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Evolution and Financing of the Chicago Region Environmental and Transportation Efficiency Program By Jacki Murdock The University of CaliforniaLos Angeles
Evolution and Financing of the Chicago Region Environmental and Transportation Efficiency Program By Jacki Murdock The University of California-‐Los Angeles
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Table of Contents
Introduction .............................................................................................................................. 3
Current Status of Freight and Passenger Rail ................................................................ 3
Chicago Planning Group ........................................................................................................ 7
CREATE ..................................................................................................................................... 12
Cost-‐Benefit Analysis of CREATE ............................................................................................... 14
Financing CREATE .......................................................................................................................... 16
Future of CREATE and Recommendations ................................................................... 19
Conclusion ............................................................................................................................... 20
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Introduction For more than a century, Chicago has served as America’s rail hub. Beginning in
the 1850’s, trade across the nation shifted from North-South to East-West; Chicago was
thus created to serve as a nexus for goods movement between the coasts.1 The railroad’s
predominance in Chicago essentially created the city, and it has been a bulwark of the
Chicago economy every since. This paper addresses the Chicago region’s response to the
growing demand and congestion of freight rail through the Chicago Region
Environmental and Transportation Efficiency Program (CREATE). Specifically, I will
discuss the evolution of the CREATE program; the cost-benefit analysis and
recommendations for a model that allocates costs equitably; and the current funding
structure and recommendations for future financing.
Current Status of Freight and Passenger Rail
Today, six out of the seven major railroads in the U.S. run through Chicago:
Norfolk Southern (NS); CSX; BNSF Railway (BNSF); Union Pacific (UP); Canadian
Pacific (CPR) and Canadian National (CN). As the most active rail hub, Chicago
processes 37,500 freight cars a day, about a fourth of the nation’s freight and over 50% of
intermodal traffic (Map 1). 2
However, the rail infrastructure in Chicago was never built to handle this amount
of traffic. The majority of Chicago’s rail infrastructure was constructed over 100 years
ago.3 As a result, the rail congestion in Chicago is the worst in the nation, freight cars
1 Dreyfus, B. (1995). The city transformed: railroads and their influence on the growth of Chicago in the 1850s.
Harvard University. Retrieved from http://www.hcs.harvard.edu/~dreyfus/history.html 2 About create: Overview. (n.d.). Retrieved from http://www.createprogram.org/about.htm 3 The City of Chicago, Department of Transportation. (2004).Freight rail futures for the city of chicago. Retrieved
from website: http://www.edrgroup.com/pdf/ChicagoRailFreightFutures.pdf
4
often taking 24 hours to move through the City.4 According to the Federal Highway
Administration, the freight rail business is expected to grow 89% by 2035 in the Chicago
region.5
Map 1. Railroad Freight Density
Source: Untangling Chicago’s rail mess. (2012, May 07). New York Times. Retrieved from
http://www.nytimes.com/interactive/2012/05/05/us/untangling-a-rail-mess-in-chicago.html?ref=us
The City also has two major passenger rail services, Amtrak and Metra. There is
often conflict between passenger and freight rail because commuter tracks often intersect
or are shared with freight tracks. Amtrak is a government owned rail service that
facilitates travel between cities in the U.S. The majority of Amtrak’s services in the
Midwest terminate in Chicago’s Union Station, and most of their lines operate on freight-
owned tracks (Map 2).6 The congestion faced by freight railroads through Chicago also
significantly delays Amtrak schedules as well.
