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Rail News Home Passenger Rail

September 2007

Rail News: Passenger Rail

Putting PPPs to the test

In late July, the Federal Transit Administration (FTA) chose two Regional Transportation District of Denver (RTD) FasTrack projects for the Public-Private Partnership Pilot Program, or Penta-P, putting them on the (forgive the pun) fast track to completion.

The agency’s East Corridor and Gold Line projects will be managed under the program, which was created as part of SAFETEA-LU to help U.S. Department of Transportation officials determine whether public-private partnerships speed project completion, provide more reliable projections of costs and benefits, and improve project performance. Penta-P is designed to streamline the federal funding application process.

“Unlike conventional procurement methods for new construction, in which specific jobs are bid out separately, public-private partnerships transfer responsibility for performing construction and operating responsibilities to a single private entity or a consortium of private companies,” according to a FTA press release. “This allows for greater project innovation and project integration.”

Private capital benefits
And, PPPs help reduce design-build, operations and maintenance costs, provide agencies with longer-term debt and an array of financing tools, and allocate long-term risk, according to FTA spokesperson Ketrina Nelson.

“The investment of private capital in major transit projects is likely to improve the accuracy of cost and ridership projections used to justify public investment in such projects,” said FTA Administrator James Simpson in a May 2007 speech before the House Subcommittee on Highways and Transit Committee on Transportation and Infrastructure. “We believe Penta-P will be a successful extension of the federal-local partnership, resulting in more efficient federal investments in new major capital projects.”

RTD will test that theory with the 23.6-mile East Corridor, a commuter-rail line that will run from Denver Union Station to Denver International Airport, and the 11.2-mile Gold Line, a commuter-rail corridor that will run from Union Station through northwest Denver. Construction on both lines is scheduled to begin in 2011 and be complete in 2015. The agency also plans to take the PPP approach for the Northwest and North Metro corridors included in the FasTracks program, which calls for building 119 miles of commuter- and light-rail lines during the next decade.

“We may not be applying for federal funds in those corridors — we have our own public-private partnership program we’re looking at,” says RTD spokesman Scott Reed.

— Angela Cotey

Back to basics
Houston METRO takes a simpler approach to car procurement

If you’re buying a car, chances are you’ll visit a dealership, scope out a few models and select a vehicle from the lot that best suits your needs. That’s pretty much what the Metropolitan Transit Authority of Harris County, Texas (METRO) plans to do in the coming months when it purchases 100 light-rail vehicles — but it’s a car-procurement method that’s almost unheard of in the U.S. transit industry.

“Typically, you prepare a detailed specification where you identify all the components and features you want on the car, right down to the last nut and bolt,” says METRO President and Chief Executive Officer Frank Wilson. “Our thought was, ‘We work with the best in the business, they have sold a certain type of car to other clients that they’ve already designed.’ We’re looking to buy what the rail-car industry is comfortable making — proven technology that they have applied to other clients and that has an operating track record.”

Millions in savings
In return, METRO will receive a high-quality vehicle in a shorter time frame and at a lower cost, says Wilson. The agency expects to save millions because it won’t have to pay an engineering firm to develop car specifications or cover administrative costs associated with developing and tweaking special-order vehicles. And, if the selected vehicle manufacturer already is building the cars for another agency, METRO could tack their order onto it and receive a quantity discount.

So why don’t more transit agencies take such an approach?

“Some people would say, ‘Well, we’re different because we want a different seating arrangement, we want a more aesthetically pleasing look, we want this much separation between the wheels, we have high-level platforms,’ etc.,” says Wilson. “In modern times in the U.S., we’ve killed the rail supply industry by overspecialization and overcustomization.”

Not that METRO doesn’t have some requirements. Vehicles would have to be equipped with an air-conditioning system that can withstand the hot Houston summers, feature low floors and meet stringent performance requirements, says Wilson.

The agency expects to select a car manufacturer by December or January. Among the contenders: Kinkisharyo International, Bombardier Transportation, CAF USA, Siemens Transportation Systems Inc., Alstom Transport, AnsaldoBreda and Angel Trains.

The vehicles would be used to operate more trains on the agency’s existing 7.5-mile rail line, or run on the 30 miles of new light-rail lines METRO expects to open by 2012.

— Angela Cotey


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