District Exploring a Semi-Privatized Streetcar, Bus System
The priority lines.
Well, this could be a way to build a massive infrastructure project without busting the city's budget: The District Department of Transportation is asking for ideas on how to bring in private capital for a 22-mile chunk of the original 37-mile streetcar system, and build it over the next five to seven years.
A request for information issued today also includes a proposal for a non-regional bus network, possibly independent from the Washington Metropolitan Area Transportation Authority, that would include and expand upon the Circulator.
"It's an exploratory look at privatizing the streetcar, and putting that together with bus service in the District," says DDOT spokesman John Lisle. "We're trying to find a solution to build out the system without running up against the city's debt cap."
The District has spent about $53 million on the streetcar thus far, funding the H Street/Benning Road segment itself. But it's going to need federal funding for the Anacostia extension, and has been studying ways to extend it across to K Street and Washington Circle (which they are still calling the "One City Line"). DDOT estimates that the 22 miles of the streetcar it's prioritized will cost another $1.2 billion, and doesn't plan to issue more bonds to pay for it. The bus system it envisions will cost an estimated $70 million per year.
Who could possibly be D.C.'s partner on such a large undertaking? Mayor Vince Gray is currently in China, and has been talking with a group of investors about underwriting the streetcar. But perhaps there's someone else out there; the request for information specifically invites input from "equity investors with a substantial development and investment track record in newbuild transportation projects exceeding US$250 million individually, particularly urban rail infrastructure."
So fear not, Marion Barry—if this works out, you'll be able to get a streetcar and pay for your rec centers too.
12:00 pm
Sigh. Of course if we hadn't used up the bulk of our financial space for bond funding subsiding the trivial entertainment choice of pro sports we could fund needed infrastructure ourselves. Kind of funny really. We burn our bonds subsidizing trivial entertainment choices, then privatize transportation infrastructure. Makes perfect sense to me.
12:45 pm
Hmm...lets see. Who are we going to find to be partners in running a money losing venture that will cost a fortune to build and only return a 31% farebox recovery?
Folks, the only way private entities get involved in public infrasturucture is when they can set the price (495 Lexus lanes or Greenway anyone). DDOT's own projections had this thing costing 2 bucks a ride, but that was only paying for 30% of the cost to operate (construction costs are excluded).
So, a $6 dollar trip gets the system at break even, but since private companies don't want to break even and actually want to make a profit, the cost per ride would be around $7 bucks.
Problem is, no one is going to ride it when it costs 7 bucks to ride a couple miles.
This is why these ridiculous boondoggle streetcars are a waste of time and money.
1:07 pm
So, a $6 dollar trip gets the system at break even, but since private companies don't want to break even and actually want to make a profit, the cost per ride would be around $7 bucks.
You may want to have someone take you aside and explain the difference between capital investment and operating costs. Just sayin'.
1:09 pm
If the district were to do this on their own money, they would then start turning a profit once you account for taxes from increased property values and economic activity. That is really the only way to profit from this project.
I would think that if a private company were to build our street car system they would then have to be cut a share of the tax take. I dont know the mechanics of such a thing but it could be possible.
Everybody can win here. The district gets its streetcar system faster and starts earning money faster. Then they give some of the new money to the company that financed the system in a fraction of the time that the district could have
1:57 pm
"I would think that if a private company were to build our street car system they would then have to be cut a share of the tax take. I dont know the mechanics of such a thing but it could be possible."
Maybe some kind of tax increment for properties location adjacent to or very near a line?
2:08 pm
Streetcar to nowhere seeks investors looking for capital losses.
4:00 pm
I say let private enterprise and riders pay for 'yuppie theme park' amenities. Why should taxpayers pay for streetcars to nowhere? Get on the X2 bus if you want to ride subsidized transportation. At least it connects to the Metro.
5:01 pm
There is no way Chinese companies are prepared to construct infrastructure in this country, let alone a politicized place like DC. They're great at building highways and railroads in Sudan where there are no labor or safety standards, no environmental protection, and no need for community input and buy-in.
For a recent story on their troubles in western countries, see "European Project Trips China Builder" - http://professional.wsj.com/article/SB10001424052702303459004577363842916410790.html
5:58 pm
If we're going to stop subsidizing something, it should be roads and gas. Why does everyone think they're entitled to a highway and cheap gas? Drivers should fund our military adventures in the Middle East by paying $18/gallon? Too expensive? Take public transportation.
9:10 pm
Sorry blooming dude. You need a new red herring to flail around. Through user fees, tolls, nearly 56 percent of the nations roads are not only built, but operated with the money collected. This versus the zero percent in the capital construction cost of your mass transit and (in exceptional situations, 50 percent of the yearly operation and maintenance. more than 30% of the money collected by the federal gas tax every year is diverted to other transportation initiatives like mass transit and biking. No, in nearly all cases, drivers are already paying for the construction and maintenance of your mass transportation system through gas taxes and tolls. Hell, the drivers of the Dulles toll road are paying 3 billion or more than 50% of the total cost of construction of the silver line. When was the last time money from metro fares was used to build or repair a road? Never...
8:21 am
Roads:
You are forgetting to factor in the several trillion dollars the Iraq War is costing us.