4 U.S. Department of Transportation, Federal Railroad Administration. (2008). System for monitoring
multiple railroad operations using an integrated track display and common data protocol. Retrieved from website: www.fra.dot.gov/downloads/research/rr0804.pdf
5 Chicago Region Environmental and Transportation Efficiency Program, (2011). Create presentation overview. Retrieved from website: http://www.createprogram.org/linked_files/2011_10_Overview_ppt.pdf
6 Midwest High Speed Rail Association. (2011). The economic impacts of high speed rail: Transforming
5
Map 2. Amtrak Routes in the Midwest
Source: Amtrak midwest train routes. (2012). Retrieved from: http://www.amtrak.com/servlet/ContentServer?c=Page&pagename=am/Layout&p=1237405732511&cid=1237437856440 Metra is Chicago’s commuter rail that serves the City’s various suburbs. The
radial nature of these commuter lines causes the commuter lines to intersect freight rail in
many locations, further increasing congestion (Map3). Passengers on Metra seldom
experience the effect of this congestion because of an agreement known as the Chicago
Protocol. This protocol dictates that during peak travel hours, the right-of-way goes to
Metra.7
Freight and passenger congestion in Chicago not only affects rail lines in the city,
but also causes significant delays for drivers in the region. There are 1,953 at-grade rail
crossing in the region, which means that vehicles often experience significant delays due
to the congestion caused by freight and passenger rail cars.8
the midwest. Retrieved from website: http://www.midwesthsr.org/sites/default/files/pdf/MHSRA_2011_Economic_Study_Brochure.pdf
7 Schwartz, J. (2012, May 07). Freight train late? blame chicago. The New York Times. Retrieved from http://www.nytimes.com/2012/05/08/us/chicago-train-congestion-slows-whole-country.html?_r=1
8 Business Leaders for Transportation, (2002). Critical cargo a regional freight action agenda. Retrieved from website: www.metroplanning.org/uploads/cms/documents/CriticalCargo.pdf
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Map 3. Metra System Map
Source: Metra, (2012). Metra system map. Retrieved from website: http://metrarail.com/content/metra/en/home/maps_schedules/metra_system_map.html
The Chicago Metropolitan Agency for Planning (CMAP), estimates that there are
10,982 hours of vehicle passenger delay per year.9 Not only does this congestion effect
Chicago’s economy and green house gas emissions but the Metropolitan Planning
Council of Chicago estimates that it costs the freight industry $1 billion a year.10 Table 1
below provides a summation of congestion in the Chicago region:
Table 1. Overview of the Gridlock
Daily Freight Cars 37,500 Average Train Speed 7-‐12 mph Average Truck Speed 10-‐15 mph At-‐Grade Rail Crossings 1,953 Intermodal Yards 26 Hours of Vehicle Passenger Delay 10,982 Est. Loss to Freight Companies $1 Billion Truck Trips Between Yards Daily 3,500 Expected Growth in Freight by 2035 89%
Source: See footnotes 4, 7,8, and 9
9 Chicago Metropolitan Area for Planning , (2010). Go to 2040. Retrieved from website:
http://www.cmap.illinois.gov/freight-system-planning 10 Metropolitan Planning Council, (2008). Moving at the speed of congestion: the true costs of traffic in the chicago
metropolitan area. Retrieved from website: http://www.metroplanning.org/uploads/cms/documents/mpcreport_movingatthespeedofscongestion.pdf
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Looking ahead, Chicago could experience significant economic repercussions if it does
not take action to improve their current infrastructure and governance of freight and
passenger rail. There are very real costs to congestion such as environmental costs due to
increased emissions, decreased job growth and losses in economic productivity. Table 2
below highlights Chicago’s congestion costs as estimated by the U.S. DOT:
Table 2. 11 Costs of Congestion
Delay and Fuel Costs $4.3 billion Loss in Productivity Costs $2.1 billion Environmental Costs $0.4 billion Cargo Delay Costs $0.2 billion Unreliability Costs $2.1 billion Safety Costs $0.5 billion Air and Rail Congestion Costs $1.4 billion Total Congestion Costs $13 billion
Chicago Planning Group In 1999, a blizzard hit Chicago that resulted in freight delays that lasted 90 days.12
This prompted the Association of American Railroads (AAR) to establish the Chicago
Planning Group (CPG). The CPG is composed of the Chief Operating Officers of the
seven Class I railroads (BNSF, CSX Transportation, Canadian National, Canadian Pacific,
Norfolk Southern, and Union Pacific), representatives from the Wisconsin Central, Belt
Railway of Chicago, Indiana Harbor Belt, and representatives from Metra and Amtrak.
