using different variables. Ultimately, a model based on population, trip fare, and travel time by train provided the most accurate results when fully calibrated. The passenger ridership results of the travel demand model for the analysis period can be seen in Figure 6-1 below. For complete results, including I-95 corridor average vehicle miles traveled (AVMT) estimates for the build and no-build scenarios, see Appendix B. 46 Federal Highway Administration, “Forecasting Traffic for Benefit Calculations - Economic Analysis Primer - Economic Analysis - EEI - Asset Management,” August 29, 2007, http://www.fhwa.dot.gov/infrastructure/asstmgmt/primer06.cfm 47 “Law of Gravity ,” About.com, http://physics.about.com/od/classicalmechanics/a/gravity.htm 39
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Cost Benefit Analysis of Washington-Richmond High-Speed Rail

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