Ultra-High-Speed Ground Transportation study - September 2017 advisory group meeting

September 13, 2017 meeting overview

About 25 people attended the meeting. The agenda included:

  • An update on ridership and costs analysis modeling
  • Funding and financing options for ultra-high-speed ground transportation
  • Advisory group member perspectives on economic development and cross-border opportunities

Ron Pate, WSDOT Rail. Freight and Ports Division Director and Charles Knutson of the Washington State Governor’s Office shared opening remarks:

  • The Advisory Group plays an important role by providing input for this early feasibility study
  • Funding for the study indicates policymaker support for the project
  • The addition of private partners gives the project greater credibility
  • Both Governor Inslee and Prime Minister Trudeau believe this project will increase short-term and long-term economic benefits, including workforce mobility and innovation

Review and discussion of key elements

  • Updated conceptual corridors
    • The study considers a range of corridor options with various numbers of stops
    • Stop considerations range from downtown cores to stops farther away from urban centers but with good transit connections
    • Some corridor options include airport connections
    • Stops that are farther from urban centers could result in cost savings
  • Technology options and planning-level cost estimates
    • Assesses proven technologies capable of operating speeds of 250 mph or greater
    • Assumes the route would be separate right-of-way dedicated to passenger  service – separated from other freight train corridors
    • High speed “steel wheel” service could connect to existing rail stations more easily
    • Magnetic levitation (maglev) trains can achieve higher speeds more quickly, but cannot readily connect to existing railway systems and stations
    • Hyperloop technology is in its infancy. It will be considered, but it does not have commercial data to compare to commercial data of proven technologies
  • Feasibility will be evaluated through three lenses
    • A review of applicable policies and plans
    • Ridership and revenue analysis
    • Economic feasibility
  • Potential funding and financing modeling and mechanisms will be included
  • An institutional/cross-border framework will be developed
  • Reviewing broad economic benefits to the larger British Columbia-Washington-Oregon “Cascadia Megaregion”

Consultants will use Federal Railroad Administration’s CONNECT model for analysis

  • Allows configuration of service corridor options
  • Provides benefit-cost analysis
  • Considers effects of larger rail connections
  • Estimates ridership, revenue and cost performance
  • Forecasts model through 2035 but can forecast as far as 2050
  • Shows ability to “right-size” the service to optimize service frequency and number of stations

Responding to Advisory Group input

In response to feedback from the first Advisory Group meeting, the following elements were taken into consideration by the project team regarding the conceptual corridors:

  • A route east of the Cascades could be less expensive and easier to build than one on the west side.
    • CONNECT could consider a route east of the Cascades as a “secondary” corridor that would be analyzed in less detail
    • Full consideration of a route east of the Cascades would need to be done in future studies
  • A route that would connect the region’s largest airports
    • Airport locations have more space and are well-connected by local transit.
    • One disadvantage of a route that connects airports is that it would set up a directly competing service, since flight services already connect airports
  • Routes in Vancouver, British Columbia should connect with local rapid transit service
  • Routes are being considered to connect urban centers to serve areas with the largest demand
  • Consider and compare “extreme” options – connecting urban centers vs. a lower cost option with outlying stops
    • Compare benefits of convenience with political and financial challenges of right-of-way acquisition in urban centers
    • People will be able to understand and scale the tradeoffs between the two “extreme” models
  • Consider a stop in Surrey, British Columbia
    • Surrey is a growing business hub and connected to Vancouver region’s rapid transit
    • Land in Surrey is less expensive than land closer to Vancouver
    • Vancouver has had difficulty identifying routes for local transit

The CONNECT model

Key Performance Indicators for ridership and cost and revenues drawn from CONNECT analysis have a base year of 2015 and a planning year of 2035. Those indicators include:

  • Passengers per seat mile (number of seats filled) between stations
  • Passenger miles per seat mile (utilization over the entire route length)
  • Rail mode share
  • Shift to rail from other modes
  • Recovery ratios based on what could be collected from fare, balanced against upfront and ongoing capital expenditures, as well as operation and maintenance expenditures over time.

Financing and funding options overview

  • Other sources of funds may be used to pay for the revenue/operating costs and capital expenditures of a project (farebox revenue, subsidies, government grants, taxes, TIF, levies)
  • Infrastructure bank or other government-backed debt: Public funds as leverage to attract private investment for major infrastructure projects
  • Government subsidies or grants: Private entity could provide financing and public sector pays back over time through availability payments
  • Bonds: Capital market financing
  • Governance models: institutional and regulatory options for planning and operating the project.
  • Equity Investors: Investment from institutional investors

Lessons learned from other high-speed rail projects

Some lessons learned from the various international examples include:

  • The investment community wants technology that is commercially viable, without excessive technology risks
  • Project appraisers tend to be overly optimistic so it is important to monitor for sources of bias
  • Risk analysis and allocation is important, and proper infrastructure management is important to offer technical solutions for the entire route
  • Given high capital expenditures, a sufficient revenue stream associated with strong ridership is needed to achieve significant financial returns
  • Governments must often take on risks (usually including some construction costs and demand risk) and provide funding and guarantees to attract private investments

Next steps for Advisory Group

A few issues for future consideration for the Advisory Group to consider:

  • Assessing the pros and cons of different delivery models
  • Evaluating the Canadian and US public-private partnership market
  • Examining the advantages and disadvantages of different financing options
  • Further analysis of international cross-border case studies