The CPG commissioned a study, Report of the Infrastructure Committee to the Chicago
Planning Committee, which outlined possible solutions to the congestion that included a
11 Wells, J. U.S. Department of Transportation, (2006). How congestion in the transportation system affects chicago’s
competitive position. Retrieved from website: http://www.catsmpo.com/prog/cms/WellsPresentationChicago20061121.pdf
12 Judge, T. (2001). Fluid at last - chicago planning group develops integrated transportation plan for chicago gateway. Railway Age, 202(6), Retrieved from http://144.171.11.39/view.aspx?id=685659
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list of problematic at-grade rail crossings and rail infrastructure upgrades.13 14 Previous to
the CPG’s founding, there had been no coordination between any of the rail lines. No
doubt, this lack of coordination between the railroads lead to a socially sub-optimal
situation, where each company was aiming to maximize their own private utility while
decreasing overall efficiency.
The CPG’s objective was to find ways to identify where there are bottlenecks in
Chicago and provide recommendations on how eradicate those bottlenecks. They
established a “service design group”, where each member’s transportation plan was
analyzed to establish where conflict was occurring on each rail corridor.15 The plans
where integrated and congestion was reduced by rerouting 1,000 rail cars from the
Chicago Gateway.16 They also recommended four infrastructure improvement areas, and
identified 50 at-grade crossings to be removed through grade separations.17 The four
improvement areas are:18
1. The signal system
2. Expanding tracks and the capacity for connection
3. On important intersections, remove conflict between freight and passenger rail
4. Separate the most impacted at-grade rail crossings
13 Transportation Research Board, Cambridge Systems Inc. (n.d.). Funding options for freight transportation projects
of national significance case studies of freight finance options. Retrieved from website: http://www.dot.ca.gov/hq/tpp/offices/ogm/key_reports_files/Financing_Freight/Cambridge_systematics_Case_studies_freight_finance.pdf
14 Chicago Planning Group, (2009). Report of the infrastructure committee to the chicago planning committee 15 Judge, T. (2001). Fluid at last. 16 Judge, T. (2001). Fluid at last. 17 CREATE, (2012). Evolution of the create program. Retrieved from website:
http://www.createprogram.org/tiger2_files/EvolutionCREATEProgramx.pdf 18 CREATE, (2012). Evolution of the create program.
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Previously, there had been minor upgrades to infrastructure paid for by the individual
railroads that amounted to $750 million over a three-year period.19 Nevertheless, one rail
line’s efforts to improve infrastructure without a coordinated effort would not noticeably
decrease congestion. Thus, this first systematic collaboration on behalf of the railroads to
coordinate efforts and identify needs is a milestone for the future of freight in Chicago.
