Tramway Modernization Cost Benefit Analysis

Roosevelt Island Tramway October 4, 2007

Alternatives
1. Replace Critical Subsystems 2. New Similar Tramway 3. New Similar Tramway with Added Redundancy 4. New Dual Shuttle

Alternative 1 Replace Critical Subsystems • New track ropes, roller chains, hangers, and cabins • 7 year life expectancy • Capital cost: $5.6 million (2007 $) • 8 weeks downtime for subsystem replacement

Alternative 2 New Similar Tramway • Fundamentally new system • Existing functionality and performance • 30 year life expectancy • Capital cost: $14.25 million (2007 $) • 6 months downtime for replacement

Alternative 3 New Similar Tramway with Added Redundancy • Fundamentally new system • Improved service and availability • 30 year life expectancy • Capital cost: $17.25 million (2007 $) • 7 months downtime for replacement

Alternative 4 New Dual Shuttle • Replace with two systems • Improved service, reliability, and flexibility • 30 year life expectancy • Capital cost: $20.4 million (2007 $) • 7 months downtime for replacement

Life Cycle Costs
• Capital costs • Operating and maintenance costs • Power costs • Parts and supplies costs

Life Cycle Costs Key Assumptions
• All Costs in 2007 $ • Inflation impacts future costs and revenues equally • Time value of money is 5% annually • Ridership and revenue grow by 20% • Base ridership and revenue same for all alternatives

Annualized Life Cycle Costs
Alt 4: New Dual Shuttle
$3.9 M

Alt 3: New Similar Tram + Redundancy

$3.6 M

Alt 2: New Similar Tram

$3.4 M

Alt 1: Replace Critical Subsystems
$0 $1 M $2 M $3 M

$3.5 M $4 M

Capital

O&M

Power

Parts and Supplies

Riders per Month

100,000

120,000

140,000

160,000

180,000

60,000
A pr il M ay Ju ne Ju ly A ug u st Se pt e m be r ob e r
2005

80,000

O ct N ov e D ec e Ja Fe

Historical System Ridership

2006

m be

2007

r m be

r nu ar y br ua r

y M ar ch

Revenue per Month

100,000

150,000

200,000

250,000

300,000

350,000

50,000

A pr il M ay Ju ne Ju ly A Se pt em be r
2005

ug us t

O

ct ob er N ov em be r

Historical System Revenue

2006 2007

D

ec em be r Ja nu ar

y Fe br ua ry M ar ch

System Ridership and Revenue
Sept. 06-Aug. 07 1.6 M Riders, $3.0 M Revenue
180,000 160,000 140,000

Riders per Month

120,000 100,000 80,000 60,000 40,000 20,000 0
O ct e ob r v No D Ja M A Ju Se pt Fe M Ju A ec pr ug ch ar ay nu ne u br ly il be em em t us r be em

ar y

ar

be r

y

r

Period

2004-2005

2005-2006

2006-2007

System Down Time
Annual Down Time
Total Annual Operating Hours: 7,436

25 Hours

Alt 4: New Dual Shuttle Alt 3: New Similar Tram + Redundancy
440 Hours

Alt 2: New Similar Tram
580 Hours

Alt 1: Replace Critical Subsystems
850 Hours

0

200

400

600

800

1000
10

Annual Hours of Down Time

Net Annual Revenue / Rider
Revenue per rider = Annual Revenue – Annual Costs Annual Ridership

Net Annual Revenue / Rider
Alt 4: New Dual Shuttle
$0.06

Alt 3: New Similar Tram + Redundancy
$0.11

Alt 2: New Similar Tram
$0.17

Alt 1: Replace Critical Subsystems
$0.06

$0.00

$0.02

$0.04

$0.06

$0.08

$0.10

$0.12

$0.14

$0.16

$0.18

Revenue

Summary of Cost-Benefit
Tram Alternatives 1
Capital Costs Life Expectancy of Investment (years) Down Time for Replacement Discount Rate Annualized Capital Cost Annual Operating and Maintenance Costs Annual Power Costs Annual Parts and Supplies Costs Total Annual Cost Base Annual Ridership (2007) Base Annual Revenue (2007) Annual Hours of Operation Hours of Annual Down Time Revised Annual Ridership Revised Annual Revenue $5,600,000 7 8 weeks 5.00% $967,791 $2,300,000 $140,000 $75,000 $3,482,791 1,900,000 $3,600,000 7,436 850 1,900,000 $3,600,000

2
$14,250,000 30 6 months 5.00% $926,983 $2,300,000 $140,000 $25,000 $3,391,983 1,900,000 $3,600,000 7,436 580 1,968,989 $3,730,715

3
$17,250,000 30 7 months 5.00% $1,122,137 $2,300,000 $140,000 $25,000 $3,587,137 1,900,000 $3,600,000 7,436 440 2,004,761 $3,798,494

4
$20,400,000 30 7 months 5.00% $1,327,049 $2,400,000 $105,000 $35,000 $3,867,049 1,900,000 $3,600,000 7,436 25 2,110,799 $3,999,408

Net Annual Revenue

$117,209

$338,732

$211,357

$132,359

Net Revenue Per Rider

$0.06

$0.17

$0.11

$0.06

Non Quantifiable Benefits
• Safety/rescue • Reliability/dependability • Flexibility • ADA Access

Alternative 2 New Similar Tramway
Increases Revenue Per Rider by 11 Cents Compared to Alternative 1 • Reduces likelihood of a system failure • Improves reliability and dependability by reducing unscheduled down time • Flexibility of service similar to Alternative 1 • Improved reliability enhances ADA Access

Alternative 3 Added Redundancy
6 Cents Per Rider Compared to Alternative 2
Adds:

• Redundancy reducing likelihood of need for rescue operation should system fail • Further improves reliability and dependability by reducing unscheduled down time • Flexibility of service similar to Alternatives 1 and 2 • Improved reliability enhances ADA Access

Alternative 4 Dual Shuttle
11 Cents Per Rider Compared to Alternative 2
Adds: • Virtually eliminates need for rescue operation should system fail • Improves reliability and dependability by nearly eliminating unscheduled down time • Dual/independent system adds service flexibility not provided by other alternatives • Provides most reliable/dependable ADA Access1

What A Dual Shuttle Might Look Like

or…