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China Mobility Project

Mon, 26 Oct 2009 00:00:00 EDT

As part of the Galvin Project to End Congestion, Reason Foundation is engaged in a multiyear study of the impacts of traffic congestion on urban mobility and economic competitiveness and developing practical market-oriented solutions for policymakers.

A crucial component of this program is the investigation of private sector participation and involvement in providing, financing, managing, and operating transportation infrastructure. As part of our examination, Reason is actively researching transportation initiatives abroad through its China Mobility Project.

The China Mobility Project research team includes Reason Foundation Vice President Dr. Adrian Moore, Reason urban policy expert Dr. Samuel Staley, and transportation engineer Dr. Zongzhi Li.

About the Galvin Project to End Congestion

Most cities in the United States began as hubs for commerce, where motion was constant. Now, chronic traffic congestion is choking cities, strangling their economies and reducing our quality of life. The U.S. Department of Transportation estimates that congestion drains $168 billion annually from the economy in time and fuel, productivity losses, cargo delays, accidents and environmental impacts. Current policies do little more than slow the decline of the transportation system.

The Galvin Project to End Congestion is funded largely by Mr. Robert W. Galvin, former president and CEO of the Motorola Corporation, through the Galvin Project Inc. based in Schaumberg, Illinois and led by the Reason Foundation. The project's goals are develop practical, cost-effective solutions to keep urban economies competitive by increasing mobility through innovations in regional transportation planning, innovative finance, and optimal investment decision-making.

The Galvin Project has produced a number signature projects, including two books published by Rowman & Littlefield, Mobility First: A New Vision for Transportation in a Globally Competitive 21^st Century (2008) and The Road More Traveled: Why the Congestion Crisis Matters More Than You Think, and What We Can Do About It (2006).

In addition, the Galvin Project is underwriting the development of alternative long-range transportation plans for cities in the U.S. and abroad. The first plan was developed for Atlanta, Georgia (released in 2006) and gave momentum to several new capacity-building projects, including a north-south tunnel redirecting traffic away from downtown and a high-occupancy toll (HOT) network that could guarantee free-flow speeds throughout the region and be financed through road pricing. The second plan (released in 2009) focused on arterial road capacity improvements and management in Lee County, Florida and highlighted the ability of HOT networks and queue jumpers to greatly reduce congestion in smaller urban areas.

Reason is studying transportation plans for Chicago, Denver, Los Angeles and Chongqing, China.

The China Mobility Project

Reason's investigation into the causes of traffic congestion, the role of mobility in promoting economic development, and cures for the negative effects of congestion on urban economies, led its analysts to look internationally for examples of creative solutions to traffic congestion and falling mobility. China was identified as an innovative "early adopter" of key reforms, including the use of private capital to finance key infrastructure and the use of tolling to create dedicated revenue streams for new facilities and has been highlighted in research and analysis produced by Reason Foundation including commentary and significant references in the book Mobility First: A New Vision for Transportation in a Globally Competitive 21^st Century. Ongoing research, combined with fact-finding trips to China to learn what was happening "on the ground," led Reason Foundation to consider ways the U.S. could learn from China to improve its transportation investment decision-making and investigate what lessons U.S. transportation policy had for growing nations in other parts of the world.

Thus, Reason Foundation established the China Mobility Project in 2008 to foster a greater dialogue between transportation and land use experts in China and the U.S., anticipating joint research and analysis could better inform policymaking on both sides of the Pacific Rim. Specifically, we could begin with analysis of urban congestion problems in China, develop innovative solutions for congestion mitigation, and promote the adoption of the solutions by some Chinese cities.

In 2009, Reason Foundation formalized projects on long-range transportation planning with the Municipality of Chongqing and joint research with transportation faculty at Chang'an University in Xi'an.

Achievements of the China Mobility Project

Under the leadership of Adrian Moore, Ph.D., Reason Foundation's vice president of research, the China Mobility Project team visited Beijing, Shanghai, Chengdu, and Xi'an in May 2007 and November 2008, respectively. The team consulted with the Ministry of Transportation's China Academy of Transportation Sciences and Beijing Municipal Transport Commission in Beijing; Tongji University in Shanghai; Chengdu Municipal Transport Commission and Southwest Jiaotong University; and Chang'an University in Xi'an.

During these visits, the research team had extensive interactions with transportation decision-makers and researchers on a variety of topics with emphases on urban congestion problems, new thinking about regional transportation planning, and innovative financing, as well as optimal investment decision-making to support sustainable transportation in the 21^st century.