Chicago Transportation Coordination Office
While the CPG focused on the implementation of their suggestions to reroute rail
cars and complete the overview of infrastructure improvements, a separate organization
was needed to look at systematic improvements. In 2000, the CPG created the Chicago
Transportation Coordination Office (CTCO). Their initial charge was to look at non-
infrastructure (i.e. managerial and systematic) solutions to the gridlock and to work with
public agencies to raise capital.20 CTCO is again composed of representatives from
BNSF, CSX Transportation, Canadian National, Canadian Pacific, Norfolk Southern, and
Union Pacific, Metra, and the Belt Railway of Chicago.21
One accomplishment of the CTCO is their winter preparedness plan known as the
Chicago Terminal Alert Plan.22 Chicago frequently experiences large winter storms that
can back up freight traffic for months. This plan sets out the steps each railroad will take
in order to prepare the rail network for an upcoming storm to lower recovery time. There
are three levels of action that could be taken based on the severity of the storm. In Level
1, the railroads implement their own operating plan; Level 2 requires more 19 Business Leaders for Transportation, (2002). Critical cargo a regional freight action agenda 20 CREATE, (2012). Evolution of the create program 21 Hamilton, L., Allen, C., & Marros, R. American Association of Port Authorities, (n.d.). Improving the chicago rail
gateway . Retrieved from website: http://aapa.files.cms-plus.com/SeminarPresentations.pdf 22 Hamilton, L., Allen, C., & Marros, R. American Association of Port Authorities, (n.d.). Improving the chicago rail
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communication between the railroads where phone conferences are set up throughout the
day and possibly holding trains outside of Chicago; when a storm warrants a Level 3,
20% of freight is rerouted from Chicago.23
In order to understand how to better move nine rail lines through Chicago, the
CTCO created a computer simulation model in 2002. It modeled 1800 Freight trains,
1,114 passenger trains, 61 freight yards, 4,698 control points and 119 interlocking
plants.24 Essentially, this simulation gave a snapshot of what traffic flows looked like
over 893 miles of tracks over a period of four days.25 Not only did this provide an
overview of where congestion was happening and what may be causing it, it afforded a
more targeted view of where infrastructure improvements were needed. This computer
simulation provided a rational for the need of capital improvements as it demonstrated
that Chicago could not accommodate new growth in freight and passenger traffic without
infrastructure improvements.26 The model also revealed that Chicago’s commuter rail
service significantly contributed to delays in the freight network:
During the morning and evening rush hours, the model showed how not only freight service on lines with commuter service but also freight trains that had to cross or interchange traffic with other freight lines came to a crawl. In real life, when there was an operating problem with track or train crews, the commuter trains were delayed by such freight occurrences.27
23 Hamilton, L., Allen, C., & Marros, R. American Association of Port Authorities, (n.d.). Improving the chicago rail
gateway 24 Hamilton, L., Allen, C., & Marros, R. American Association of Port Authorities, (n.d.). Improving the chicago rail
gateway 25 Business Leaders for Transportation, (2002). Critical cargo a regional freight action agenda 26 CREATE, (2012). Evolution of the create program . 27 Association of American Railroads, et. al, (2005). Chicago region environmental and transportation efficiency
program. p. 14. Retrieved from website: http://www.arema.org/files/library/2005_Conference_Proceedings/00009.pdf
11
Since the computer simulation, CTCO has made enormous strides in managing traffic
flows. They have now developed one of the most advanced computer programs, which
allows each railroad to see real-time freight traffic. Every railroad now shares the location
of their rail cars and their data is gathered onto one website that all railroads now use to
manage their schedules.28 The website, known as the Common Operational Picture
(COP), displays all of the incoming freight traffic on each line and where delays are
occurring. Dispatchers are instantaneously able to coordinate a train crossing over
another company’s tracks via this website. Previous to the creation of this site, railroads
would:
…monitor their own right-of-way from computer screens that display only the points where other railroads’ tracks cross, with little or no advance notice about approaching trains. This information is communicated “manually” (human to human), leaving what is, at best, a fragmented view of traffic flow across regions where multiple railroads converge.29
This previous system obviously lead to increased congestion due to the lack of
coordinated efforts. Thus, the CTCO’s leadership provides an overarching system to
share freight movements, dramatically increasing the ability for railroads to plan ahead
for potential chokepoints and instantaneously gain permission to move trains across rail
crossings. This has translated into tangible time savings for the industry. As a result of
coordination, dwell time has decreased from 41 hours to 27 hours at large facilities and
