Case Study of Benefit–Cost Analysis of an Intercity Passenger Rail Service

Abstract

The economic assessment of transportation projects is evolving from a reliance on user benefits (travel time, cost, or safety) to encompass a wider spectrum of potential benefits, fostered by advances in economics and recognition that different project modes deliver different portfolios of benefits. Sponsors develop projects to address specific problems in their communities. This progression in how investments are evaluated opens the door for projects whose outcomes span a variety of benefit categories rather than concentrating on traditional user benefits and permits an improved intermodal comparison of candidate investments. Transit and intercity rail projects are particular beneficiaries of the broader project assessment approach. This paper presents a case study of how a comprehensive approach to project assessment was applied to the Northern Lights Express project that would reintroduce passenger rail service between the cities of Minneapolis and Duluth, Minnesota, the state's largest economies. Owned and operated by BNSF Railway, Amtrak's service in the corridor ended in 1985. Six stations are planned: Target Field in Minneapolis; stations in Coon Rapids, Cambridge, and Hinckley, Minnesota; a station in Superior, Wisconsin; and Union Depot in Duluth. The goal for the analysis was threefold: ( a) to confirm that the investment would yield a positive return; ( b) to communicate with partners, stakeholders, and the public about the project's expected outcomes; and ( c) to contribute to the selection of an alternative. The benefit–cost ratio was estimated for eight alternatives that varied by physical alignment and service plan.