These trips led to formal relationships with the Yuzhong Construction Commission in Chongqing and Chang'an University. Our analysts and researchers are open to additional projects and are currently discussing more formal relationships with the Beijing Municipal Transport Commission and faculty at Tongji University in Shanghai.

Presentations

"Highway Infrastructure Investment Public Private Partnerships: China and U.S.A. Perspectives and Recommendations" (Shanghai Tongji University, November 2008)

"Transportation Planning in U.S. Mega Cities" (Tongji University, Shanghai, November 2008)

"Transportation, Mobility, and Air Quality in the 21^st Century City" (Southwest Jiaotong University, Chengdu, May 2007)

"Growth, Mobility, and the Implications for Urban Transportation Infrastructure and Finance" (Shanghai Tongji University, May 2007)

"Transportation, Mobility and the Global Economy: Lessons from the U.S. Experience" (China Academy of Transportation Sciences, Beijing, May 2007)

World Car Free Day Tomorrow---Buy Your Bread and Milk Now

shirley.ybarra@reason.org (Shirley Ybarra) — Mon, 21 Sep 2009 10:54:00 EDT

An article in the Washington Post on Sunday notified me that Tuesday, September 22, 2009 is World Car Free Day.

“World Car Free Day is the annual apex of a global movement that promotes alternatives to a car-dependent society, including improvement of mass transit, cycling and walking, and the development of communities where jobs are closer to home and where shopping is within walking distance.” The global movement is based in the Czech Republic and coordinates the European activities. Projects in the USA are run through a variety of member organizations because there were technical issues regarding the tax free status Details are here.

A charter for the organization is here and obviously their agenda does not include mobility.

While the loss of life attributed to automobile crashes is tragic--3,000 per day world wide according to this group—there are many who would disagree with their premise that “automobiles shape and distort our urban environment. They replace lively, pleasant, walkable, human-scaled communities with low-density, sprawled-out environments designed for getting elsewhere as fast as possible.”

The charter goes on to say, “Our society's dependence on an expensive, inequitable technology - the most resource-intensive means of locomotion ever devised - has expanded to achieve a radical monopoly in much of the industrialised world. This automobile-motorway-petroleum system denies free mobility to children, the elderly, the poor and the physically handicapped. Public transport, bicycle and pedestrian infrastructure is tacked on as an afterthought, if at all.”

This all seems a bid much doesn’t it?

The Washington DC area ranks in the top five in every survey of urban congestion, commuter stress and time wasted going bumper to bumper in traffic, the notion of a day without cars sounds as delightful as it does preposterous.
Last year, the DC region had 5,445 people participate and this year the organizers are hoping for 10,000 participants. However, the counter shows they are quite a ways from reaching their target tomorrow.

A 24-hour break from burning carbon fuel might mean a peaceful hiatus from noise and a reduction in air pollution, but there's no guarantee that it will be a better air-quality day. When the Washington DC region has a bad-air day, it's caused by an atmospheric inversion that stalls soot blown our way from the Midwest. This is well known.

Lon Anderson of AAA MidAtlantic has stated “There is a major misconception about how much vehicles contribute to pollution." Anderson said about 25 percent of the DC region's pollution comes from cars. He goes on to say, "What comes out of the tailpipe is about 95 percent cleaner than it was 25 years ago. A lawn mower that runs for a couple of hours puts more pollution in the air than a car driving from here to New York and back."

So as we do in “snow days” we in the DC area had best buy our bread and milk today before the Car Free Day starts tomorrow since the delivery systems for anything on the grocery shelves will be completely disrupted tomorrow. Not likely this year anyway.

My colleagues at Reason have written extensively about mobility and its contribution to the economy. See any of the writings of Adrian Moore, Bob Poole, Sam Staley and David Hartgen.

Daniel Burnham: Congestion is a Menace

sam.staley@reason.org (Samuel Staley) — Tue, 08 Sep 2009 11:50:00 EDT

This year is the centennial of the publication of the Plan of Chicago, a watershed initiative that was instrumental to the creation of modern urban planning in the United States. Chicago has been immersed in a year-long celebration of its publication and the decades long effort to implement the recommendations of its principal author: Daniel Burnham.

I wonder how many contemporary planners have really read the Plan of Chicago. If they did, the probably would be surprised by the following quote from page 100: "Congestion is a menace to the commercial progress of the city." They would also be surprised that four of the six major recommendations involved building new transportation infrastructure and three of those points were focused on expanding road capacity.

