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Status of the Nation's Highways, Bridges, and Transit:
2004 Conditions and Performance
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Chapter 9 Executive Summary

Impacts of Investment: Transit

Current capital spending reached its highest level relative to estimated rehabilitation and replacement needs in urban areas in 2002 ($12.3 billion in spending compared with $10.3 billion estimated for rehabilitation and replacement), 19 percent higher. Since 1993, capital investment in transit assets has been equal to or slightly higher than the replacement and rehabilitation levels necessary to maintain conditions. Rehabilitation and replacement expenditures are always lower than total capital investment because a portion of the amount allocated to capital investment in each year is invested in new system capacity.

Current Transit Capital Spending Levels Versus
Rehabilitation and Replacement Needs,
(Billions of Current Dollars)
Analysis YearCurrent Capital SpendingEstimated Replacement and
Rehabilitation Needs

Based on FTA's budget history, about half of FTA's capital assistance has been allocated to rehabilitation and replacement expenditures and about half has gone to asset expansion, i.e., new capacity, which also contributes to higher average condition levels through the purchase of new assets.

Funding levels between 2000 and 2002 have been sufficient to maintain conditions. If the amount spent is 10 percent lower than the amount estimated to be needed to maintain conditions in urban areas ($8.72 billion annually instead of $9.69 billion annually), the average condition of transit assets is estimated to fall from 3.7 in 2002 to 3.6 in 2022. If this amount is lowered by 30 percent to $6.78 billion annually, average asset conditions are estimated to fall to 3.4 in 2022.

Effect of Capital Spending Constraints on Transit Condition
Percent of Recommended Rehabilitation and Replacement Expenditures to Maintain Conditions
Asset Type100%90%80%70%
Guideway Elements4.3 4.0 3.9 3.9 3.9
Facilities3.4 3.3 3.1 3.1 3.1
Systems4.1 4.0 3.8 3.7 3.6
Stations3.0 3.6 3.6 3.6 2.9
Vehicles3.4 3.4 3.3 3.1 3.0
All Assets3.7 3.7 3.6 3.5 3.4
Rehabiliation and Replacement Expenditure Scenarios 1$9.69$8.72$7.75$6.78
1 Excludes rural vehicles and facilities.

Funding levels between 2000 and 2002 have also been sufficient to maintain performance as measured by passenger travel time and vehicle occupancy. TERM estimates that for urban areas $5.3 billion annually will be needed to maintain current performance if PMT increases annually at the projected rate of 1.5 percent, or about 158 million new passengers per year.

TERM considers, in its benefit-cost analysis, the effect of capital investment on transit user costs and the effect of change in these costs on transit ridership. Transit user costs are comprised of two components: the out-of-pocket transit fare cost and the time spent making the trip or "travel-time cost." Travel-time savings are realized by adding or expanding an existing rail or BRT service or by adding vehicles to reduce crowding.

TERM estimates that $6.52 billion annually is required to improve transit performance in urban areas, $1.65 billion annually for asset expansion in new rail or BRT service to increase speed and $4.87 billion annually for asset expansion in new vehicles to reduce occupancy levels. The average ridership estimated to result from increasing speed is 22.2 million passengers annually; the average annual ridership estimated to result from decreasing occupancy levels is 36.7 million passengers annually.

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