Framework for Assessing the ROI for High-Speed and Intercity Rail Projects

Intercity passenger rail demand in the U.S. has shown an unprecedented surge in the new millennium. Amtrak, the primary intercity rail service provider in the country, reports more than 30 million ridership in 2015, almost 1.5 times of what it was in 2000 (Amtrak, 2017). To accommodate the ever increasing rail passenger demand and to meet the rising expectations of riders for quality rail travel experience, several states have been actively pursuing new high-speed and intercity passenger rail (HS&IPR) services. Prominent examples include the California High-Speed Rail project, the Midwest Regional Rail Initiative (MWRRI), the Florida High-Speed Rail project, and the project to improve intercity passenger rail between North Carolina and Virginia, among others.

Principal Investigator(s):

P.S. Sriraj, PhD, Director, Urban Transportation Center at UIC
Bo Zou, PhD, Assistant Professor, College of Engineering at UIC
Steve Schlickman, JD, Senior Research Specialist
Glen Weisbrod, EDR Group

Participants:

P.S. Sriraj, PhD, Director, Urban Transportation Center at UIC
Bo Zou, PhD, Assistant Professor, College of Engineering at UIC
Steve Schlickman, JD, Senior Research Specialist
Glen Weisbrod, EDR Group
Ahmadreza Talebian, PhD, Post-Doctoral Research Fellow, UIC
Kyle Schroeckenthaler, EDR Group
Adam Blair, EDR Group

Status:

06/01/2017

Objective:

This report lays out a framework for presenting the ROI (return on investment) from HS&IPR that explicitly allows for a variety of alternative perspectives: including spatial areas of concern (national, regional or local benefits) and the viewpoints of specific stakeholders. The selection of an applicable perspective will depend of “who has standing” in the determination of what constitutes a benefit.

Strategy:

This study takes an integrative approach to encapsulate all benefit and cost elements involved in conventional benefit-cost analysis (BCA), economic impact analysis (EIA), and social impact analysis (SIA). BCA is an assessment process focusing on the overall benefits and costs incurred in the lifetime of a project and depicting the benefits and costs in terms of the net present value.

Expected Results or Products:

This report laid out a comprehensive assessment framework to illustrate the true returns on investment of HS&IPR projects that encompass aspects of three forms of economic analysis — BCA, EIA and SIA – and also allows for both future outcome measures and time stream benefit measures.

The report is organized this way:

  • Chapter 1 includes an introduction to the study and outlines the need for a framework to address return on investment and takes an integrative approach to encapsulate all benefit and cost elements involved in conventional benefit-cost analysis, economic impact analysis, and social impact analysis.
  • Chapter 2 provides the cost elements that need to be considered.
  • Chapter 3 addresses the various benefit and impact elements along with a predictive methodology for estimating them and the sources of data required.
  • Chapter 4 develops and recommends a consistent methodology for estimating different types of benefits and costs. The assumptions, estimation procedures and data requirement also are discussed in detail.
  • Chapter 5 presents a framework for a Business-case ROI calculation, and the Guidance on using the framework is offered.
  • The UIC-EDRG team conducted a comprehensive review of existing literature on the topic as well as the estimates of the various benefits and cost elements (Appendix A, B). Appendix C presents applications of the business-case ROI framework to HSR projects in California and the Midwest.

Download:

Download the report

Contact:

P.S. Sriraj
Urban Transportation Center
University of Illinois at Chicago
412 South Peoria Street, Suite 340
Chicago, IL 60607
Voice: (312) 413-7568
Fax: (312) 413-0006
Email: sriraj@uic.edu

Sponsors:

The American Public Transportation Association (APTA)