The Plan called for:

Major new regional roads in concentric rings around the center city, reaching as far as southern Wisconsin and northwestern Indiana;
Improvement of the "lake front," including the construction of what is now Lakeshore Drive, a major high-volume arterial linking northern and southern reaches of the region to downtown;
Major expansions of city streets and arterials, including multi-decking roads (e.g., Wacker Drive) and widening major avenues (e.g., Michigan Avenue).
Building and improving railway terminals to more efficiently ship freight to bypass the center city and improve the convenience of passenger travel into the central city.

The other major recommendations were for a system of regional partks and the construction of major new civic buildings and "centers of intellectual life."

While the modern professional planning community tends to focus on the civic centers and parks outlined in the plan, one could argue the central question was how to improve mobility to foster the city's continued development into a global mega city.

Smart Growth, Traffic Congestion Reduce Growth

sam.staley@reason.org (Samuel Staley) — Thu, 03 Sep 2009 02:25:00 EDT

One of the more persistent myths in the urban planning profession is that traffic congestion is either economically benign or may be a symbol of urban vibrancy. Adrian Moore and I debunk much of this in our book Mobility First (see chapter 3), but it now looks like the news media is beginning to take note based on the results from Reason Foundation's new study Gridlock and Growth by transportation analysts David Hartgen and Gregg Fields.

Specifically, the Examiner newspapers are running a nationwide editorial discussing the link between traffic congestion and economic growth. They are also pointing out the negative economic implications of so-called Smart Growth policies that either ignore these effects or dismiss their importance.

Their [Hartgen and Fields] results point to the significant economic upsurge that would result from eliminating traffic congestion. In San Francisco, for example, the study found that eliminating congestion around five key areas would generate $10 billion in new economic activity and add $750 million in tax revenue to local coffers. The figures for Denver are even more impressive, with $38 billion in economic growth and more than $2 billion in new revenue for local authorities. The average boost in economic growth for all eight cities studied was nearly $16 billion by 2030. The average tax-revenue increase was $900 million.

Hartgen and Fields’ bottom line is that reducing congestion and increasing travel speeds enough to improve access by 10 percent to key employment, retail, education and population centers increases regional production of goods and services by 1 percent. If that seems like too little return for the effort, the figures for increased economic growth and tax revenue would be quite tangible to those filling the new jobs, along with to the beneficiaries of enhanced government services made possible by added tax revenue. The alternative is to continue the losing “smart growth” regulatory game of increasing traffic congestion that suffocates economic expansion in the name of mass transit systems that the vast majority of people can’t or won’t use.

The full study and a more accessible policy summary can be found on Reason Foundation's web site.

Gridlock and Growth: The Effect of Traffic Congestion on Regional Economic Performance

dthartge@uncc.edu (David T. Hartgen) greg@hartgengroup.net (M. Gregory Fields) — Thu, 27 Aug 2009 00:00:00 EDT

Traffic congestion increases costs to American businesses, workers and families. It increasingly takes more time and fuel to get where we want to go, costing us time and money. As traffic congestion worsens, it will significantly undermine the economic competitiveness of U.S. cities and regions.

Perhaps one reason policymakers have not done more to reduce gridlock is a lack of understanding about how congestion negatively impacts our cities and their competitiveness. What would be the benefits of achieving free-flow travel conditions on a regional scale?

This study examines the economics of congestion relief. The report, authored by David Hartgen and Gregory Fields, finds that reducing congestion can add billions of dollars in productivity and economic output for cities. Free-flowing traffic increases regional productivity, which also increases tax revenues for local governments.

Most major cities will find that wise infrastructure investments that eliminate gridlock and produce free-flowing road conditions will more than pay for themselves by boosting the region’s economy, and thus tax revenues. The study shows that reducing congestion and increasing travel speeds enough to improve access by 10 percent to key employment, retail, education and population centers increases regional production of goods and services by 1 percent. While seemingly small in percentage terms, this leads to tens of billions of dollars for a region’s employers and workers due to productivity and efficiency benefits.

Toll Roads and Public-Private Partnerships in Texas

bob.poole@reason.org (Robert Poole) — Wed, 29 Jul 2009 16:10:00 EDT

Public Works Financing

The Texas Legislature, called back for a special session on transportation, failed to re-authorize long-term highway public-private partnerships (called CDAs in Texas) last month. So at least until 2011, when the Legislature next convenes, the only new toll projects that can go forward in Texas will be those launched by public-sector toll authorities.

