North Shore ConnectorCost-Benefit Study of Extending Pittsburgh
Light Rail Transit to the North Shore
Parshwanath AdirajaDan Concepcion
Nicolas Zitelli
April 28, 2004
North Shore Connector will extend LRT 1.2 miles
Source: Port Authority of Allegheny County
1.2 miles0.3 miles
North Shore Connector strategy entails three major goals
VISIONMore effectively link the Pittsburgh central business district with the North Shore area
GOALSEnhance accessibility to major sports, cultural, and civic facilities
Improve linkage between North Shore fringe parking and Golden Triangle employment centers
Facilitate economic development in the Pittsburgh North Shore
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
Current Light Rail System Data
Current Data
• 7.5 mil. boardings per year
• Approx. 20,500 boardings/day
• $1.25 peak/$1.75 off-peak
• Estimated “T” revenue = $11.25 mil. per year
Source: Port Authority of Allegheny County
Ridership expected to begin by 2008
North Shore Connector complete
Full Funding Grant Agreement in FY 2005
federal budget
Final design and engineering
Construction begins
2003 2004 2005 2006 2007 2008
Source: Port Authority of Allegheny County
Costs
Assumptions
• 30 year timeline (2004-34)
• Construction from 2004-08
• Discount rate = 7%
• Figures include 0.3 mile Convention Center spur
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
Operating Other
Capital
Costs
Capital Costs
Capital Costs = $362.8 mil
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
Operating Costs
Operating Costs = $8.5 mil/year
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
Other Costs
• Environmental
• Disruption
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
Total Costs
$362.8 mil Capital+ $8.5 mil/year Operating
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
= $411.9 mil Total (NPV)
Benefits
Assumptions
• 30 year timeline (2004-34)
• Ridership begins in 2008
• Discount rate = 7%
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
Operating
Other
Benefits
Operating Benefits
Ridership = 16,100 boardings/dayAverage fare = $0.89/trip
Time saved = 8 min/tripAverage wage rate = $33,837/year
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
Operating Benefits = $175.9 mil (NPV)
Other Benefits
Economic development
Access to North Shore
Downtown access to commuter parking lots
North Shore redevelopment will take place with or without LRT extension
There is already existing PAT bus service
Parking lots on North Side have existing shuttle service to downtown
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
Total Benefits
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
$175.9 mil Operating+ $0 Other
= $175.9 mil Total (NPV)
North Shore Connector will have a negative NPV
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
$175.9 mil Benefits (PV)- $411.9 mil Costs (PV)
= -$236 mil Total (NPV)
Project needs a discount rate of -2.1% to break even
$(300,000,000.00)
$(250,000,000.00)
$(200,000,000.00)
$(150,000,000.00)
$(100,000,000.00)
$(50,000,000.00)
$-
$50,000,000.00
$100,000,000.00
Discount Rate
NP
V
Federal80%
State17%
Local3%
Federal, State, and Local government money will finance capital costs
Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003
$290.3 mil Federal (Grant)+ $60.5 mil State (Appropriations)+ $12.1 mil Local (Appropriations)= $362.9 mil Total Funding
Opportunity Costs
• Operating Budget of Pittsburgh
= $338 mil (2004 estimate)
• Expenditures on general services
= $22.29 mil (2004 estimate)
• Pennsylvania’s expenditure on cost of premiums for Medicare participation
= $14.2 mil
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