Friday, June 3, 2011

Public-Private Partnership and Michigan's Rail Packages

We learned today that the Illinois state legislature just passed the "Public-Private Partnerships (PPP) for Transportation Act" (HB 1091). It lays out the details of how private companies can invest and participate in public transportation projects. Among other things, this will provide a very important source of revenue for the ambitious plans Illinois has for high speed rail.

We also learned today that Illinois's governor, Pat Quinn, has set up a partnership between the Illinois Department of Transportation and the University of Illinois to design and evaluate a 220-mph bullet train line. Our friend Rick Harnish, leader of the Midwest High Speed Rail Association, was appointed to the nine-person advisory board for the partnership.

What does this have to do with us? Well obviously, it sets an example of what a state can do to improve its sustainable transportation infrastructure. We've been watching Illinois rather enviously as they've funded and nurtured their "emerging speed" rail program, linking Chicago with all parts of the state by trains running 60 to 110 MPH.

Interestingly, the Michigan Department of Transportation (MDOT) recently published a draft rail plan. (This plan is in response to the Passenger Rail Investment and Improvement Act of 2008 "PRIIA" Sec. 302) It offers four "packages" dependent on available funding: Baseline, Good, Better, and Best.

Under the Baseline Package, $3.6B would maintain the current level of rail funding, but would eliminate the Wolverine (Pontiac to Chicago) passenger service. This is because, under PRIIA Section. 206, all states will have to pony up funds for their passenger corridor service (defined as lines under 750 miles long). This primarily affects New York and Michigan, since all other states with passenger rail corridors - notably, California, Oregon, Washington, Illinois, and North Carolina - already pay for their own corridor service. Michigan now pays for the Pere Marquette (Chicago to Grand Rapids) and the Blue Water (Chicago to Port Huron), and Amtrak funds the Wolverine.

The Good Package looks for $7.2B, of which $3.1B is currently unfunded. It adds 90 projects to the Baseline, including the Wolverine, WALLY, an intermodal freight facility in Detroit, and a new rail tunnel under the Detroit River to Windsor.

The Better Package, for $7.9B (a $3.7B increase) adds track upgrades to the Chicago-Detroit-Pontiac corridor to allow more high-speed passenger service, and feeders to the Grand Rapids and Port Huron services, plus other projects associated with the Detroit intermodal terminal and studies of further passenger services.

And finally, the Best Package costs $9.2B, requiring a $5B additional shot in the arm. More projects would be completed, the most exciting of which would be buying new passenger rail equipment and providing passenger service to Traverse City. It will be a cold day in hell before the legislature approves anything like this, but what if the climate in Michigan were right for public-private investment?

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