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California State Rail Plan 2007-08 to 2017-18

California State Rail Plan 2007-08 to 2017-18

California State Rail Plan 2007-08 to 2017-18

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Chapter XVIII – FundingRAIL INVESTMENT DRIVERS• Tremendous Growth in Demand; Scarce Resources• Greatest Return on Investment for Passengers and Freight• Reducing Growth in Truck Demand and Impacts (e.g., congestions, roadwaydeterioration, safety, emissions, energy consumption)• Support Economy – greater export opportunities; regional and <strong>State</strong>There are different ways of approaching the maintenance and improvement of thefreight rail system. One is by means of “market driven evolution” where theemphasis on system funding is primarily carried out by the railroads themselves.Under this scenario the system would be maintained and moderately improved butwould do little <strong>to</strong> relieve highway congestion.An alternative method of funding freight rail is through public policy drivenexpansion. Public-private partnerships, which are an outgrowth of this method,can provide funds for projects which would not otherwise be undertaken by therailroads themselves, and which can serve public needs such as relief ofcongestion, upgrading environmental quality, and economic expansion.Generally, in the past public-private partnerships associated with freight railfocused on basic local programs such as grade crossing improvements and branchline preservation. With a greater degree of public sec<strong>to</strong>r participation, andexpanded funding sources and amounts, larger scale projects such as corridor andterminal improvements of regional and national significance can be undertaken.If improvements are not made in the freight-rail system, the <strong>State</strong>’s freighttransportation system will weaken and shippers, highway users, and communitieswill pay the social, economic, and environmental costs. The rail industry requirescontinuing investment in order <strong>to</strong> handle the projected growth in freight traffic.Public investment can help <strong>to</strong> stimulate such growth by providing better returnsfor the railroads and interest in rail from capital markets.FUNDING ALTERNATIVESMany states have also developed programs that have benefited and promotedfreight rail. According <strong>to</strong> the AASHTO report 30 states have freight andpassenger rail staff dedicated <strong>to</strong> rail programs, while 20 of them have staffdedicated specifically <strong>to</strong> freight rail. Twenty-two states have used state money <strong>to</strong>fund rail projects, and 10 have freight rail budgets exceeding one million dollarsannually.Often the projects resulting from these programs are carried out as public-privateprojects or public projects that are collaborative efforts between different levels ofgovernment.247

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