Financing transport capacity in the United States Is experience elsewhere useful? Presentation to Minnesota Agri-growth Council Minneapolis, MN March 21, 2002 Louis S. Thompson Railways Adviser The World Bank http://www.worldbank.org/transport/rl_over.htm
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Financing transport capacity in the United States
Is experience elsewhere useful?
Presentation to Minnesota Agri-growth CouncilMinneapolis, MNMarch 21, 2002
Louis S. ThompsonRailways AdviserThe World Bankhttp://www.worldbank.org/transport/rl_over.htm
Freight demand growth in the U.S.
Demand has grown steadily for truck and railThe relationship of transportation demand to GDP is strong, but a chicken and egg issueLimited potential for modal shiftsLimited effect of electronic data versus freight movement
Ton-Km in the U.S. by mode(000,000 Ton-Km)
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
29 34 39 44 49 54 59 64 69 74 79 84 89 94 99
Rail Truck
Lakes Canals
Pipelines Air
Freight modal shares in the U.S.(% T-Km)
0
10
20
30
40
50
60
50 55 60 65 70 75 80 85 90 95
Rail Truck Lakes Rivers Pipelines Air
Deregulation
U.S. transportation capacity history -- railroads
Rail (responding to market incentives)? Early growth, then decline? Post –Staggers deregulation, reducing capacity,
increasing demand and density.? Dramatic productivity growth, decline in tariffs
68 cities total. 50 largest plus 18 selected by States.5 congested in 1982, 40 congested in 1997
Source: National Transportation Statistics 2000
Financing issues: past and future
How the U.S. financed transport capacity in the pastTransport financing in U.S. compared with elsewhereThe various degrees of cross subsidy
Balance of U.S. transportation spending in 1998
-120,000
-100,000
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
Ch
arg
es
Sp
end
ing
Net
Ch
arg
es
Sp
end
ing
Net
Ch
arg
es
Sp
end
ing
Net
Ch
arg
es
Sp
end
ing
Net
Ch
arg
es
Sp
end
ing
Net
StateFederal
Highways
Air
Transit
Water
Rail
Average highway user charge revenue: U.K. compared to U.S.(US cents per vehicle mile)
05
101520253035404550
Auto Light trucks Heavy trucks
UKUS
Source: Sansom, Nash, Mackie, et al, “Surface Transport Costs and Charges, Great Britain, 1998And, Addendum to the 1997 Federal Highway Cost Allocation Study, May, 2000
Ratio of highway user charge revenue to fully allocated infrastructure costs
050
100150200250300350400450
Auto Light trucks Heavy trucks
UK
US
Source: Sansom, Nash, Mackie, et al, “Surface Transport Costs and Charges, Great Britain, 1998And, Addendum to the 1997 Federal Highway Cost Allocation Study, May, 2000
Financing capacity in the future:barriers
What can the U.S. afford?? Railroads? Highways
Getting prices right, for capacity and for environmental effectsFunding and administrative barriers (FAA and air traffic control, Corps of Engineers, funding fences)A better public/private balance? Public investment in private rail infrastructure?? Private investment in highway infrastructure?
New technology (road pricing, intelligent vehicles, rail signaling and electrification): does or can it promote efficiency and increase capacity?
GDP/Capita 1999 (US$ at PPP)
0
5000
10000
15000
20000
25000
30000
35000
India
China
Rom
aniaB
razil
Russia
Mexico
Poland
Spain
Ireland
Italy
Sweden
UK Finland
France
Germ
anyN
etherlandsC
anada
Japan
Belgium
Denm
ark
Norw
ayUS
Source: WDR 2000/2001, pg 274/275
Class I railroad investment in track as % of total investment
Gasoline and diesel fuel prices (US $/gallon) 1998
00.5
11.5
22.5
33.5
44.5
5
Saudi Arabia
Untaxed
Russia
India
China
US A
verageM
exico
Brazil
Canada
Rom
ania
Poland
Germ
any
Japan
Spain
France
Finland
Netherlands
Sweden
Belgium
Denm
ark
Italy
Ireland
Norw
ay
UK
Gasoline (super)Diesel
Source: Fuel Prices and Taxation, GTZ, May 1999
Ratio of highway user charge revenue to marginal transport costs in the U.K. and U.S.
0102030405060708090
Auto Light trucks Heavy trucks
UK
US
Source: Sansom, Nash, Mackie, et al, “Surface Transport Costs and Charges, Great Britain, 1998And, Addendum to the 1997 Federal Highway Cost Allocation Study, May, 2000
Percent of marginal costs attributable to congestion
0102030405060708090
Auto Light trucks Heavy trucks
UK
US
Source: Sansom, Nash, Mackie, et al, “Surface Transport Costs and Charges, Great Britain, 1998And, Addendum to the 1997 Federal Highway Cost Allocation Study, May, 2000