November 2011

Agenda

• Final Analyses Results

• Capital Costs

• Operating Plan

• Operating and Maintenance Costs

• Ridership and Revenue

• Operating Ratio Analysis

• Sensitivity Analysis

• Benefit-Cost Analysis

• Sensitivity Analysis

• Next Steps

Study looks at the feasibility of three corridors in the

southeast: • Atlanta - Birmingham

• Atlanta - Macon - Savannah - Jacksonville

• Atlanta - Chattanooga - Nashville - Louisville

What is a feasibility study? • First step in the transportation planning process

• Feasibility gives a better idea of project prioritization

and funding opportunities

What is it not? • Does not provide detailed cost and revenue forecasts;

all estimates are based on high-level data

• Does not make a recommendation for a preferred

alignment

Study Overview

4

Alignments/Stations

Capital Costs

Technology

Operating Plan

O&M Costs

Ridership and

Revenue

Federal Funding

Next Steps

Q&A

First step of a long planning/implementation process:

Corridor Overview

We are here

Tier I EIS

Tier II EIS

Preliminary

Design

Final Design

Right-of-way

Acquisition

Construction

Operation

Feasibility

Study

Year 1

Year 2

-3

Year 4

-5

Yea

r 6-8

Y

ear

9

Year 1

0-1

5

Year 16+

Corridor Overview

Technology Alternatives

Shared Use Dedicated Use

Speed (Average) 90-110 mph 180-220 mph

Fuel/Energy Diesel Electrified

Alignment Existing Freight Corridors New Alignment

Track Single Track with Sidings Double Track

Train Delay Probability High Low

Atlanta – Macon - Jacksonville

Two representative alignments and technologies:

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Capital Costs

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Methodologies

• Costs estimated for both Shared Use and Dedicated Use

• Follow Federal Railroad Administration (FRA) Standard

Costing Categories (SCC):

• Key assumptions: All infrastructure improvements for shared-use corridors can be done inside

the existing freight right-of-way (100-ft)

Proposed right-of-way for dedicated-use corridors is 100-ft (rural) or 60’

(urban)

SCC

10 Track Structures & Track

20 Stations, Terminals, Intermodal

30 Support Facilities

40 Sitework, Right-of-Way

50 Signals & Communication

60 Electric Traction

70 Equipment

80 Professional Services

Capital Costs

Cost Summary

Shared Use Dedicated Use

Total Cost $5.0 Billion $16.1 Billion

Cost ($/Mile) $11.5 Million $41.3 Million

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Operating Plan and Costs

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Methodologies

• Operating Plan primarily based on track geometry (curves)

and existing/future freight volumes

• O&M Costs based on Variable and Fixed cost categories:

Variable Costs

Train Crew

On-Board Services

Equipment Maintenance

Fuel or Energy

Insurance

Call Center

Credit Card + Travel Agency Commissions

Fixed Costs

Stations

Track and Electrification Maintenance

Administration and Management

Operating Plan

Shared Use

Segment Rail

Distance

Travel

Time

Cumulative

Travel Time

Average

Speed (mph)

Frequencies

(Round Trips)

Atlanta (MMPT) 0.0 0:00 0:00 0 8

Atlanta (Airport) 9.0 0:08 0:08 65 8

Griffin 34.9 0:31 0:39 67 8

Macon 58.2 0:50 1:29 69 8

Savannah 169.0 2:16 3:45 74 8

Brunswick 57.3 0:39 4:24 87 8

Jacksonville 80.4 0:54 5:18 89 8

Total 408.6 5:18 5:18 77 8

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Operating Plan

Dedicated Use

Segment Rail

Distance

Travel

Time

Cumulative

Travel Time

Average

Speed (mph)

Frequencies

(Round Trips)

Atlanta (MMPT) 0.0 0:00 0:00 0 28

Atlanta (Airport) 7.4 0:06 0:06 76 28

Griffin

Macon 77.7 0:42 0:48 112 28

Savannah 147.6 1:01 1:49 146 28

Brunswick 55.6 0:25 2:14 131 28

Jacksonville 79.9 0:35 2:49 138 28

Total 368.1 2:49 2:49 131 28

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Operating and Maintenance Costs

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Annual Shared Use O&M Costs (2010$ millions)