I continue to get questions from journalists and others about how and why Texas changed from the state most aggressively using tolling and public-private partnerships to a place where these terms have become politically radio-active. And about whether what happened in Texas bodes ill for tolling and public-private partnerships (PPPs or P3s) in other states. As a member of Texas’s 2008 Legislative Study Committee on Private Participation in Toll Projects, I have given a lot of thought to these questions.

First of all, both the enactment of sweeping policy changes for tolling and PPPs and their all-out embrace by the Texas Department of Transportation (TxDOT) were a product of unique circumstances. Heavy-duty backing from Gov. Rick Perry, forceful leadership by a Transportation Commission led by (now-deceased) Ric Williamson, as well as strong support from the business community led to enactment of HB 3588 in 2003. TxDOT went into full marketing mode, to the public but also to the global toll/PPP industry. Dozens of projects were proposed, and competitions were held for quite a few of those, and more than half a dozen CDAs were awarded.

Alas, several factors created a populist backlash, which led to an unexpected coalition opposing both tolling and PPPs.

First, Gov. Perry’s overly ambitious plans for the Trans-Texas Corridor called for several multi-modal super-corridors running north-south and several more running east-west. To accommodate all the modes, a right-of-way take 1,200-feet-wide would be needed, far more than if the plan had been just for new toll roads. (And ironically, toll roads turned out to be the only viable use in these corridors.) That stirred up powerful opposition from conservative, mostly Republican, ranchers. And since the first corridor was to run parallel to congested I-35 from the Mexican border to Oklahoma, it fell afoul of right-wing conspiracy theorists who portrayed it as a “NAFTA Superhighway” that in their view was part of a master plan to merge Canada and Mexico with the United States and eliminate border controls. When a team led by Cintra, from Spain, won a concession contract to plan that initial corridor, this only fanned the flames of populist, anti-foreign company sentiment. (One anti-PPP blog even claimed that Cintra is “controlled by the Spanish royal family.”)

Yet those mostly right-wing populist groups would not have been sufficient to bring about the legislature’s 2007 moratorium on CDA projects. The additional political boost came about when the public-sector toll agency in Dallas, the North Texas Tollway Authority (NTTA), decided to contest the award of a concession to a Cintra-led team for the SH 121 toll road project. That battle ended up with both NTTA and its Houston counterpart, HCTRA, deciding that private sector CDAs were a mortal threat to their continued growth, siphoning off the most lucrative new toll projects and leaving them with the dogs. So they mobilized local legislators of both parties from the state’s two largest metro areas. And that provided the critical mass to enact the moratorium (as well as termination of the original plan for a whole set of multimodal Trans-Texas Corridors).

The moratorium legislation also created the Study Committee, and I was one of Gov. Perry’s three appointees, along with three each from the state Senate and House. We spent most of 2008 researching the issues that had arisen over CDAs, reached a number of conclusions, and made what I thought were sensible recommendations.

First, we concluded that the highway funding gap in Texas is so enormous that the state needs tolling and private capital (a position seconded by the “2030 Committee,” which reported shortly thereafter).

Second, we showed that start-up toll roads, especially stand-alone ones, are high-risk propositions poorly suited to inexperienced public agencies such as the many new Regional Mobility Authorities being created around Texas.

Third, we said that truly toll-viable projects will be relatively few, so that people who don’t like toll roads need not fear that most or all roads will end up tolled.

And fourth, we tried to disabuse people of the notion that most new toll roads are so lucrative that they would generate multi-billion-dollar up-front payments that could be used for all manner of locally popular projects.

In our recommendations, we argued against up-front payments altogether, suggesting that revenue-sharing is a better alternative, since it aligns the interests of both private and public sectors as long-term partners. One committee member, concerned over potential windfall profits, pushed to include a “termination for convenience” requirement in all CDAs that would let the state buy out the concession at a pre-determined price. Finance experts pointed out that such a provision would, in effect, give the government most of the upside (if the revenue came in higher than projected) while leaving the private sector with all of the downside (if revenue were below forecast)—and would hence make Texas projects unattractive. So we again recommended revenue-sharing, as the better way to deal with windfall profits.

The most contentious issue we dealt with was “local primacy”—the idea (advanced by friends of NTTA and HCTRA) that if CDAs continued, they should be used as a last resort, only if the local toll authority (including the brand-new RMAs) didn’t want to do the project. Instead, we researched and recommended the use of value-for-money analysis such as the Public Sector Comparator model used in Australia, Canada, and the U.K. And to de-politicize the analytical process, we called for creation of a Partnerships Texas entity, modeled after Partnerships BC and Partnerships Victoria.

