Finance

Paying for the N.H. Capital Corridor

As with any visionary, long-term project, raising the appropriate finance is always the difficult bit. In the opinion of the NHRRA this project is no different from any major infrastructure project that benefits the community as a whole, such as the forthcoming widening of I93 estimated to now cost up to $1b – up from $400m just a few years ago.

Investment Cost to Rebuild the Rail Line

Our initial estimates put the total building costs of the project at around $200m. The general breakdown of this would be as follows:

	$80m from Lowell to Nashua
	$70m from Nashua to Manchester
	$50m from Manchester to Concord

At this preliminary stage we believe that the funding could be provided 80% by the Federal Government, as long as the state provides matching funds for the remaining 20%. Therefore the funds – around $40m - that the state would have to raise under this scenario are as follows:

	$16m from Lowell to Nashua
	$14m from Nashua to Manchester
	$10m from Manchester to Concord

We believe the state should look to form a series of public/private initiatives to encourage private businesses to help raise this money. Examples of this would be private investment in the project in return for development rights at the station sites of modern office, retail and residential facilities; leisure outlets such as restaurants and bars; privately owned concessions within the station localities and so on. By working with private industry, the state would:

	Remove a significant portion of the funding burden from the state to private business
	Receive a significant return on investment on the money it does put in, from the stimulation to the local economy that will result
	Regenerate struggling areas of our towns and cities using partially private money, benefiting all of us and improving the centers of our local communities

In summary the NHRRA believes that the state will have to raise and contribute around $30m, or $2m per year when bonded over 20 years – to enable the project to move forward.

Ongoing Costs and Revenues of Running the Line

Operating costs for the service will likely require initial funding from taxpayer dollars. In general commuter railways are largely self-funding, with revenue from passenger fares typically covering between 50 and 90 percent of operating costs. If you add concessions and advertising revenues and it is not unreasonable to believe that a New Hampshire rail service could be self-supporting over the long-term. In the initial 8-10 years at least the line will likely require around $10m per year in state funding, which when added to the $2m bonding repayment is likely to result in cash outflows of around $12m.

The NHHRA believes that the NH Capitol Corridor could have a positive return on investment once external factors are taken into account. Studies into the impact of the Downeaster demonstrate that Maine will generate significant economic benefit from its own annual $10m investment over the next 20 years and as a result of continuing passenger rail service. This includes:

	An estimated $7 billion of outside investment in the state’s economy as a result of private industry development projects
	The creation of over 17,000 new jobs
	Over 40,000 new residences
	Over $6m square feet of commercial space
	Over $200m annually of transportation savings to its residents, most of which will be spent immediately on other goods and services in the local economy
	Perhaps most importantly the generation of over $70m per year in property taxes that would not have been generated had it not been for the rail service

Maine expects to generate a positive return on its investment in the Downeaster of over 160% over the long-term.  New Hampshire should look for the same or greater impact as a result of investing in the NH Capitol Corridor.

Updates

As our campaign progresses, and as we learn more about the funding requirement and its potential sources, we will add updates to this page.

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