the time it takes to move freight crosstown has decreased from 45 hours to 32. Metra
delays caused by freight rail have also decreased 50% due to their efforts (Table 3).30
28 U.S. Department of Transportation, Federal Railroad Administration. (2008). System for monitoring multiple
railroad operations using an integrated track display and common data protocol. Retrieved from website: http://www.fra.dot.gov/downloads/research/rr0804.pdf
29 U.S. Department of Transportation, Federal Railroad Administration. (2008). System for monitoring, p.2 30 Judge, T. (2001). Fluid at last
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Table 3. Results of Coordination
Before CTCO After Coordination Dwell Time 41 hours 27 hours Crosstown Throughput 45 hours 32 hours Freight Related Metra Delays 30% 14%
CREATE , Chicago’s railroads were able to achieve significant improvements in
performance simply through increased communication and coordinated efforts. However,
there was still concern that in order to achieve the necessary time savings given the
expected growth in freight, infrastructure improvements were required. Other cities such
as Kansas City, which is the second largest rail hub in the nation, were pursuing
infrastructure upgrades to their rail lines that could cause companies to reroute their trains
from Chicago entirely.31
The investment required to significantly improve the existing infrastructure would
not only benefit the railroads but also the City of Chicago, the State of Illinois and the
U.S. economy. A public-private partnership was necessary in order to leverage funds for
vast infrastructure improvements and distribute the financial responsibility according to
the benefits received. Mayor Richard Daley requested the federal Surface Transportation
Board and the Freight Transportation Working Group to investigate possible solutions to
the infrastructure issues facing the Chicago region.32 In 2003, after a series of meetings
and working groups, the solution came in the form of a new public-private partnership:
the Chicago Region Environmental and Transportation Efficiency Program (CREATE).
31 Mid-America Regional Council and Kansas City Smart Port, (2009). Regional freight assessment: comparative
analysis. Retrieved from website: http://www.marc.org/transportation/pdf/freightoutlook/KCRFO_RegionalFreightAssessment.pdf
32 About create: Overview. (n.d.)
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CREATE is a partnership between the freight railroads (BNSF, CSX
Transportation, Canadian National, Canadian Pacific, Norfolk Southern, and Union
Pacific), the Belt Railway of Chicago, the Indiana Harbor Belt Railroad, Metra, Amtrak,
the U.S. Department of Transportation, the Illinois Department of Transportation, the
City of Chicago and the Association of American Railroads. CREATE also had
tremendous support in the House of Representatives from Representative William
Lipinski. Representative Lipinski’s district was severely impacted by freight traffic
because there were numerous at-grade rail crossings.33
Their aim is twofold: decrease vehicle congestion caused by freight rail through
grade separations along busy corridors; and improve vital corridors and increase route
capacity.34 These goals will be met through completing 71 infrastructure improvement
projects concentrated around four freight corridors and one passenger rail corridor.
Projects were chosen based upon a combination of results from the CPG’s previously
mentioned study outlining problematic at-grade crossings, the CTCO’s computer
simulation model, and a three day meeting convened by the railroads to proposed
potential projects. 35
The projects include 25 overpasses or underpasses, six flyovers and 36 projects
focused on upgrading the tracks, signalization and control switches.36 To date, only 14
33 Association of American Railroads, et. al, (2005). Chicago region environmental and transportation efficiency
program. 34 American Association of State Highway and Transportation Officials (AASHTO), (2005). Return on investment on
freight rail capacity improvement. Retrieved from website: http://www.transportation.org/sites/planning/docs/nchrp43.pdf
35 Association of American Railroads, et. al, (2005). Chicago region environmental and transportation efficiency program.
36 About create: Overview. (n.d.)
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out of the 71 projects have been completed, 12 are in Phase III construction, four in Phase
II final design, 15 in Phase I environmental review, and 25 are awaiting funding (Table
5).37
Table 5. Progress of CREATE
Overpasses or Underpasses 25 Flyovers 6 Track Upgrades 36 In Construction Phase 12 In Final Design Phase 4 In Environmental Review Phase 15 Awaiting Funding 25 Completed Projects 14
Cost-‐Benefit Analysis of CREATE The project attempts to achieve many goals and the various partners represented
in CREATE will also receive varying degrees of benefits as a result of the improved
infrastructure. CREATE partners conducted a benefits analysis based on an Input-Output
methodology, known as the Regional Economic Model Inc. (REMI), formed by the
Bureau of Economic Analysis and published the Freight Rail Futures for the City of
Chicago. The model measured the regional economic impacts of improved infrastructure
by assessing:38
1. Alternatives to infrastructure improvements.
2. How the infrastructure projects and each alternative will affect the
economic climate through changes in supply and demand.
