1. Amer ican Association of State Highway Transportation Officials Standing Committee on Rail Transportation 2010 National Meeting September 20, 2010 Karen J. Hedlund Chief Counsel Federal Railroad Administration

2.  Federal infrastructure bank  Federal and state grants and loans  Contribution of ROW  Sale of equity  Municipal tax bonds  Foreign investment  Buy America 2

3. 3 Collis P. Huntington, the hardware storekeeper-turned-empire builder for the Central Pacific, late 1860s. (The Huntington Library: HEH 61/1/2/13) Leland Stanford, one-term California governor and titular head of the Central Pacific, late 1860s. (California State Library: 8527)

4.  Mostly highways and tollroads CA – SR 91, San Diego Expressway, Doyle Drive TX – I -35, 161, 635 VA – Greenway and Pocahontas FL – Miami Port Tunnel and I-595  PPPs not “privatization” Chicago Skyway Indiana Tollroad Northwest Parkway 4

5.  Ridership and revenue hard to predict New market Competition from air and highways Network connectivity issues  Potential for long-term operating losses Vs. “Ramp up” period for new toll roads  Technology risk 5

6.  Role of freight and other ROW owners  Includes systems, equipment and operations  Major operator role re specifications  Multi-jurisdictional funding and governance  Liability  Safety – federal design standards and regulations 6

7.  Hudson-Bergen DBOM  Las Vegas Monorail  Denver Eagle P3 – in procurement  LA Metro Extension – in planning  Oakland Airport Connector – in re-procurement 7

8.  PPP investment - $10 – 25 billion (25% total)  Base revenue guarantee  Vendor financing – equipment leases  DB for construction risk transfer  Possibly DBOM (design-build-operate- maintain 8

9.  Critical factors Risk transfer Public funding commitments Public policy mandate Clear P3 authority No ROW, environmental risk  Ridership risk Unique nature of project Lack of comparable models Could assume more after projections proven up 9

10. “Availability payment” financings ◦ Port of Miami Tunnel ◦ Fort Lauderdale I-595 managed lanes 10

11.  Public owner sets and retains fares  Some progress payments during construction and annual payments for term of agreement  Annual payments based on performance ◦ Number of trains ◦ Headways, OTB ◦ Quality – cleanliness, customer service ◦ Safety  Public obligor must be credit-worthy 11

12. Tampa – Orlando High Speed Rail 12