Download presentation
Presentation is loading. Please wait.
1
Rail Investment and Public/Private Partnerships
September 2014 David P. Simpson David P. Simpson Consultants LLC
2
Rail Investment and Public Private Partnerships
Can states be more than observers to the process? September 2014 David P. Simpson David P. Simpson Consultants LLC
3
David P. Simpson David P. Simpson Consultants LLC
Discussion Sequence Who are the players? What do we know about them? What are the dimensions of the issue? Hotels, apartments or condos? Next steps – building a business model that works! September 2014 David P. Simpson David P. Simpson Consultants LLC
4
David P. Simpson David P. Simpson Consultants LLC
Who are the players? State DOT’s FHWA / FRA MPO’s (Large Cities) Class I carriers September 2014 David P. Simpson David P. Simpson Consultants LLC
5
David P. Simpson David P. Simpson Consultants LLC
Who are the players? State DOT’s FHWA / FRA MPO’s (Large Cities) Class I carriers Short line Carriers Large Trucking Firms New Rail Franchisees September 2014 David P. Simpson David P. Simpson Consultants LLC
6
What do we know about the the public stakeholders?
Very limited funding for rail Not part of mainstream planning efforts Traditional “Niche” focus – Public safety / grade crossings Shortlines/branchline preservation Passenger/commuter rail September 2014 David P. Simpson David P. Simpson Consultants LLC
7
What do we know about the private stakeholders?
Rail carriers in capacity rationing mode Long-haul, high volume corridor emphasis Threshold volumes for new services rising Trainload traffic opportunities a priority Little appetite to broaden market scope Domestic intermodal becoming more important September 2014 David P. Simpson David P. Simpson Consultants LLC
8
What do we know about the private stakeholders?
Real pricing increases Financials strong Little incentive to change business model September 2014 David P. Simpson David P. Simpson Consultants LLC
9
What do we know about the private stakeholders?
Motor carriers under duress – hours of service and job structure issues Extreme labor turnover issues Hours of service regs impact availability Drug testing Willingness to explore new structures Large vs. small firms September 2014 David P. Simpson David P. Simpson Consultants LLC
10
What are the dimensions of the issue?
September 2014 David P. Simpson David P. Simpson Consultants LLC
11
Public is sympathetic to freight rail
AASHTO Freight Rail Bottom Line Report September 2014 David P. Simpson David P. Simpson Consultants LLC
12
Public is sympathetic to freight rail
AASHTO Freight Rail Bottom Line Report Motorist frustration with truck volumes September 2014 David P. Simpson David P. Simpson Consultants LLC
13
Public is sympathetic to freight rail
AASHTO Freight Rail Bottom Line Report Motorist frustration with truck volumes Corridor studies confirm importance of freight congestion issue September 2014 David P. Simpson David P. Simpson Consultants LLC
14
Public is sympathetic to freight rail
AASHTO Freight Rail Bottom Line Report Motorist frustration with truck volumes Corridor studies confirm importance of freight congestion issue No public sector model to move forward with freight rail September 2014 David P. Simpson David P. Simpson Consultants LLC
15
Public is sympathetic to freight rail
AASHTO Freight Rail Bottom Line Report Motorist frustration with truck volumes Corridor studies confirm importance of freight congestion issue No structural model to move forward with rail Geographic scope a big challenge for states September 2014 David P. Simpson David P. Simpson Consultants LLC
16
Challenges of Public Rail Investment
Whose assets are they? September 2014 David P. Simpson David P. Simpson Consultants LLC
17
Challenges of Public Rail Investment
Whose assets are they? What are we buying? September 2014 David P. Simpson David P. Simpson Consultants LLC
18
Challenges of Public Rail Investment
Whose assets are they? What are we buying? How do we measure capacity? September 2014 David P. Simpson David P. Simpson Consultants LLC
19
Challenges of Public Rail Investment
Whose assets are they? What are we buying? How do we measure capacity? Who will guarantee service? September 2014 David P. Simpson David P. Simpson Consultants LLC
20
Challenges of Public Rail Investment
Whose assets are they? What are we buying? How do we measure capacity? Who will guarantee service? How do we track investment? September 2014 David P. Simpson David P. Simpson Consultants LLC
21
Challenges of Public Rail Investment
Whose assets are they? What are we buying? How do we measure capacity? Who will guarantee service? How do we track investment? How to allocate ongoing investment? September 2014 David P. Simpson David P. Simpson Consultants LLC
22
Public Sector Evaluation Criteria
Confidence in forecasted impacts September 2014 David P. Simpson David P. Simpson Consultants LLC
23
Public Sector Evaluation Criteria
Confidence in forecasted impacts Clarity of value equation Capacity vs. investment Service quality and market fit September 2014 David P. Simpson David P. Simpson Consultants LLC
24
Public Sector Evaluation Criteria
Confidence in forecasted impacts Clarity of value equation Capacity vs. investment Service quality and market fit Conservative market approach September 2014 David P. Simpson David P. Simpson Consultants LLC
25
Public Sector Evaluation Criteria
Confidence in forecasted impacts Clarity of value equation Capacity vs. investment Service quality and market fit Conservative market approach Capital vs. subsidy bias September 2014 David P. Simpson David P. Simpson Consultants LLC
26
Private Sector Evaluation Criteria
Return to shareholders September 2014 David P. Simpson David P. Simpson Consultants LLC
27
Private Sector Evaluation Criteria
Return to shareholders Cash versus annuity value September 2014 David P. Simpson David P. Simpson Consultants LLC
28
Private Sector Evaluation Criteria
Return to shareholders Cash versus annuity value Relationship to core business focus September 2014 David P. Simpson David P. Simpson Consultants LLC
29
Private Sector Evaluation Criteria
Return to shareholders Cash versus annuity value Relationship to core business focus Regulatory risk September 2014 David P. Simpson David P. Simpson Consultants LLC
30
Private Sector Evaluation Criteria
Return to shareholders Cash versus annuity value Relationship to core business focus Regulatory risk Commercial risk September 2014 David P. Simpson David P. Simpson Consultants LLC
31
David P. Simpson David P. Simpson Consultants LLC
So What? September 2014 David P. Simpson David P. Simpson Consultants LLC
32
Hotels, Apartments or Condos?
September 2014 David P. Simpson David P. Simpson Consultants LLC
33
What are structural options?
ASSET NETWORK STRIPPING INTEGRATION Easement sale/lease Broaden Core Biz Limited Corridors Multiple Use Assets Market Isolation Marketing Integration September 2014 David P. Simpson David P. Simpson Consultants LLC
34
Next Steps – Building a Business Model That Works!
September 2014 David P. Simpson David P. Simpson Consultants LLC
35
Next Steps – Building a Business Model That Works!
Identify key advantages and liabilities for various PPP business structures Carrier perspectives Public sector perspective September 2014 David P. Simpson David P. Simpson Consultants LLC
36
David P. Simpson David P. Simpson Consultants LLC
Next Steps Identify key advantages and liabilities for various PPP business structures Carrier perspective Public sector perspective Develop two or three specific business models that may have application to corridor needs. September 2014 David P. Simpson David P. Simpson Consultants LLC
37
David P. Simpson David P. Simpson Consultants LLC
Next Steps Identify key advantages and liabilities for various PPP business structures Carrier perspective Public sector perspective Develop two or three specific business models Engage in collaborative effort to secure funding and initiate pilot project(s) September 2014 David P. Simpson David P. Simpson Consultants LLC
38
David P. Simpson David P. Simpson Consultants LLC
Thank You! September 2014 David P. Simpson David P. Simpson Consultants LLC
Similar presentations
