Cost-Benefit Analysis: Seattle Link Light Rail, Initial Segment
Your presenters: Annie Gorman Hazel-Ann Petersen

to improve mobility within the urban areas by providing travel alternatives so they may grow comfortably while preserving rural areas for future generations.”
Presentation Agenda
Background
Costs
Benefits
Reconciliation and Conclusions

Background

Context
Regional light rail, with 40 miles of track, by 2030?
Initial segment is 13.9 miles long, reaches from downtown Seattle south almost to the airport
Monorail vs. light rail
Big Plans for Light Rail
Traffic in the Seattle Area
WSDOT 2006: Longer travel times, slower speeds, longer congestion peaks, less reliable travel time
Seattle-Tacoma 8th worst nationally for travel delays
I-90 / I-5 interchange is 18th worst bottleneck nationally
Regional population, especially in non-urban areas, growing over 5% per 5 years

Project Costs

Original vs. Projected Budget
Operating Expenses
National Expense Averages
Cost PV of Funding Sources At Various Discount Rates
Operating Profit for Link Lowest Across All Modes
Projected Funding Cost PV: Negative
Operating Expenses By Mode, 1996-2005 (National)
Nationally, Bus Remains Most Popular Transit Mode

Project Benefits

Benefits (Non-costs)
Fuel costs and vehicle non-depreciation
Other transportation costs (road capacity and parking)
Time spent commuting
Social costs: pollution, accidents, etc.
And a benefit: revenue from paying riders
Baseline Assumptions
Ridership and segment distribution
Bus capacity
Work days per year
Gas price
Commuting distance
Hourly wage
Parking cost

Value of commuting time
What social costs to include
At what level to value them
Fare contribution per person
Rate of increase/ decrease of ridership
Baseline Scenario
Revenue contribution $2.8 million*
Total Y1 benefits $24.8 million*
Total NBV $423 million* * in 2007 dollars, 6.5% interest rate
Sensitivity Analysis: Other Scenarios
More riders
Fewer riders
Red Meat
Granola
Oil Price Spike
Equal Time Value
Six Miles

Cost/Benefit Reconciliation

Issues to Address
Costs: 3 funding scenarios
Benefits: 8 situational scenarios
Costs: in 1999 dollars
Benefits: in 2007 dollars
Full Reconciliation
A Hypothetical Break-Even Scenario
Initial ridership = 16,000 (200% increase)
Ridership growth rate = 10% (333% increase; this means 53,820 riders daily in 2030 vs. 7224)
Per-gallon gas price = $9.78 (323% increase)
Average hourly wage = $100 (617% increase)
Conclusions
Likely NPV is ~ ($2.95) bn in 1999 dollars, ~ ($5.2) bn in 2007 dollars
Getting to break-even requires wildly improbable new assumptions
Mass transit isn’t worth it on paper

BACKUP SLIDES
Change In Profitability W/r/t Discount Rate of 10%

Categories: News