Unfortunately, all this was ignored during the contentious 2009 legislative session. The bill to extend CDA authority was amended to include both the termination-for-convenience provision and the local primacy provision. Fortunately, in my view, that bill died in the regular session, and no further action was taken on CDAs in the subsequent special session.

So does the Texas debacle mean PPP toll roads are on the way out in the United States?

Absolutely not. First, the same huge highway funding shortfall that still faces Texas exists just about every place else, especially in fast-growing states like Arizona, California, Georgia, and Virginia. This spring both Arizona and California enacted sweeping new enabling legislation for public-private partnership toll roads (as did Puerto Rico). Both Arizona and California were early pioneers in this area but suffered backlashes that led to no projects getting authorized in the former and only two in California (and the later repeal of its pilot program legislation). And given the interest and need for funding of large new projects in Michigan, New York, and Pennsylvania, I expect PPP toll road legislation to be enacted soon in at least two of the three. And progress continues on large-scale concession projects in Florida and Virginia.

As for Texas, it could go either way over the next few years. The optimistic case would be that already-authorized CDA projects get completed or are well along in construction by the time of the next legislative session in 2011 while the funding gap widens even further. The demonstration value of billion-dollar-scale PPP toll roads being built while other needed highway projects languish for want of funding could be powerful. And if large new public-private partnership investments are occurring in California, Arizona, Michigan, Florida, and Virginia by then, cooler heads may be able to argue that Texas should be getting its share of this investment. That could bring back a CDA program, hopefully reformed along the lines of our 2008 committee’s recommendations.

The case for pessimism is based on a different set of possible events. Sen. Kay Bailey Hutchison, who continues to make populist arguments against tolling and PPPs, is expected to challenge Gov. Perry in the Republican primary next year. It is possible that she gets elected governor on a platform that includes those anti-toll themes and fills the Transportation Commission with anti-CDA people. You could see the big public-sector toll agencies (especially NTTA) barely pull through financially, despite taking on far more debt than is prudent, by traditional standards. And if none of the fledgling RMAs gets into big trouble with a failing toll project, it may allow people to ignore the high-risk nature of start-up, stand-alone toll projects. In that case, the 2011 Legislature may decide to ignore CDAs, at least for another two years.

The latter scenario would be troublesome and tragic for Texas, since it would mean less highway investment and therefore more congestion and its attendant economic costs.

Texas has massive infrastructure needs and if or how the state chooses to address those needs will go a long way in determining its economic future.

Robert Poole is director of transportation studies and Searle Freedom Trust Transportation Fellow at Reason Foundation. This column first appeared in Public Works Financing.

Mobility Goes to the Back of the Bus

sam.staley@reason.org (Samuel Staley) — Wed, 29 Jul 2009 11:41:00 EDT

On Tuesday, the Urban Land Institute (ULI) released a major report on transportation policy and ways to reduce carbon dioxide emissions titled "Moving Cooler: An Analysis of Transportation Strategies for Reducing Greenhouse Gas Emissions." Given that most current transportation technologies rely on burning oil, a fossil fuel, to move people, goods and services from Point A to Point B, the most effective formulaic way to reduce carbon emissions is simply to stop moving. Not surprisingly, that's a big part of the ULI report.

The "strategies" that do the most to reduce green house gas emissions are those that dramatically increase the cost of driving a personal vehicle (car) and get us out of our cars and onto transit. In short, reduce vehicle miles traveled (VMT) and get people onto buses and trains, even if they still have to travel further and see vast more amounts of time consumed in everyday travel.

The report is not without its critics. Alan Pisarksi writes today at New Geography, this reports leaves out a lot.

"Maybe the saddest part of it all, the authors appear not to take global warming or energy security very seriously at all. Rather these public concerns are just a convenient hook, the cause du jour, on which to hang their favorite solutions. If global warming matters – and it does; if energy security matters – and it does; then early action is clearly called for, particularly given the cumulative nature of GHG gases. But somehow the things easily done and carrying with them little in the way of disruption or public costs – carpooling, telecommuting, dispersed work – are largely written off. Such immediate, low-cost actions as highway operations strategies including better traffic signalization, improved traveler information and accident response systems receive little emphasis.

