MatchBank September 2010

Concept

• AAR saw concept in late July

• Allows freight railroads to “bank” their “match” funding for multiple and future corridor improvements

• Voluntary mechanism to allow railroads to get financial credit for underutilized and non-performing assets

Concept (cont.’d)

• Facilitate cost sharing for corridor improvements

• Facilitate improvements to national rail network

• Preservation of key railroad alignments

Benefits/Opportunities

• Mutual benefits

– Railroads want to put the asset into MatchBank– Federal government want to bank the ROW

• Improve opportunities for viable intercity passenger rail services

• Supports the vital role of freight railroads in the national economy

Examples

• CSX “S” Line in North Carolina and Virginia

– Shortest rail connection between Richmond and Raleigh

– Today, half the line is unused; the other half only sees local service

• BNSF Raton Pass Line

– Fewer and fewer through trains on this line

– Likely an HSR routing for service between Denver and Albuquerque/Phoenix

Regulations

• Current guidance that may already cover implementation

– OMB Circular A-87: Cost Principles – OMB Circular A-102: Grants and Cooperative

Agreements– OMB Circular A-110: Uniform Administrative

Requirements for Grants and Agreements

• Additional clarifying legislation?

Challenges

• Valuation

– Current capital value and inflation/deflation protection

• Ownership

– Public Lands Trust– Surface Transportation Board– Other?

Challenges (cont.’d)

• Preserve Competitive Positions

– No sales or operating agreements with competitors

• Funding

– Need to establish value to the federal government to enabling such alternatives.

Next Steps

1.) Discuss with Railroads

2.) Discuss with States

3.) Discuss with FRA

4.) Refine Concept

Thank you

Discussion