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 1Replace 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 2New 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 3New 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 4New 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

Capital O & M Power Parts and Supplies

$3.9 M

$3.6 M

$3.4 M

$3.5 M

$4 M$0 $1 M $2 M $3 M

Alt 1: Replace Critical Subsystems

Alt 2: New Similar Tram

Alt 3: New Similar Tram + Redundancy

Alt 4: New Dual Shuttle

Historical System Ridership

60,000

80,000

100,000

120,000

140,000

160,000

180,000

April

May

June Ju

ly

August

Septe

mber

Octob

er

Novem

ber

Decem

ber

Janua

ry

Febru

ary

Mar

ch

Rid

ers

pe

r M

on

th

2005 2006 2007

Historical System Revenue

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

AprilM

ayJu

neJu

ly

August

Septe

mber

Oct

ober

Novem

ber

Decem

ber

Januar

y

Februar

y

Mar

ch

Rev

enu

e p

er M

on

th

2005 2006 2007

System Ridership and Revenue

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

September

October

November

December

JanuaryFebruaryM

arch

April

May

June

July

AugustSept. 06-Aug. 07

1.6 M Riders, $3.0 M Revenue

2004-2005 2005-2006 2006-2007

Rid

ers

pe

r M

on

th

Period

System Down Time

10

0 200 400 600 800 1000

Annual Hours of Down Time

Annual Down TimeTotal Annual Operating Hours: 7,436

850 Hours

580 Hours

440 Hours

25 Hours

Alt 1: Replace Critical Subsystems

Alt 2: New Similar Tram

Alt 3: New Similar Tram + Redundancy

Alt 4: New Dual Shuttle

Net Annual Revenue / Rider

Revenue per rider =

Annual Revenue – Annual Costs

Annual Ridership

Net Annual Revenue / Rider

$0.06

$0.17

$0.11

$0.06

$0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 $0.18

Revenue

Alt 1: Replace Critical Subsystems

Alt 2: New Similar Tram

Alt 3: New Similar Tram + Redundancy

Alt 4: New Dual Shuttle

Summary of Cost-Benefit  Tram Alternatives

  1 2 3 4

Capital Costs $5,600,000 $14,250,000 $17,250,000 $20,400,000

Life Expectancy of Investment (years) 7 30 30 30

Down Time for Replacement 8 weeks 6 months 7 months 7 months

Discount Rate 5.00% 5.00% 5.00% 5.00%

Annualized Capital Cost $967,791 $926,983 $1,122,137 $1,327,049

Annual Operating and Maintenance Costs $2,300,000 $2,300,000 $2,300,000 $2,400,000

Annual Power Costs $140,000 $140,000 $140,000 $105,000

Annual Parts and Supplies Costs $75,000 $25,000 $25,000 $35,000

Total Annual Cost $3,482,791 $3,391,983 $3,587,137 $3,867,049

Base Annual Ridership (2007) 1,900,000 1,900,000 1,900,000 1,900,000

Base Annual Revenue (2007) $3,600,000 $3,600,000 $3,600,000 $3,600,000

Annual Hours of Operation 7,436 7,436 7,436 7,436

Hours of Annual Down Time 850 580 440 25

Revised Annual Ridership 1,900,000 1,968,989 2,004,761 2,110,799

Revised Annual Revenue $3,600,000 $3,730,715 $3,798,494 $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 2New Similar Tramway

Increases Revenue Per Rider by 11 CentsCompared 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 3Added 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 4Dual 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…