Utility companies and New York City currently maintain underground infrastructure by diverting traffic and cutting open the street utilizing noisy equipment, thus causing significant negative environmental, social, and economic impacts. The Capstone clients, seeking more sustainable street management, tasked the team with conducting a Life Cycle Cost-Benefit Analysis (LCCBA) and to identify financing options to evaluate the viability of installing underground Utility Tunnels (Utilidors) in the city. Utilidors would facilitate access to the infrastructure for repair and maintenance purposes with less impact.
The Capstone team compared costs of current practice with those related to the installation of a utilidor by stakeholder impact categories: NYC government, private utilities, traveling public, residents, and the environment. The team showed the benefits of installing a utilidor exceed the costs of the current practice. The report findings hold even under sensitivity analyses with conservative variations in key assumptions. The team also developed a two-phase financing system and tested its feasibility: (1) Revenue Ruling 63-20: a special purpose non-profit issues bonds for the upfront cost of the utilidor; (2) Revenue Credit: a newly established agency takes over management of the utilidor, dissolves the non-profit, and collects user fees from utilities for debt service and management of the utilidor. The Net Present Value of user fees is lower than the cost private utilities currently pay estimated with the LCCBA, which suggests utilities would have incentive to participate in the proposed scheme. The team concluded that introducing a Utilidor is both beneficial and feasible, thus worth considering further examination to complete a technical design.