4.3. SR 06-16-2003 - Laserfiche WebLink

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Review of Benefit-Cos! Analysis of Northstar Commuter Rail 6 Operating costs-MnDOT's calculations of operating costs are flawed in that they only count the first fifteen years of those costs. By doing so, MnDOT allows itself to claim that the depreciated value of rail equipment after fifteen years represents a benefit of $134 million. But if MnDOT continues to run commuter rail for another few years, the equipment will be fully dePreciated. MnDOT says that operating costs for the first fifteen years will be $199.5 million, or $13.3 million a year. Adding another fifteen years of operating costs to this and discounting them by 4.5 percent for fifteen years (because they will begin fifteen years after the first fifteen years of costs) increases operating costS' by $103.1 million. At Anton, Lubov's discount rate of 2.5 percent, $137.7 million must be added to the total. That is not all. After twenty-five years to thirty years, all of the rail equipment will be fully depreciated (dilapidated is more like it), and will need to be completely replaced. If the cost is the same as the cost today and replacement takes place in 2037, then $74.2 million should be added to the total cost at MnDOT's 4.5 percent discount rate and $13Z5 million should be added at Anton, Lubov's 2.5 percent discount rate. In short, instead of counting the $134 million equipment value after fifteen years as a benefit, MnDOT should add $103.1 million to operating costs. Because of the lower discount rate, Anton, Lubov should add $137.7 million to operating costs. Operating and capital costs can be added after thirty years, but it is reasonable to cease adding costs when the proposed equipment is fully depreciated and hope that future generations will be smart enough to not waste their money on replacement equipment. Other costs-Although MnDOT counts pollution and vehicle accident costs for autos, it apparently ignores such costs for the rail line. Rural interstate freeways average 7.9 fatalities and 39.9 serious injuries per billion passenger miles. Urban interstates are lower: about 3.9 fatalities and 32.8 serious injuries. Commuter rail averages 8.1 fatalities and 31.7 injuries per billion passenger miles. Thus, the North Star rail line will probably cause as many accidents as it avoids and is likely to kill more people. Similarly, it is possible that the Diesel locomotives pulling the Northstar commuter rail will generate more pollution than may be saved by any reduction in auto driving. An environmental audit of a commuter rail line in Vermont found that the rail service produced a net increase in sulfur dioxide, nitrogen oxides, particulates, and other pollutants.3