DRAFT

Public Benefit of Investment

in the

San Diego & Arizona Eastern Railroad

San Diego & Imperial Valley Railroad Yard Improvements

Rail Yard Expansion Public Benefit from Marginal Cost Avoidance

The public benefit of expanding & re-locating the existing SDIV rail yards is based on avoidance of marginal highway costs. These costs are from the impact of each additional truck upon San DiegoCounty freeways on pavement, congestion, environment, and accidents.

The 20043base year carload traffic is as follows is 7500 carloads. Maximum yard capacity is approximately 8000 carloads per year

Each carload generates the equivalent of 3.3 loaded truck trips. Since these commodities use unique equipment, the possibility of a backhaul load are nil, and the empty backhaul is also attributed to a carload for another 3.3 trips.

The marginal costs are calculated by multiplying a cost factor per mile for each truck trip, based on truck weight, and urban/rural freeway designation. The lighter weights were used to calculate the empty backhaul. The diverted truck traffic would use a mix of I-5/I-8/I-15. A weighted factor of mileage and urban/rural designation was used for these commodities. The calculations are spit on the spreadsheet.

The results are calculated with growth rates from 1% to 5%, and a Government discount rate from 7% to 10%. The results are based on a 3% growth rate and 7% Government discount rate. This gives a net present value of the public benefits from avoided marginal costs of $3,400,000.

The rail yards compete for public funds based on overall costs, and the public benefit/cost ratio of competing projects. For example, a project with a 2:1 payback with a $1,500,000 investment and $3,000,000 return is less desirable the providing $1,500,000 for the Desert Line which would return $3,400,000, a payback of 2.2:1.

Marginal Cost Calculations

From 2000 FHWA update to the 1997 Highway Cost Allocation Study.

Table 13. 2000 Pavement, Congestion, Crash, Air Pollution, and Noise Costs for Illustrative Vehicles Under Specific Conditions
Vehicle Class/Highway Class / Cents per Mile
Pavement / Congestion / Crash / Air Pollution / Noise / Total
Autos/Rural Interstate / 0 / 0.78 / 0.98 / 1.14 / 0.01 / 2.91
Autos/Urban Interstate / 0.1 / 7.70 / 1.19 / 1.33 / 0.09 / 10.41
40 kip 4-axle S.U. Truck/Rural Interstate / 1.0 / 2.45 / 0.47 / 3.85 / 0.09 / 7.86
40 kip 4-axle S.U. Truck/Urban Interstate / 3.1 / 24.48 / 0.86 / 4.49 / 1.50 / 34.43
60 kip 4-axle S.U. Truck/Rural Interstate / 5.6 / 3.27 / 0.47 / 3.85 / 0.11 / 13.3
60 kip 4-axle S.U. Truck/Urban Interstate / 18.1 / 32.64 / 0.86 / 4.49 / 1.68 / 57.77
60 kip 5-axle Comb/Rural Interstate / 3.3 / 1.88 / 0.88 / 3.85 / 0.17 / 10.08
60 kip 5-axle Comb/Urban Interstate / 10.5 / 18.39 / 1.15 / 4.49 / 2.75 / 37.28
80 kip 5-axle Comb/Rural Interstate / 12.7 / 2.23 / 0.88 / 3.85 / 0.19 / 19.85
80 kip 5-axle Comb/Urban Interstate / 40.9 / 20.06 / 1.15 / 4.49 / 3.04 / 69.64
NOTE: S.U. = Single Unit, Comb. = Combination; Air pollution costs are averages of costs of travel on all rural and urban highway classes, not just Interstate. Available data do not allow differences in air pollution costs for heavy truck classes to be distinguished.

The average truck in San Diego will have a 54 mile urban trip and a 20 mile rural trip. Baseline calculation for the study will be 3.3 truckloads per carload, plus the backhaul. I considered the loaded trucks at 80k and the empty at 50 k.

Weighted travel distances are 46.6 miles urban and 19.2 miles rural in SD County

So for one carload diverted to highway marginal costs are:

(truckloads x distance in miles x marginal cost in cents)

Urban + Rural

Loaded: (3.3 x 46.6 x 69.64) + (3.3 x 19.2 x 19.85)

Backhaul: (3.3 x 46.6 x 37.28) + (3.3 x 19.2 x 10.08)

Total cost marginal cost per diverted carload in San DiegoCounty: $183.40

Assuming 3% freight rail traffic growth.

Total marginal costs from 2004 thru 2023: $ 8.8 Million

Total marginal costs, considering 7% annual discount rate: $3.4 Million

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