"Overall, the treatment of costs and benefits will leave readers gasping:

Travel times don’t get counted – so shifting from a 15 minute car trip to an hour on transit or walking has no penalty.
Transit subsidies don’t get counted – so doubling subsidies to increase ridership has only benefits.
Every possible pricing strategy is invoked – congestion pricing, cordon pricing, on-street parking fees, extreme fuel prices – in order to get people out of cars, and then the loss of their cars is counted as a benefit.

"At the same time the benefits and the costs involved are so corrupted to be meaningless. It will take weeks for analysts to tease out what really was done in the way of assumptions to create winners and losers. And there is no effort to tally all the costs exacted on the average household, or the typical business or even governments for that matter. The costs would add up to a permanent recession."

Unfortunately, this report will likely be widely embraced in the current Administration, which has decided that mobility is a social cost, not a social benefit. The Administration has made a big deal of subverting transportation policy to environmental policy (and increasingly) housing policy objectives.

While reducing greenhouse gas emissions should be considered a legitimate policy goal, these goals need to be balanced with the tremendous social costs and upheavel that would result from the aggressive implementation of the transit, land use, and car reduction strategies outlines in this report.

Mobility First Called "Compelling" in New Review

sam.staley@reason.org (Samuel Staley) — Mon, 27 Jul 2009 10:34:00 EDT

We were pleased to see this review of our book Mobilty First: A New Vision for Transportation in a Globally Competitive 21st Century on The Forgotten Man blog. The review says Mobility First is "an important book" that "should be read by everyone." More specifically,

"Sam Staley and Adrian Moore in their important new book Mobility First show how congestion is only getting worse and threatens our economic vitality. The research is detailed and their analysis is compelling. They recommend some basic economic approaches such as matching supply with demand and engineering solutions such as improving ‘the flow in the pipe, not the size of the pipe’ They point out examples of technological improvements that are already in use in various parts of the world."

The Forgotten Man blog is focused on issues centered on the "forgotten man" memorialized in an essay by William Graham Sumner in 1883. Perhaps the most famous passage from the essay is the following (emphasis added by me):

"There is an almost invincible prejudice that a man who gives a dollar to a beggar is generous and kind-hearted, but that a man who refuses the beggar and puts the dollar in a savings bank is stingy and mean. The former is putting capital where it is very sure to be wasted, and where it will be a kind of seed for a long succession of future dollars, which must be wasted to ward off a greater strain on the sympathies than would have been occasioned by a refusal in the first place. Inasmuch as the dollar might have been turned into capital and given to a laborer who, while earning it, would have reproduced it, it must be regarded as taken from the latter. When a millionaire gives a dollar to a beggar the gain of utility to the beggar is enormous, and the loss of utility to the millionaire is insignificant. Generally the discussion is allowed to rest there. But if the millionaire makes capital of the dollar, it must go upon the labor market, as a demand for productive services. Hence there is another party in interest - the person who supplies productive services. There always are two parties. The second one is always the Forgotten Man, and any one who wants to truly understand the matter in question must go and search for the Forgotten Man. He will be found to be worthy, industrious, independent, and self-supporting. He is not, technically, "poor" or "weak"; he minds his own business, and makes no complaint. Consequently the philanthropists never think of him, and trample on him."

The idea behind the Forgotten Man was recently revitalized through a excellent popular book on the Great Depression of the same name by Amity Shlaes.

Is the Goal to Reduce Emissions, Fuel Use or Mobility?

bob.poole@reason.org (Robert Poole) — Mon, 15 Jun 2009 17:05:00 EDT

One of the most troubling ideas gaining a head of steam as we approach reauthorization is that a key transportation performance measure should be reducing vehicle miles traveled —either in total or per capita. The logic behind this idea is that using petroleum fuel is bad, and emitting CO2 is bad, so transportation funding and programs should deliberately aim to reduce vehicle miles traveled (VMT), in order to advance those other goals.

This idea has been percolating at the Brookings Institution and among any number of environmental groups, and it’s also being heavily promoted by the America 2050 project. But what really caused alarm among transportation people was the release last month by Sens. Jay Rockefeller (D-WV) and Frank Lautenberg (D-NJ) of their Federal Surface Transportation Policy and Planning Act of 2009 (S.1036). The first of its major goals for federal transportation policy is “Reduce national per capita vehicle miles traveled on an annual basis.” It also calls for government-set targets for shifting freight from road to rail.

Putting these idea into legislative language has started to arouse transportation interest groups, as well it should. First out of the box was the American Highway Users Alliance, which sent a strong letter of opposition to every member of the Commerce Committt, including Chairman Rockefeller. I’m expecting all sorts of transportation related groups - AAA, ATA, ARTBA, AASHTO, and others - to join in the opposition, once they realize the implications of this proposal.

