Transit P3s On Track

Posted on September 30, 2009 by Margo Bennett

Two potential public-private partnership transit projects appear closer to leaving the station, after several delays. Denver Regional Transportation District (RTD) recently held a public hearing on the Eagle P3 project and is poised to issue a request for proposals to three prequalified/shortlisted teams on September 30th with proposals anticipated in March 2010. Bay Area Rapid Transit (BART) is on an accelerated schedule for its stimulus-revamped Oakland Airport Connector project, with proposals due in late September and contract award slated for December.

The Federal Transit Administration selected both projects to participate in the Public-Private Partnership Pilot Program or Penta P, a program authorized by SAFETEA-LU to demonstrate the pros and cons of P3s for certain new FTA-funded fixed guideway capital projects. FTA officially launched the program in January 2007, focusing on projects that utilize procurement methods that integrate risk-sharing and accelerate project delivery.

FTA recognized the inherent obstacles in transit P3s in its 2007 “Report to Congress on the Costs, Benefits, and Efficiencies of Public-Private Partnerships for Fixed Guideway Capital Projects,” emphasizing that private partners for transit projects have been reluctant to provide long-term equity investment or assume ridership or revenue risk. Overcoming the challenges to private sector equity investment and assumption of revenue risk for transit projects will be a gradual process, even with Penta P support. Denver’s Eagle P3 project, to be delivered as an availability payment concession, calls for the concessionaire to finance the project, although the RTD will assume the farebox risk. While BART’s initial plans for the Oakland Airport Connector called for the private sector to provide financing and share in the farebox risk, BART has since switched gears; the contractor will now design, build, operate and maintain the project, but BART will fund the project itself, using a combination of traditional funding sources and an injection of stimulus funds.
 

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FTA Considering New Safety Oversight for Rail Transit

Posted on August 19, 2009 by Adam Horsley

New subway safety standards may be coming soon to a city near you.  The Federal Transit Administration (FTA) has assembled a team of transportation safety experts to explore rail transit (subway, light rail, and commuter rail) safety reforms, which may extend to bus operations.   

FTA is currently prohibited by law from establishing national safety standards, requiring Federal inspections, or requiring specific operating practices, but that may soon change.  In testimony before the Senate Banking Committee, FTA Administrator Peter Rogoff condemned several recent transit collisions as “unacceptable” and announced the Obama Administration’s intent to pursue reform. 

Most rail transit is free from federal safety oversight. There are exceptions - certain commuter rail systems are funded by FTA but regulated by the Federal Railroad Administration safety regulations.  But the majority of urban rail transit systems are overseen by the State safety oversight agencies. 

Any new safety oversight requirements will probably be tied to FTA’s traditional role as a grant-making agency. Administrator Rogoff highlighted the need for new transit funding, citing a National Transportation Safety Board  preliminary report indicating that the “condition of equipment and age of the rolling stock may have resulted” in the Washington D.C. crash earlier this year, which killed 9 and injured more than 70 passengers.

Aging equipment is a serious concern nationwide.  FTA’s recent rail modernization study surveyed the seven largest transit operators, which carry more than 80% of the nation’s transit passengers.  More than 33% of the assets held in these systems were in marginal condition or had already exceeded their useful life.  Servicing this system’s backlog of unmet needs would cost a staggering $50 billion, by the study’s estimates.

As the new surface transportation authorization process gets underway the Administration’s plans will no doubt provide fodder for vigorous debate.  Administrator Rogoff’s testimony seems to hint that new safety measures may be linked to FTA’s discretionary New Starts program.  In the meantime, look forward to a follow-on FTA study identifying safety critical infrastructure and industry wide “state of good repair” needs.  

Video of the hearing "Rail Modernization: Getting Transit Funding Back on Track," along with written statements from the heads of the Chicago Transit Authority, the Washington Metropolitan Transit Authority, New Jersey Transit, and the Metropolitan Atlanta Rapid Transit Authority are available from the Senate Banking Committee's website.

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