37 CREATE, (2012). Status of create projects. Retrieved from website:
http://www.createprogram.org/linked_files/status_map.pdf 38 The City of Chicago, Department of Transportation. (2004).Freight rail futures for the city of chicago.
15
3. The economic benefit to relevant industrial sectors and the regional
economy based on the changes in supply/demand and an economic
forecast.
In order to analyze the effects of each scenario, the study looked at four areas that would
be affected: job generation, Gross Regional Product (GRP), income, and regional sales.
The CREATE scenario (labeled rationalization in the model) ranked the highest for each
variable measured. Table 6 displays the impacts of the CREATE infrastructure
improvements according to the model in 2002, 2012, and 2020:
Table 6. 39 40 Benefits of CREATE Scenario
2002 2012 2020 Job Generation 189 1,694 19,740 GRP $0 billion $0.2 billion $2.8 billion Acres of Rail Yards Redeveloped 0 acres 320 acres 400 acres At-‐Grade Crossings Removed 0 25 25 Daily Freight Cars 37,500 -‐ 67,000 Safety and Delay Decreases $0 -‐ $500 million
Other, non-quantified benefits include reducing air pollution, increased efficiency,
increased highway capacity, and economic stimulus from redeveloping abandoned rail
yards.41
Under the cost-‐benefit analysis performed by the CREATE program, the
benefits and costs were aggregated and only indicated whether or not the project
should proceed. However:
…freight projects often benefit and impose costs on different governmental bodies at 39Association of American Railroads, et. al, (2005). Chicago region environmental and transportation efficiency
program. 40 American Association of State Highway and Transportation Officials (AASHTO), (2005). Return on investment 41 Association of American Railroads, et. al, (2005). Chicago region environmental and transportation efficiency
program.
16
the same time, and aggregate benefits and costs do not address the concerns of the different stakeholders.42
Hence, the CREATE partners need to complete a cost-benefit analysis that divides costs
and benefits equitably amongst its partners according to the benefits received.
Financing CREATE A project of this scale requires enormous levels of funding. Initial estimates
placed costs at $1.5 billion, but as construction costs have increased the total estimated
cost is now at $3.2 billion.43 The railroads had made investments of $750 million over a
three-year period in rail infrastructure to maintain a reasonable level of service.44
However, the benefits of further improvements in infrastructure and the costs required to
achieve these benefits must be distributed amongst the partners of CREATE according to
the benefits received. For example, the City of Chicago will undoubtedly receive a higher
rate of job growth and economic investment as a result of investment in CREATE
projects. Consequently, the City should finance a portion of the project that is
commensurate with these benefits.
Much of the dialogue around financing CREATE supports the idea that the
federal government should fund a major portion of the project because of the significance
of freight movement on the national economy. 45 The rational behind this financial plan is
that our national transportation system moves goods worth $36 billion dollars daily (in
2002 dollars) which serves millions of households and businesses.46 The costs of the
42 Rosenbloom, Sandra and Martin Wachs. (2012). A federal role in freight planning and finance. Santa Monica, CA:
RAND Corporation. http://www.rand.org/pubs/monographs/MG1137. 43 Schwartz, J. (2012, May 07). Freight train late? blame chicago. The New York Times. Retrieved from
http://www.nytimes.com/2012/05/08/us/chicago-train-congestion-slows-whole-country.html?pagewanted=all 44 Business Leaders for Transportation, (2002). Critical cargo 45 Chicago Metropolitan Area for Planning, (2010). Go to 2040. 46 Federal Highway Administration, Freight Management and Operations. (2007) Freight Analysis Framework.
