This article looks briefly at how personal rapid transit (PRT) systems can be brought to market and turned into viable projects in the U.S. There may be many similarities in other countries but the process in the U.S. is better understood by the author.
Many people and companies are attempting to implement and/or promote PRT in the U.S. Most are following one or more of the paths described here. Some may not be aware of some of the paths described and the associated advantages or disadvantages.
Before discussing paths to implementation, a word about PRT promotion may be appropriate. Many well-meaning people, within and outside of the transportation industry, have been promoting PRT. Unfortunately, it is easy to over-promote PRT and end up doing more harm than good. Promoters should (in the author’s opinion) be careful to distinguish between the capabilities of commercially available systems and the promises of those still under development. They should also be very careful when discussing the costs of PRT systems. These costs are still not well understood and can vary greatly from application to application and supplier to supplier.
There are two primary paths:
This is the traditional path followed by companies such as 2getthere, Ultra and Vectus that have now all obtained commercial customers. The tough part about this path is raising the money to do the development. How do you convince investors to invest in test tracks, vehicles and control systems for something that has never before been proven to work and has, in fact, been preceded by many failures?
This is a path seemingly being followed by many (so far) unsuccessful companies. The concept is that a system that consists of designs, renderings and patents can obtain a client that will allow and pay for a pilot system that doubles as a development test track. To the author’s knowledge, no PRT system has accomplished this (unless you count the Morgantown GRT system). Now that PRT systems are commercially available, it seems less likely that any potential client would want to take this risk rather than just acquiring an existing system. For the risk to be acceptable, the upside would have to be very large. Basic PRT has a large upside yet the vendors with commercially-available systems are all still struggling to get their second clients.
There are four primary paths:
1. Conventional Transit Procurement Process
This usually proceeds along the following steps: planning; alternatives analysis; permitting (environmental); preliminary design; federal funding; implementation. The problem is that each step can take years. In the next five or more years we are likely to see many projects being implemented where PRT would have been the preferred alternative had it been commercially available when the alternatives analysis was performed. This is one of the problems of relying on federal funding. An example is a project in the City of Anaheim where PRT was eliminated in 2009 during the alternatives analysis and they are only commencing permitting and preliminary design in late 2012.
In this process the PRT alternative is not likely to survive the alternatives analysis if the proposed system is much more extensive than those already in public service. The risks associated with PRT are thus assumed to be mitigated by the fact similar systems are successfully in public service and the suppliers are also expected to provide performance bonds.
2. Innovative Transit Procurement Process
In this process a community (such as San Jose) decides they like PRT (or automated transit networks (ATN)) and follows these steps: planning (for ATN); risk identification and mitigation; alternatives analysis; permitting (environmental); preliminary design; federal funding; implementation. Basically they add the risk identification and mitigation task into the conventional process. Note that, in order to qualify for federal funding, comparison with conventional alternatives will still be required even though PRT was preselected. The disadvantage of this process is that it takes even longer than the conventional process. The advantage is that it could allow a client to choose a PRT system planned to be much more extensive than those already in public service.
3. Unsolicited Proposal
Some agencies permit, or even encourage, unsolicited proposals from the private sector in which private companies offer to undertake projects at their own risk and under their own financing, in return for receiving availability payments and/or fare box revenues. This could be the quickest path to a PRT project. If PRT costs substantially less than the conventional alternative, the benefits could include obviating the need for federal funds and thus saving the time and expense involved. Typically federal funding is only for 50% or less of transit projects. Avoiding these funds for a PRT project will usually mean the client can seek to apply them to other conventional projects.
In the unsolicited proposal process the PRT supplier will usually team with a large construction company that has the required bonding capability and can often also finance the project. Innovative financing at competitive rates (5% – 6%) is now readily available for publicly-owned PRT projects where the public agency has a good bond rating and the PRT system is already in public service. 100% non-recourse financing (including project development costs) is available at the time construction begins. This means that the project development costs have to be separately funded until the financing is in place.
In addition to the short implementation time, this path helps mitigate the risk perceived by the client since the project team is bonding the project. On the other hand, the PRT supplier must convince their construction partner that they can perform. The upside for the construction partner is probably higher than that for the client, who will probably only ever do a few PRT projects. The construction partner could establish themselves on the ground floor of a rapidly-growing industry.
The only publicly-known PRT unsolicited proposal process that is moving forward is in Amritsar, India, where Ultra teamed with Fairwood.
4. Niche Markets
Niche markets usually involve smaller systems that are privately owned and/or usually do not cross jurisdictional boundaries. These markets include campus applications on facilities such as airports, universities and hospitals. Procurement and permitting rules are generally less stringent and decision making is often faster. This path has historically proven to be the easiest for PRT systems as witnessed by implementations at the University of West Virginia, Hospital Rovisco Pais and Heathrow Airport. The Masdar City and Suncheon systems probably also qualify for this category.
Those attempting the design/sale/develop/sales path to commercialization should either raise the funding for a full development program or consider giving up, and those with commercial systems should focus on niche markets or unsolicited proposals, unless they have lots of patience.