Public Policy Analysis Case Solution & Answer

Public Policy Analysis Case Solution

1 Transportation Demand and investment Planning  

            In the US,the demand for public transportation is increasing day by day due to the increasing population and arrival of many immigrants from across the world. However, the data of this demand (appendix 1) indicates that the country urgently needs effective transportation policies as, the current planning was based on 50 years of prediction and the population and demand for the sector is growing rapidly which is ultimately opposite of the previous planning.

            Furthermore, the states and federal government areplanning to increase the capacity of the sector by increasing the capacity of transportation means. The government is planning to increase the rail road, highways and other public transportation routes capacity to avoid problems in the future.

            Moreover, the government is trying to make these projects through PPPs as, through this way the government will benefit the private transportation sector as well as the capacity of thesegment will also be increased. Conclusively, it can be said that the government will be able to benefit both the ends i.e. private sector and public sector. Private sector will benefit in the sense that these projects will increase the profitability of the private transportation companies and the population will take benefit from these projects without facing any issues regarding transportation.

2.2 Published Statistics on Public Transportation

As far as the published statistics of the transportation sector are concerned, (appendix 2) it can be seen that the transportation system of the United States is strong enough to facilitate its public however, there are numerous ways which the country is using to help this sector. The data indicates that there are millions of aircrafts and air careers which are the primary mode of long distances cargo while, for intra state travel rail roads are commonly used. On the other hand, (appendix 3) there are almost 16,000 airports which are facilitating the overall air transport while a major chunk of them are only made to make the air shipments and cargo transactions. (Statistics, 2016)

2.3 Concluding Remarks on Data Used  

In a nutshell, it can be concluded that this sector is the back bone of the US economy as, this sector is generating a lot towards the GDP and also generating a huge revenue for many sectors and contributing a lot towards the economy of the country. Furthermore, the sector is providing business to many business which are directly or indirectly related to the economy while these segment also helps the economy to grow.

3 Cost Benefit Analysis (CBA)

3.1 CAPEX (Capital Expenditures)

            The cost and benefits which are associated to this sector (appendix 4) indicate that the cost of this segment is associated with renovation, initial investment, lanes and routes changes due to internal and external causes. However, there are numerous ways of transportation which the country is using and they are also generating handsome revenues. On the other hand, if we take a look towards the CAPEX (capital expenditure) or initial investment in any project across the region, then it can be seen that the PPP contract ranges from $25 million to billions of dollars depending upon the size of the project. (Commision, 2014)

3.2 Operating Expenditures and other considerations

Furthermore, the transportation project usually has an operating cost of almost 40% to 60% depending upon the labor rates as well as the market conditions and inflation. This indicates that if a project is starting from $100 million and will have
$50 million in revenue, then it will have $25 million of operating expense (OPEX) while after paying the legal fee, and other financial expense, the remaining amount will be the profit of the venture.(Commision, 2014)………………..

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