Public Private Partnerships

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Public / Private Partnerships

• A Railroads Perspective

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Union Pacific Railroad
Seattle
Eastport
Tacoma
Portland
Duluth
Silver Bow
Twin Cities
Powder River Basin
Milwaukee
Chicago
Omaha
SLC
Oakland
Sacramento
Denver
KC
St. Louis
Las Vegas
Memphis
Phoenix
Los Angeles
Dallas
Tucson
Fort Worth
Calexico
San Antonio
Baton Rouge
Nogales
El Paso
New Orleans
Houston
Eagle Pass
Corpus Christi
Laredo
Brownsville
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Union Pacific Fast Facts in the U.S.

• Miles of Track 33,586.3
• Employees 48,000
• Annual Payroll 2.7 billion
• Purchases Made 2.9 billion
• Locomotives 6,921
• Freight Cars 53,272
• Freight Revenue 10.7 Billion

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2002 Business Mix
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Public/Private Partnerships

• Path to Earning Cost of Capital Not Through
  Public Funding
• Projects Must Have a Clearly Defined Direct
  Public Benefit
• Outcome Must Be a Clear Win-Win

Note WIN means gaining something
of REAL VALUE.
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Private Enterprise Stakeholders

• Shareholders
• Customers
• Employees
• Public

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The Public Interest

• Environmentally Friendly
• Freight Traffic Off Highways
• 1.2 Billion in Taxes
• Employment, Purchases, Foundation

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U.S. Railroad Performance 1964-2000
Class I (Index 1981 100)
Productivity
Staggers Act Passed October 1980
Volume
Revenue
Price
Source AAR
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Critical ResourcesNorth American Railroad
Industry

• Physical Plant
• Employees
• Locomotives
• Freight Cars
• Honorable Mention - Fuel

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Industry Infrastructure Usage
Thousand Revenue Ton Miles / Miles of Road
Revenue Ton Miles (Billions)
Revenue Ton Miles
Revenue Ton Miles / Miles of Road
Source AAR
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Concerns with Public Investment

• Passenger Operations Consume Scarce Capacity
  Without a Fair Return to Shareholders
• Strings Attached
• Blurred Ownership
• Open Access / Reregulation
• Trust Funds
• Skew the Economic Playing Field

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Highway Diesel Fuel Tax
24.4
20.1
15
9
4
3
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Concerns with Public Investment

• Passenger Operations Consume Scarce Capacity
  Without a Fair Return to Shareholders
• Strings Attached
• Blurred Ownership
• Open Access / Reregulation
• Trust Funds
• Skew the Economic Playing Field

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Win - Win Partnerships

• A Railroads Perspective
• Enhance Goods Movement
• Offset Impact on Capacity
• Fair Return to Shareholders

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Public Partnership Guidelines

• Clear, Identifiable, Direct Public Benefit
• Willingness to Invest
• Willingness to Provide Ongoing Return
• No Strings Attached

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Examples

• Upgrades to Accommodate Passenger Initiatives
• Line or Terminal Relocations to Meet Community
  Needs
• Projects Which Meet Public Safety or Security
  Objectives
• Focused Development Initiatives Like the Alameda
  Corridor
• Tax Exempt Financing for Projects Available to
  Any Corporate Citizen

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Specific Examples

• METRA
• Salt Lake City
• Alameda Corridor
• KC Flyover

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Public Private Agency Railroad WIN WIN
Note WIN means gaining something
of REAL VALUE.
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