That's directly related to automobile transit.
Also worth noting that you aren't accounting for the actual interstate highway system and all the local feeder roads that have been around for half a century. Those most certainly were not self-supporting.
The considerable bulk of the road transportation system in the US was in fact subsidized.
I'm not saying it shouldn't have been.
I'm just saying that all forms of transit (except walking I guess) are subsidized.
8:22 am
"When was the last time money from metro fares was used to build or repair a road? Never..."
So the solution is to stop subsidizing mass transit and dump those people onto roads?
9:09 am
Jeez...here we go.
According to the EIA, of all the oil imported into the US, a full one third is refined into diesel. Since there are practically zero diesel cars in the US, it is all used to truck your goods and services around the nation, or did y ou think your local Apple Store or Whole Foods was sticked by bicycle.
Another 20% is refined into plastics, but I am sure you don't use any plastics in your goods, services, clothes etc. The evil passenger car consumes 38% of the oil the US uses, so lets no pretend in some twised way that every war of choice the US has engaged in has been soley for the big bad car, cause it just ain't so.
Also, 70 percent of the construction and maintenance costs of Interstate Highways in the United States have been paid through user fees, primarily the fuel taxes collected by the federal, state, and local governments. To a much lesser extent they have been paid for by tolls collected on toll highways and bridges. The Highway Trust Fund, established by the Highway Revenue Act in 1956, prescribed a three-cent-per-gallon fuel tax, soon increased to 4.5 cents per gallon. In 1993, the tax was increased to 18.4 cents per gallon, where it remains as of 2012.
So yes, 70% has been paid for by the user. The worst part is nearly 90% would have ( would be) paid for if the money collected via the gas tax was fully used for road infrastucture rather than being siphoned off to pay for mass transit.
Again I ask you, how much of the construction of ANY mass trasit system has been paid for via user fares?
The answer is zero. The DC metros yearly operating expenses are a full 54% subsidized on a yearly basis, the billions it cost to build all come from someone else...not the case for roads and hasn't been for 60 years.
This ridiculous war on drivers is only borne by folks like yourself who have no idea what you are talking about, and no clue that on top of paying for 70% of all road construction in the US, driver taxes and tolls have paid for 100% of your mass transit. Don't worry, I don't expect you to be an adult and say thank you.
Finally... "So the solution is to stop subsidizing mass transit and dump those people onto roads?"
No, the answer is to charge transit users a fare that more approximates their cost. Even if DC metro users paid the same percentage drivers do for upfront cost and yearly O&M, your base one way fare would be triple what it is now.
10:48 am
I think John said it best at the top: "if we hadn't used up the bulk of our financial space for bond funding subsiding the trivial entertainment choice of pro sports we could fund needed infrastructure ourselves. Kind of funny really. We burn our bonds subsidizing trivial entertainment choices, then privatize transportation infrastructure."
It's a total clownshow on the DC Council and in the CFO's Office that they saddled us with the ballpark bonds of over $500 million. We will be paying off those freaking bonds & their interest burden for decades, according to last year's annual financial report from the CFO. A total boondoggle for the banks and wealthy coupon-clippers. We should first force the CFO to refinance a ton of our outstanding bond issues, at the lower interest rates now available. Next, we should force the CFO to sue the criminal banks that stuffed our balance sheet with BS derivatives deals in the (nominal amount) of hundreds of millions of dollars. (CFO won't even disclose how big the derivatives deals are that are hidden in our DC public employee and teacher pension plans.)
We can free up borrowing capacity if we just cut the umbilical cord to the effed up global banks that are feasting off our balance sheet. We should be suing JPM and BAC and GS to rescind all derivatives deals. Once we clear off those ridiculous risks and refinance old bond issues, we could issue enough general obligation bonds to pay for the entire streetcar system without privatizing anything.
11:16 am
People can bash the stadium for a number of reasons, but those who do so have to also admit it has been created a yearly surplus for the District.
The special tax set up to pay for the Stadium Bonds have produced on average more than 15 million a year more than required to service the debt. DC has seen more than 150 million in surplus stadium bond tax money since 2005, money it has been using to fill holes in the budget created by its inept leadership, some of it already going to pay for some of the 50 million already spent on the streetcar.
When was the last time a surplus was created on the servicing of bonds for an infrastucture project in DC?
11:19 am
@Roads. Nice to see that someone knows what they're talking about. I hear an endless spew of ideology about how cars and roads are inherently bad, people who drive are bad people, and it's total crap. Without cars we'd still be shoveling horsecrap in the streets and stuck in place. Without trucks, our economy would literally collapse. To everyone else on this board, grow up, have some kids and see how your views change on these issues. Mine certainly have.
11:27 am
What if this was partly a ploy to get the US government's attention? This system is frankly going to need some Federal funding if it is to get built out quickly using public funding. I thought the best way to get support to do that was to use streetcars made by a US company. Having high-profile, signature made-in-the-USA streetcars in the US capital city could only be a shot in the arm of a fledgling growth industry. Is there a "buy American" provision in the RFI, or otherwise where would Chinese investors buy vehicles from?
I'm not against foreign investment by any means, just seems like smart policy could help jump start US manufacturing in a major growth industry.