Policy Options for Intermodal Freight Transportation Special Report 252 (1998) / Chapter Skim
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6 Summary, Conclusions, and Recommendations
6 Summary, Conclusions, and Recommendations
Pages 91-110
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From page 91... ...
business. Freight transportation is a joint enterprise of the private sector, government, and public enterprises (for example, public port authorities)
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From page 92... ...
Federal surface transportation programs enacted in 1991 and 1995 contained important steps toward a new government approach to the freight sector, including provisions to raise the priority of projects serving freight, allow more flexibility in using federal funds for freight projects, and make way for new forms of public-private ventures. Also in this period, state and local governments and public port and airport authorities have initiated a variety of freight development initiatives, often in partnership with the private sector.
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From page 93... ...
Intermodalism is seen by the public sector as a means to ends considerably more diverse than simply improving freight transportation efficiency. Primary motivations more often are controlling highway agency costs by reducing truck traffic, reducing highway congestion, reducing pollution, and stimulating local employment through terminal developments.
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From page 94... ...
PRINCIPLES FOR GOVERNMENT INVOLVEMENT Government builds and operates parts of the infrastructure for freight transportation, collects user fees and general tax revenues to finance public facilities, and imposes social and economic regulation on the freight industries. Governments today are reexamining the scope of their involvement in freight transportation.
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From page 95... ...
· The project falls within the established government responsibility for major parts of the transportation infrastructure. If government involvement cannot be justified on one of these grounds, the project belongs in the private sector.
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From page 96... ...
A critical approach by public officials to proposals for publicprivate developments in which the public sector carries a major cost burden or risk is essential if public-private partnerships are to remain viable means of infrastructure finance for the long term. Projects that fail to live up to their promises will undermine public and private willingness to support future partnerships.
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From page 97... ...
However, evaluation of a transportation improvement ought to start with assessment of transportation benefits. The appropriate framework for evaluating intermodal freight project proposals is to concentrate on quantifying and valuing their direct effects as transportation projects: changes in shipper total logistics costs, changes in external costs such as pollution and congestion, and effects on the location of economic activity.
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From page 98... ...
Compare the actual results of projects with the projections. FEDERAL SURFACE TRANSPORTATION PROGRAMS AND FREIGHT The federal surface transportation program governed for the past 6 years by the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
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From page 99... ...
Limiting use of Highway Trust Fund revenues to highway-only projects denies local decision makers, who are responsible for the effective operation of the transportation system, the power to make the most sensible use of transportation resources. The argument against greatly increasing state and local government flexibility to use Highway Trust Fund revenues for nonhighway freight projects has several dimensions.
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From page 100... ...
Although federal program rules exert an important influence on local decisions, problems concerning project selection priorities require local solutions. Policies aimed at increasing the involvement of freight interests in the public project selection process rather than at restricting local responsibility appear more promising.
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From page 101... ...
Such conflicts can be lessened, and local decisions can be expected to harmonize with national interests, if state and local governments have mechanisms for recouping costs of publicly provided facilities through user fees, means are available to compensate parties that bear the spillover costs of development projects, and local governments are not induced by the availability of external aid to undertake uneconomic projects. Federal policy should seek to bring about these conditions.
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From page 102... ...
The overall size of the federal surface transportation program -- the dollars authorized and disbursed for highways and other transportation projects -- is the characteristic of the present program with the greatest effect on freight. Highways are the major government responsibility affecting the intermodal freight system.
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From page 103... ...
In some cases, flexibility in applying regulations on anticompetitive practices may be advisable to permit industry collaboration on key precompetitive aspects of transport-related information infrastructure. Economic Regulation of Freight Transportation Ocean carriers engaged in scheduled service have antitrust immunity under U.S.
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From page 104... ...
Mechanisms established for project finance can help ensure that necessary and valuable projects are built and that government avoids participation in projects with low payoff or little public significance. The committee has examined the following selected policy issues that are relevant to state and local governments deciding on finance arrangements of individual projects or to the federal government, which influences project finance decisions through its aid programs and tax laws.
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From page 105... ...
Such projects should be financed by user fees or private-sector contributions, with each user paying a fee commensurate with the cost of providing service to that user. In some projects, external benefits (such as pollution reduction or mitigation of highway congestion)
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From page 106... ...
The policy options for Congress are to · Preserve and reinforce the traditional mechanism by spending down balances and curtailing diversions; · Maintain the status quo, under which a major portion of spending is for the direct benefit of user fee payers but revenues are also used for other purposes or retained; · Create multimodal trust funds into which users of all freight modes would pay and that would be available for multimodal public works projects; or
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From page 107... ...
There is no economic reason why the optimum level of investment in a category of facilities should necessarily always equal user fee revenues. Rules for Use of Tax-Exempt Bond Finance Proposals have been made for altering the rules for tax-exempt bond finance to make it easier for public-private transportation projects to qualify.
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From page 108... ...
Principles for Government Involvement The federal government, cooperatively with the states and metropolitan planning organizations, should develop standard methods for evaluating freight infrastructure investment proposals. Methods should be consistent with Executive Order 12893, "Principles for Federal Infrastructure Investments." Federal mandatory standards are not necessary or practical; rather the federal role should be to demonstrate the utility of the methods.
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From page 109... ...
The federal government needs to maintain existing data programs that collect freight activity data and ensure that these programs are compatible with the requirements of local and regional transportation planning. The possibility that freight infrastructure improvements may yield economic benefits in the form of network externalities or reorganization benefits that cannot be measured by observing the direct transportation cost savings produced by the project remains a poorly understood aspect of transportation project evaluation.
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From page 110... ...
Department of Transportation along lines that would parallel commercial realities in intermodal freight and passenger transportation. Public Finance of Intermodal Freight Projects Research is needed on the costs and distributional effects of alternative financing mechanisms for public works projects, including tax-exempt bond finance, user fees, and use of federal aid.
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