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transshipment process are largely felt locally through congestion, degradation of the
environment, etc. Thus, these figures indicate that:
…moving freight is a national, interstate commerce issue and the U.S. economy depends on the efficient movement of freight. Freight movement requires an interconnected system throughout our nation …this is very much a problem that transcends geographical boundaries. It is inefficient to solve only part of the problem…only to encounter a bottleneck here in the Chicago region. To address these problems the federal government needs to develop a vision, a plan, and funding to address freight movements across the nation. (emphasis added)47
However, historically the federal government has not played a large role in funding
freight infrastructure, leaving the private sector to fund and finance rail projects
(Table 7). 48
What little funding has been made available has come from the various
highway bills. There is agreement among industry groups and transportation
officials that the federal government should have a role in financing freight projects,
however the extent of that involvement and the types of projects funded are heavily
debated.49
Table 7. 50
2004 Funding for Freight Infrastructure (Billions) Federal State and Local Private Highway 30.2 36.5 -‐ Freight Railroads 0 0 6.4 Aviation 5.6 6.8 2 Ports, Harbors and Inland Waterways 0.7 1.7 1
Retrieved from website: http://ops.fhwa.dot.gov/freight/freight_analysis/faf/index.htm
47 Chicago Metropolitan Area for Planning, (2010). Go to 2040. p.313 48 Business Leaders for Transportation, (2002). Critical cargo 49 Rosenbloom, Sandra and Martin Wachs. (2012). A federal role in freight 50 Transportation Research Board, (2009). funding options for freight transportation projects. Retrieved from website:
http://onlinepubs.trb.org/onlinepubs/sr/sr297.pdf
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The freight projects that receive funding out of the highway bills are those
that are designated as a “Project of National and Regional Significance.” The Senate
created this designation in recognition of freights’ usage of the interstate highway
system.51 CREATE received the designation of a “Project of National and Regional
Significance” (PNRS) in 2005 but the U.S. DOT has suggested it may not warrant this
title:
The Department [U.S. DOT] believes . . . that a number of these projects may not reflect projects that are truly of National and Regional Significance, but in fact are projects which reflect local interests, and would have been more appropriately funded from other categorically specific funds...52 Since CREATE was designated a PNRS, it was made eligible for Senate funds
in the Safe Affordable Flexible Efficient Transportation Equity Act: A Legacy for
Users (SAFETEA-‐LU) highway bill. Originally, CREATE partners where lobbying for
$900 million in SAFETEA-‐LU dollars. SAFETEA-‐LU set aside $1.7 billion for the PNRS
program but every dollar of it was earmarked, which significantly decreased the
funding available for CREATE.53 Thus, $900 million was then cut down to $200
million and after the project’s champion, Representative William Lipinski, retired
from Congress the final funds received was $86 million.54 CREATE received a further
$100 million of federal funds in 2010 from the U.S. DOT as a part of the TIGER
(Transportation Investment Generating Economic Recovery) program, a
51 Rosenbloom, Sandra and Martin Wachs. (2012) A federal role in freight 52 USDOT. (2007). Projects of National and Regional Significance 2007 Report to Congress. Retrieved from
website: http://ops.fhwa.dot.gov/freight/policy/rpt_congress/2007_pnrs_rpt_congr.htm 53 Wells, J. U.S. Department of Transportation, Bureau of Transportation Statistics. (2009). The importance of
transportation forecasting. Retrieved from website: http://www.bts.gov/programs/trending_and_forecasting/workshop_for_transportation_forecasters/importance_of_transportation_forecasting/html/index.html
54 Bonney, J. (2009). Untangling the chicago knot. Journal of Commerce, Retrieved from http://www.createprogram.org/in_news/4-20-2009.pdfo
19
discretionary program under the American Recovery and Reinvestment Act
(ARRA).55
The railroads were scheduled to contribute $212 million to CREATE when
the project was expected to cost $1.5 billion. At that time, the Chicago DOT deemed
this an appropriate funding level given the expected economic benefits that will
accrue to the railroads.56 In the end, the railroads only contributed $100 million