2021 2030 2040

Variable Costs $60.1 $62.8 $65.6

Fixed Cost $35.6 $35.6 $35.6

Total Cost $95.7 $98.5 $101.2

Annual Dedicated Use O&M Costs (2010$ millions)

2021 2030 2040

Variable Costs $109.1 $113.9 $118.7

Fixed Cost $80.9 $80.9 $80.9

Total Cost $190.1 $194.8 $199.6

Ridership and Revenue Summary

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Methodologies

• Ridership based on:

• Fare Structure

• Operation Plan (Train Frequencies and Travel Times)

• Existing and Future Demographics

• County to County Travel Patterns

• Mode-sharing

• Includes increased congestion and fuel costs

• Three fare structures modeled for each representative alignment:

HSR Fares Shared Use Dedicated Use

Boarding Fee $5.00 $5.00

Fare per Mile – Scenario 1 $0.20 $0.40

Fare per Mile – Scenario 2 $0.28 $0.55

Fare per Mile – Scenario 3 $0.40 $0.70

Total Corridor Fare (range) $86.80-$168.60 $152.20-$262.60

Ridership and Revenue Summary

Year Annual Volume and Revenue

Scenario 1 -

$0.20/mile

Scenario 2 -

$0.28/mile

Scenario 3 -

$0.40/mile

2021 2,347,000 2,011,000 1,515,000

$99.8 M $107.1 M $100.6 M

2030 2,806,000 2,353,000 1,799,000

$124.7 M $133.9 M $126.3 M

2040 3,265,000 2,732,000 2,083,000

$149.6 M $160.8 M $152.1 M

Shared Use (Two-Way) Passenger Volumes (Intercity + Local)

Dedicated Use (Two-Way) Passenger Volumes (Intercity + Local)

Year Annual Volume and Revenue

Scenario 1 -

$0.40/mile

Scenario 2 -

$0.55/mile

Scenario 3 -

$0.70/mile

2021 2,355,000 1,784,000 1,440,000

$177.1 M $171.4 M $159.0 M

2030 2,745,000 2,113,000 1,689,000

$218.5 M $211.7 M $194.0 M

2040 3,178,000 2,442,000 1,938,000

$260.0 M $251.9 M $229.1 M

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Ridership and Revenue Summary

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Operating Ratio Analysis

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Methodology

• Measure the difference between potential revenues and

potential operating/maintenance costs

• Revenues include:

• Ticket Fares

• On-Board Services

• Costs include:

• O&M Fixed Costs

• O&M Variable Costs

Calculate Operating Surplus (or Deficit)

Operating Surplus (Deficit) = Total Revenue - Total O&M Cost

Calculate Operating Ratio

Operating Ratio = Total Revenue / Total O&M Cost (A positive [>1.0] reduces operating risks)

Operating Ratio Analysis

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Shared Use Proforma (2010$ millions)

2021 2030 2040

Revenues (Assumes Fare = $0.28/mile + $5 Boarding Fee)

Ticket Revenue $110.0 $134.0 $161.0

On-Board Services $10.0 $12.0 $15

Total Revenues $120.0 $146.0 $314.0

Operating and Maintenance Expenses

Variable $60.1 $62.8 $65.6

Fixed $35.6 $35.6 $35.6

Total Expenses $95.7 $98.5 $101.2

Operating Surplus (Deficit) $24.3 $47.5 $212.8

Operating Ratio 1.25 1.48 1.73

Operating Ratio Analysis

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Dedicated Use Proforma (2010$ millions)

2021 2030 2040

Revenues (Assumes Fare = $0.40/mile + $5 Boarding Fee)

Ticket Revenue $181.0 $219.0 $260.0

On-Board Services $36.0 $44.0 $52.0

Total Revenues $217.0 $262.0 $312.0

Operating and Maintenance Expenses

Variable $109.1 $113.9 $118.7

Fixed $80.9 $80.9 $80.9

Total Expenses $190.1 $194.8 $199.6

Operating Surplus (Deficit) $26.9 $67.2 $112.4

Operating Ratio 1.14 1.36 1.56

Operating Ratio Sensitivity Analysis

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

• Developed a range of ridership and revenue for the corridor, which accounts for:

– Unforeseen increases in fuel and congestion

– The high-level, broad estimates from a feasibility study

• Focused the Operating Ratio sensitivity analysis on Dedicated Use:

– Conservative Scenario (base ridership/revenue)

– Optimistic Scenario (increased ridership/revenue)

Operating Ratio Sensitivity Analysis

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Estimated Feasibility Ratios 2021 2030 2040

Conservative

Shared Use 1.25 1.48 1.73

Dedicated Use 1.14 1.35 1.56

Optimistic

Shared Use 1.25 1.48 1.73

Dedicated Use 2.04 2.17 2.29

Benefit-Cost Analysis

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Benefit-Cost Analysis compares all benefits against all costs to

determine if high-speed rail is a sound investment (feasible) and

allows for comparisons and rankings of individual corridors.

