4.4. SR 03-17-2003 - Laserfiche WebLink

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Executive Summary The estimated benefits of the Northstar Commuter Rail are $579 million while the estimated total costs of building and operating the rail line are $502 million, both measured in 20075. Thus the benefit/cost ratio is estimated as 1.15, or $1.15 for every dollar of total cost. For this analysis, the total costs consist of the estimated construction cost of $302 million and the present value of the stream of operating costs over 15 years that is calculated to be $200 million. The benefits consist of time savings by commuters, vehicle operating cost savings, vehicle accident cost savings, pollution cost savings, and urban parking cost savings. The total costs to be bom by the State on Minnesota for construction and operation are estimated to be $195 million. Therefore, the return to the State of Minnesota is $579 million/S195 million or $2.97 for every state dollar. This study improves on an earlier calculation of the benefits and costs of the Northstar Corridor made by the MiImesota Department of Transportation (MnDOT) in 2002. · That study calculated an overall benefit/cost ratio of 0.84, · implying a return of $2.10 for every state dollar. In addition, some people erroneously cite calculations contained in a 1998 study by Parsons-Brinckerhoff (PB) as though they apply Northstar Commuter Rail. In fact, that study considered a proposed route of approximately 30 miles from Minneapolis to Elk River. · PB calculated an overall benefit/cost ratio of 0.26 for the rail line they analyzed, but · PB could not calculate a return on state spending because no financing proposal had been made for the route they analyzed. This report sets forth the results of the calculations done by Anton, Lubov & Associates. It first describes the benefits and costs of the Northstar commuter rail project and estimates the return to the State of Minnesota for its investment. The report then compares the ALA estimate with two previous studies, the Mn/DOT 2002 study showing a ratio of 0.84 and the Parsons Brinckerhoff 1998 study showing a ratio of 0.26. The final section of the report summarizes and quantifies the differences in assumptions that explain most of the difference in the three benefit cost ratios. This report will demonstrate that the ALA estimate of a benefit cost ratio of 1.15 for the Northstar commuter rail project represents a reasonable and thorough analysis of the data, as well as a sound basis for a policy decision regarding the Northstar Corridor commuter rail project.