Cost Allocation in Shared Major Rail Corridor Assets

We supported a major user/owner of a shared rail corridor and associated infrastructure during renegotiation of track access charges to determine the equitable sharing of operating and capital costs based on a variety of usage metrics under the prevailing governance framework.  Due to legislation changes, all track access agreements in the corridor needed to be renegotiated and the new framework calls for cost allocation based on infrastructure ownership, maintenance and operations responsibility, and usage statistics.  We were tasked to collect the necessary data to support such a model, to provide to the corridor-wide coordinating organization for their use.  At the same time, we built our own cost-allocation models as a way to forecast the expected cost and revenue impacts of the changes, and to provide a means to verify the reasonableness of cost allocation methods and metrics proposed by others.  This work enabled decisionmakers to understand the likely impacts of these changes ahead of official ratification of the new cost sharing framework, and helped to build consensus amongst all stakeholders.  Additionally, we utilized a similar methodology when a freight operator (tenant) needed to renegotiate its track access charges due to changing business circumstances, and as a result was able to get the rates being charged closer to the fully allocated cost of operating and maintaining the infrastructure.