Auditing and Financial Management:
Better Justifications Needed for Automated People Mover Demonstration Projects
CED-80-98, Aug 19, 1980
The Urban Mass Transportation Administration (UMTA), which provides financial and technical aid to develop and improve urban mass transportation, believes that downtown people movers could help solve the problems of increasing transit deficits, traffic congestion, and associated air pollution. In April 1976, UMTA announced its program to demonstrate the benefits of people mover systems in urban downtown areas. The objectives of this program are to test the operating cost savings automated guideway transit systems might deliver and to assess their economic impacts on central cities. In 1976, four cities were selected as demonstration cities. UMTA estimated that $220 million in Federal funds would be required to implement people mover systems in the four cities. UMTA also stated that three other cities would be permitted to develop people movers if they could do so with existing grant commitments. In 1977, Congress told UMTA to consider four more cities; UMTA also added another city to the list. A review of the program was undertaken, because the announced $220 million commitment for four new demonstration projects was to be funded from the UMTA discretionary capital grant resources, and because of the probability that the commitment would increase as project cost estimates and the number of projects increased. The review efforts were concentrated on the UMTA rationale for the program, the need for multiple projects, program goals, and proposed project evaluations.
UMTA had spent about $14.4 million on the nine projects through fiscal year 1979, and the May 1980 estimated Federal share of the projects was $675 million. UMTA has not adequately shown why each of the presently planned projects is needed to meet program objectives. UMTA officials believe that multiple projects are necessary to: (1) assure that at least one project is implemented; (2) test different technologies; (3) minimize the risk of failure to meet project expectations; and (4) reflect local differences such as climate and economic conditions which might affect project results. GAO did not believe these arguments justified the potential $675 million Federal investment in the demonstration projects. UMTA intends to compare people mover performances and impacts with selected alternatives such as bus and rail. These comparisons may not be conclusive because the operating data of the transit alternatives will not reflect potential actions to improve their effectiveness and efficiency. Also, the UMTA selection criteria do not assure that all potentially competitive alternatives are compared with each people mover project. Provisions have not been made to obtain data on alternatives.
- Review Pending
- Closed - implemented
- Closed - not implemented
Recommendation for Executive Action
Recommendation: The Secretary of Transportation should direct the Administrator, UMTA, to: justify the need for each of the presently planned demonstration projects by specifically stating what program objectives are being addressed by each project and why these objectives cannot be met with fewer projects; and seek guidance from Congress if the congressionally directed projects are affected by this justification process. Further, the Secretary should direct the UMTA Administrator to: compare each people mover project with all potentially competitive transit alternatives; adjust the cost and performance data of transit alternatives for the effects of actions to improve their operating efficiency and effectiveness before comparing them with people mover projects; conduct studies of transit alternatives to develop cost and performance information, if it is not readily available; clarify the evaluation plan for determining why changes occur in such factors as ridership and congestion in people mover project areas; and evaluate economic impacts of transit alternatives as well as people movers.
Comments: Please call 202/512-6100 for additional information.