I’ve written about VMT restrictions at greater length in my May column for Public Works Financing.

Suffice it to say that if the goal is to reduce CO2 or petroleum use, Congress should target those things directly. The idea that reducing Americans’ mobility is a sensible or cost-effective way to reduce greenhouse gases has no empirical support. Indeed, I challenge any proponent of the idea to come up with evidence that it would cost less than the $50/ton of CO2 removed ceiling as a benchmark for “affordable” greenhouse gas reduction measures. (My guess is that it would cost thousands of dollars per ton.)

Mobility is the purpose of transportation. Its benefits, both for individual well-being and the health of the economy, are enormous.

As we head into reauthorization, our watchword should be: “Reduce CO2, not mobility.”

Transit Funding Could Come from the General Fund, Not the Highway Trust Fund

bob.poole@reason.org (Robert Poole) — Fri, 12 Jun 2009 08:01:00 EDT

It’s been widely reported that, just like last year, the Federal Highway Trust Fund is going to run out of money before the end of the federal fiscal year. The fix being talked about, like last year, is an emergency infusion from the general fund, thereby adding another $5-7 billion to the federal budget deficit.

The cause of this shortfall is no great mystery. If you’ll recall the last reauthorization debate, the transportation committees in Congress (especially in the House) were determined to greatly increase the size of the program, but the White House had promised to veto any fuel tax increases. So Congress compromised, pushing the promised funding level as high as they possibly could, by making “rosy scenario” assumptions about fuel prices, driving, and the state of the economy. Whoops! Last year’s high oil prices caused people to cut back on driving, meaning fewer gallons were sold than had been projected, and the subsequent recession caused people to economize on driving for a different reason. Both factors translated into lower fuel tax receipts. Meanwhile, the backlog of highway maintenance and repair, let alone long-needed expansions, continues to increase. And the Obama administration has “taken a gas tax increase off the table.”

Meanwhile, transit systems nationwide are making a big push for increased funding, based partly on last year’s ridership increases (which the recession seems to be reversing) and decades of deferred maintenance. With no fuel tax increase in sight, and both highway and transit groups proposing increased funding, how can this circle be squared?

My friend and colleague Alan Pisarski last week proposed what I think is a very promising—if radical—idea. “If we are going to need an infusion from the general fund, and we also need more total funding, why not ‘resolve’ the question of share by avoiding the question? Transfer the transit program 100 percent to the general fund and use all the Highway Trust Fund for highways. It might be a win-win.”

A few years ago this idea might have been dismissed out of hand, primarily because it would have been considered too risky for the transit community. After all, it took until 1964 to get even general fund money for transit, and it was considered a great breakthrough for transit when a transit account was created as part of the Highway Trust Fund (HTF) in 1982. That permitted highway user-tax money, for the first time, to be spent on transit. Because funding highways was popular, any expansion of the HTF would mean an increase for transit, too. And back then, highways were considered far more popular than transit.

That was then, this is now. In the age of energy insecurity and fear of global warming, transit is the cause du jour for many elected officials. It’s quite possible that transit would fare better if it did not have to fight with highway interests for its portion of Highway Trust Fund funding. A Congress eager to showcase its green credentials might want to reposition transit as an energy/environment/housing program, funded (like those programs) out of general revenues. Currently transit gets about 20 percent of Highway Trust Fund dollars, or around $8 billion. Shifting that amount to highways would more than cover the current shortfall. Yet replacing that $8 billion for transit would be a rounding error in the federal general fund.

Making this change would restore the original user-pays/user-benefits principle to the Highway Trust Fund. And if highway users could be assured that all of their fuel-tax dollars would actually be spent to maintain and improve the highway system, they just might be more comfortable with increasing the fuel tax rate. And by restoring the integrity of the highway fund, this change could help pave the way for eventual transition to a highway vehicle mileage tax (VMT) fee as the gas tax’s replacement.

Learning From Abroad: Public-Private Partnerships Building Highways Overseas

bob.poole@reason.org (Robert Poole) — Fri, 12 Jun 2009 07:00:00 EDT

Some of the recent U.S. debates about public-private partnerships for highways sound as if the idea is brand new, untried, and hence inherently risky. Yet long-term concession agreements under which the private sector can design, finance, build, operate, and maintain major highways, bridges, and tunnels date back to the 1960s in Europe and the 1990s in Australia.