Inputs of the benefit-cost analysis:

Net-Present Value: Present worth of cash flows (incoming and

outgoing) over a series of time.

- Values discounted to 2010$ (discount rate of 3%)

Analysis presents a Benefit-Cost Ratio, where:

> 1.0 = Positive

< 1.0 = Negative

Benefits Costs

Fare Revenues Capital Costs

Consumer Surplus Operating Costs

Resources Maintenance Costs

Benefit-Cost Analysis

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

2035 Annual Benefits (2010$ millions)

Dedicated Use Shared Use

Fare Revenue $186.9 $115.1

Consumer Surplus $129.4 $95.3

Resource and Other Mode Benefits $54.0 $39.6

Total Benefits $370.3 $250.0

• Consumer Surplus: value of time saved

• Resource Benefits: congestion, emissions, etc.

Benefit-Cost Analysis

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Benefit-Cost Scenarios of Shared and Dedicated Use:

These benefit-cost scenarios led to a potential “hybrid” option

Estimated Benefit-Cost Ratios

Conservative

Shared Use 0.92

Dedicated Use 0.49

Intermediate

Shared Use 1.00

Dedicated Use 0.93

Optimistic

Shared Use 1.07

Dedicated Use 1.12

25

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Final Observations

• Potential High Performance Rail (hybrid) Opportunity

• Dedicated, single track with passing sidings; initial diesel-electric power (full electrification and additional capacity when ridership/revenue demands)

Capital Cost Benefits of High Performance:

Operating Ratio Results Benefit-Cost Results

Cost Summary (2010$)

Shared Use Dedicated Use High Performance

Total Cost $5.0 Billion $16.1 Billion $8.9 Billion

Cost ($/Mile) $11.5 Million $41.3 Million $22.8 Million

Benefit-Cost

Conservative

High Performance 0.63

Intermediate

High Performance 1.21

Optimistic

High Performance 1.48

2021 2030 2040

Conservative

High Performance 1.03 1.21 1.41

Optimistic

High Performance 1.86 2.17 2.39

Final Observations

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

Shared Use vs. Dedicated Use vs. High Performance

Shared Use Dedicated Use High Performance

Capital and

O&M Costs

• Lower Capital Costs and

O&M Costs

• Higher Capital Costs and

O&M Costs

• Mid-range initial

capital costs

Ridership/

Revenue

• lower overall ridership

and revenue

• Higher overall ridership and

revenue

• Mid-range ridership

and revenue

Operating

Ratios

• Presents positive

operating ratio

beginning in 2021

• Potential for higher

operating ratios with

higher

ridership/revenue

• Presents positive

operating ratio beginning

in 2021

• Potential for higher

operating ratios with

higher ridership/revenue

• Likely to presents

positive operating

ratio beginning in

2021, but is higher

than both Shared Use

and Dedicated

Advantages

• Lower costs

• Higher ridership

• Positive operating ratios

in 2021

• Higher revenue

• No freight traffic delays

• Significant decrease in

travel time/ increase in

Level of Service

• Lower initial costs

• No freight delays

• Higher operating

ratio and B-C ratio

• Ability to upgrade

Disadvantages

• Potential delays

• Longer travel times

• Lower revenue

• Higher capital and O&M

costs

• Lower ridership

• Benefit cost is only

positive under optimistic

scenario.

• No electrification

initially; diesel-

electric power

27

Next Steps

Alignments/Stations

Capital Costs

Operating Plan

O&M Costs

Ridership and Revenue

Operating Ratio

Benefit-Cost

Final Observations

Next Steps

We are here

• Submit study for Federal Railroad Administration

approval

• If corridor is determined feasible, any stakeholders could

strategize for future federal funding for an

Environmental Study

• Update State Rail Plans to reflect findings and goals

moving forward

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www.newsouthhsr.org