dollars to a project that is now expected to cost $3.2 billion. The City of Chicago has
contributed $30 million, and the State of Illinois will contribute $100 million (Table
8). 57
Table 8. Current Status of CREATE Funding
Railroads $100 Million State of Illinois $100 Million City of Chicago $30 Million
Federal Dollars SAFETEA-‐LU $86 Million TIGER $100 Million Total $416 Million Remaining 2.784 Billion
Future of CREATE and Recommendations It seems that the financial plan of the CREATE Program is to rely on further
funds from the federal government. The Chicago Metropolitan Agency for
Planning’s long term plan for the region, a document known as GO TO 2040,
suggests that “Because the CREATE program is of national significance, GO TO 2040
55 CREATE, (2010). Governor quinn announces create program award of $100 million in recovery funds. Retrieved
from website: http://www.createprogram.org/press_releases/feb17-2010.pdf 56 American Association of State Highway and Transportation Officials (AASHTO), (2005). Return on investment 57 CREATE, (2010). Governor quinn announces create program award
20
recommends that the federal government take a central role in funding it.”58 However,
without an established authority that oversees the CREATE project, it will be
difficult to manage and leverage additional funds. There have been
recommendations that a “Regional Freight Authority” should be established in order
to better oversee the financing of CREATE. 59 This entity would then be eligible to
apply a container tax on railroads, which they could leverage to for federal monies.
The best case example for establishing a public entity that oversees a freight
corridor is the Alameda Corridor Transportation Authority (ACTA). The Alameda
corridor is a 20-‐mile corridor that connects to the port of Los Angeles and Long
Beach. ACTA established a user fee and a charge per container that ranges from
$5.17 to $21.60 per Twenty for Equivalent Unit (TEU).60 ACTA then used the monies
raised, around $82 million, to secure Transportation Infrastructure Finance and
Innovation Act (TIFIA) loans from the federal government.61
CREATE should therefore establish a public entity, institute a user and
container fee, and leverage those funds to apply for federal TIFIA loans. CREATE
partners may also consider undertaking a new benefits costs analysis in which the
benefits and costs are allocated equitably to each partner.
Conclusion Chicago remains the nation’s busiest rail hub. Aging rail infrastructure and
congestion combined with enormous expected growth in freight activity has
58 Chicago Metropolitan Area for Planning, (2010). Go to 2040. p.314 59 Chicago Metropolitan Area for Planning, (2010). Go to 2040 60 Alameda Corridor Transportation Authority. (2012).Schedule of user fees and container charges. Retrieved from
website: http://www.acta.org/gen/charge_per_teu_2012.pdf 61 Transportation Research Board, Cambridge Systems Inc. (n.d.). Funding options for freight
21
prompted an unprecedented effort on the part of Chicago and its railroads to find a
way to upgrade the infrastructure. Should Chicago fail to make these necessary
improvements, they will fail to capture all of the economic benefits associated with
this growth in freight as it will only increase congestion in the region and divert
freight traffic elsewhere.
The formation of the CPG and CTCO marks the first attempt for railroads in
Chicago to collaborate to reduce traffic delays and improve service. Their efforts
have been tremendously successful, decreasing dwell time by 52%, decreasing the
time it takes freight cars to go through Chicago by 40%, and reducing freight-‐related
commuter delays by 50%.
CREATE’s public-‐private partnership, while a landmark effort in cooperation
among a diverse set of stakeholders, has failed to secure adequate funding to deliver
many of its promised benefits. While they heavily rely on hopes for future federal
funding to complete the remaining projects, they have not taken steps to establish a
public entity that can oversee and leverage such funds. Furthermore, CREATE
should leverage its own funds through user fees and container fees that they may
then use to match federal dollars. This would better reflect the benefits and costs
that will accrue to the stakeholders within CREATE and not place an undue financial
burden on the federal government. Costs of congestion are born locally while freight
benefits the national economy, improvements in Chicago’s freight infrastructure will
benefit the region’s stakeholders in a more significant way then their current
funding levels reflect.
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