Roco, Craig E. (2009-05). Applications of Engineering and Financial Analysis to the Valuation of Investments in Railroad Infrastructure. Doctoral Dissertation. Thesis uri icon

abstract

  • This record of study presents the findings of industry research projects performed during a one-year doctoral internship with the Austin Rail Group of HNTB Corporation. Four main internship objectives were established that address infrastructure problems related to the railroad industry and required the integration of engineering and financial analysis to develop effective project evaluation tools. Completion of the objectives resulted in: 1. Transformation of the Federal Railroad Administration methodology currently used to perform highway-railroad grade crossing analyses to a system of equations that can easily be used to evaluate regional rail infrastructure investments. Transportation engineering equations based on queuing theory were extended to new but equivalent formulations that accommodate unlimited, discrete train performance data from computer simulations of rail networks. 2. Application of risk assessment methods and railroad accident statistics to recommend a cost-effective alternative to legislative proposals to relocate hazardous materials transported by rail around metropolitan areas. A risk analysis model was developed to predict the risk of exposure from the release of a hazardous material following a train derailment so that changes in exposure achieved by alternative risk mitigation strategies could be observed. 3. A new method of measuring the susceptibility of railroads to financial distress following the catastrophic loss of a timber railroad bridge. Economic and finance principles were used to predict financial distress by determining of the number of revenue periods required to offset economic loss. 4. Demonstration of the use of financial market data in calculating the discount rate of public railroad companies for engineering analyses that involve negotiations with the public agencies. Surface Transportation Board rulings on the determination of a railroad?s cost of equity were applied to a comparative assessment of costs of capital for Class I railroads. A hypothetical example was used to demonstrate the interrelationship between engineering design strategies and their effects on the pricing of compensation to a railroad for right-of-way acquisition. These results, in fulfillment of the doctoral internship objectives, have provided HNTB with economic decision analysis tools and a series of conclusions used to provide recommendations to the Illinois, Missouri, and Texas Departments of Transportation, the Texas Legislature, and the railroad industry.
  • This record of study presents the findings of industry research projects performed during
    a one-year doctoral internship with the Austin Rail Group of HNTB Corporation. Four
    main internship objectives were established that address infrastructure problems related
    to the railroad industry and required the integration of engineering and financial analysis
    to develop effective project evaluation tools. Completion of the objectives resulted in:
    1. Transformation of the Federal Railroad Administration methodology
    currently used to perform highway-railroad grade crossing analyses to a
    system of equations that can easily be used to evaluate regional rail
    infrastructure investments. Transportation engineering equations based on
    queuing theory were extended to new but equivalent formulations that
    accommodate unlimited, discrete train performance data from computer
    simulations of rail networks.
    2. Application of risk assessment methods and railroad accident statistics to
    recommend a cost-effective alternative to legislative proposals to relocate
    hazardous materials transported by rail around metropolitan areas. A risk
    analysis model was developed to predict the risk of exposure from the release
    of a hazardous material following a train derailment so that changes in
    exposure achieved by alternative risk mitigation strategies could be observed.
    3. A new method of measuring the susceptibility of railroads to financial
    distress following the catastrophic loss of a timber railroad bridge. Economic
    and finance principles were used to predict financial distress by determining
    of the number of revenue periods required to offset economic loss.
    4. Demonstration of the use of financial market data in calculating the discount
    rate of public railroad companies for engineering analyses that involve
    negotiations with the public agencies. Surface Transportation Board rulings
    on the determination of a railroad?s cost of equity were applied to a
    comparative assessment of costs of capital for Class I railroads. A
    hypothetical example was used to demonstrate the interrelationship between
    engineering design strategies and their effects on the pricing of compensation
    to a railroad for right-of-way acquisition.
    These results, in fulfillment of the doctoral internship objectives, have provided HNTB
    with economic decision analysis tools and a series of conclusions used to provide
    recommendations to the Illinois, Missouri, and Texas Departments of Transportation, the
    Texas Legislature, and the railroad industry.

publication date

  • May 2009