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Date: Sept. 1, 1998
Contacts: Craig Hicks, Media Relations Officer
Jennifer Cooke, Media Relations Specialist
(202) 334-2138; e-mail <news@nas.edu>


[ EMBARGOED: NOT FOR PUBLIC RELEASE BEFORE 5 P.M. EDT TUESDAY, SEPT. 1 ]


Publication Announcement

Clearer Criteria Needed to Support Government
Involvement in Port and Freight Terminal Projects

Freight transportation is critical for nearly every item and service that U.S. consumers purchase. Movement of goods transferred between truck and rail, or rail and water -- known as "intermodal" freight transportation -- plays a growing role in the nation's freight sector. Because intermodal freight competes with traditional "single-mode" freight, the intermodal option has spurred efficiency in a large segment of the freight industry overall. The growth of intermodal freight has helped to control the costs of operating highways and to reduce pollution, and has stimulated employment in some local areas.

State and local governments have become increasingly aware of the importance of freight transfer facilities such as seaports, airports, and barge, truck, and rail terminals for the efficient functioning of the transportation system and for regional economic development. But projects to build and improve access to these facilities pose special challenges. Successful projects require partnerships among governments and the private sector that can involve complex, often innovative financing arrangements such as tolls, special taxes, and bonds.

A new report from the National Research Council's Transportation Research Board recommends guidelines to help governments evaluate proposals for public investment in freight facility projects and to select financing arrangements. The report also examines government policies beyond infrastructure investment that affect freight efficiency, including regulations and operating practices for public roads, ports, and waterways.

To warrant government participation, the report says, a proposed freight infrastructure project first must make sense economically -- that is, have benefits that exceed its costs -- and also must meet one or more of the following conditions:

> Reduce the external costs of transportation, such as pollution and traffic congestion, that are in addition to those borne directly by shippers and carriers

> Yield economic development benefits beyond those to users of the facility, such as jobs created in a region of high unemployment

> Redress an imbalance caused by subsidies to some class of carrier or competing freight facilities

> Be necessary for national defense or public safety

> Fall within the established government responsibility for parts of the infrastructure, such as government-owned highways, ports, waterways, and airports

Government participation in a freight project does not necessarily mean project subsidies, the report notes. Governments may have a role as facilitators or brokers, for example, in cases where multiple jurisdictions are involved. In such cases governments may be able to cut red tape but still require that user fees charged by facilities cover project costs. If Congress and the states wish to attract more private-sector partners to public freight projects, they will need to expand the range of available financing options through increased funding for state infrastructure banks, changes in certain tax-exempt bond restrictions, and removal of state-level legal barriers to public-private joint development.

Funding for the study was provided by the U.S. Department of Transportation. The National Research Council is the operating arm of the National Academy of Sciences and the National Academy of Engineering. It provides independent advice on science and technology issues under a congressional charter.

Read the full text of Policy Options for Intermodal Freight (TRB Special Report 252)for free on the Web, as well as more than 1,800 other publications from the National Academies. Printed copies are available for purchase from the National Academy Press Web siteor at the mailing address in the letterhead; tel. (202) 334-3313 or 1-800-624-6242. Reporters may obtain a pre-publication copy from the Office of News and Public Information at the letterhead address (contacts listed above).