Overcoming
Uncertainty and Controlling Risk in Planning a New Commuter Rail
Service
– Presented at the Joint Rail Conference, April 2010, in Urbana,
IL
Commuter rail continues to grow in popularity as
a tool to address traffic congestion and spur economic development
in the United States. Because of the time required to progress through
the Federal Transit Administration's New Starts planning and funding
process (6-12 years), as well as competition between projects for
limited funds, a recent trend has been for state and local governmental
entities to explore other options for initiating commuter rail service.
A fundamental goal of planning any public transportation
service is finding the most effective way to meet a defined transportation
need. Key objectives in planning include identifying areas where
information is uncertain and evaluating the risks involved in acting
on that uncertain information. Investing in commuter rail service
is inherently risky because of costly capital investments that are
difficult to recover if service fails. A successful planning process
will accurately assess potential demand and result in investment
decisions that effectively meet that demand while working within
project budget constraints. Decisions that maximize results and
minimize risks can be made by examining each alternative course
of action in terms of results for capital investment needs, projected
operating costs, and demand expectations.
This paper presents a strategy for identifying
and resolving uncertainty and risk in the planning process by developing
scenarios to assess alternative decisions and evaluate outcomes
in terms of costs, resource commitments, bottlenecks, and meeting
uncertain demand projections. This method was developed and applied
by the author while planning a commuter rail service proposed to
be developed and operated with state and local funds in Southeastern
Michigan.
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