We can learn a tremendous amount from the experiences of our counterparts overseas. At the Transportation Research Board annual meeting in January, I attended a presentation on a study tour on the overseas public-private partnership (PPP) experience, organized by AASHTO and the FHWA as part of the National Cooperative Highway Research Program. The report on this study tour, “Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience,” was published in March 2009 (FHWA-PL-09-010).

The group, representing FHWA and four state DOTs, visited Australia, Portugal, Spain, and the United Kingdom in the summer of 2008. These countries have been doing PPPs long enough that the team was able to learn about second-generation and even a few third-generation projects. Their general findings include the following:

Highway PPPs are used not simply for financial reasons but are selected on a value-for-money feasibility analysis basis.
PPPs are a critically important and growing percentage of national highway networks.
Highway PPPs do not necessarily require tolls; some are based on shadow tolls and/or availability payments.
The public sector mindset and skills for PPPs differ substantially from those needed for conventional project delivery.
A successful long-term PPP agreement must balance technical, commercial, and legal considerations.
Public agencies recognize that a PPP arrangement is, in fact, a long-term partnership with the private sector founded on a contract.

The descriptions alone of how these four countries have adapted general PPP principles to their circumstances are worth the price of admission. But the report goes on to report numerous useful findings about methodology in selecting, negotiating, and managing long-term PPP arrangements.

I should add, because this point is much-argued about in the United States, that the report’s statement that the longest concession term they observed was 50 years, with most running 30 to 40 years, is true of the countries they visited. France, which they did not visit, has a number of bridge and tunnel mega-projects with terms of 70 or more years.

President Obama vs. The Beach Boys

bob.poole@reason.org (Robert Poole) — Thu, 11 Jun 2009 17:59:00 EDT

As a long-time Beach Boys fan, and as still a bit of a car buff, I was intrigued by this headline on Daniel Henninger’s Wall Street Journal column of May 28, 2009. Basically, the column was a lament for what Henninger sees as the passing of America’s car culture, as most recently epitomized by the idea that the Obama administration’s new 39 mpg CAFÉ standard is an “everybody wins” policy.

Henninger’s reasoning is that the advent of 39 mpg cars means the end of enthusiasm for cars as glamorous, high-performance vehicles—not simply a mundane means of getting from A to B. That car culture was, of course, exemplified by numerous songs, not only by the Beach Boys but by Chuck Berry, Bruce Springsteen, The Who, Deep Purple, and many others.

But are things as bad as all that? I still pick up Car And Driver from time to time, and there is certainly no shortage of exciting, high-performance cars today. Not only expensive Corvettes and BMWs but also sporty roadsters like the Mazda Miata and the new Hyundai Genesis. To be sure, the market for those cars might be reduced once the new CAFÉ standards are fully implemented, but I also question Henninger’s assumption that glamour and performance are inextricably linked with the internal combustion engine.

Way back when, I took a test drive in the ill-fated GM EV-1. Yes, its lead-acid battery pack was ridiculously inadequate for a serious production car. But the high-torque electric motor really peeled out! And take a look at the June 8, 2009 issue of Forbes, with its cover story on forthcoming electric cars, including the stunning high-performance Fisker (on the cover) and Tesla. These entrepreneurs aren’t aiming to build nerdy little econo-boxes; if they live up to their builders’ claims, these will be stylish, high-performance drivers’ cars. (And I can hardly wait till the prices get down to my range!)

I think Henninger greatly underestimates the appeal not only of personal mobility but also of driving a superbly performing vehicle. The internal combustion engine is no longer the be-all and end-all of auto-mobility. But cars—really good cars—will be with us for a long, long time.

Performance-Based Transportation Spending and Policy

bob.poole@reason.org (Robert Poole) — Thu, 11 Jun 2009 17:27:00 EDT

“U.S. transportation policy needs to be more performance-driven, more directly linked to a set of clearly articulated goals, and more accountable for results.” It’s hard to disagree with these bold opening lines of the report from the Bipartisan Policy Center (BPC) National Transportation Policy Project, released earlier this week. “Performance Driven: A New Vision for U.S. Transportation Policy,” (.pdf) was released June 9th at a news conference in Washington.

Much of the case it makes is unarguable—the existing federal policy has no focus, our infrastructure is inadequate, the funding is insufficient, there is little or no attempt to achieve positive returns on investment, and there is little or no accountability for results. So I agree that a better approach is called for. Only I don’t think the entire BPC package is it.

Yes, I’m all for thorough streamlining of the sprawling federal program, for greater competition for funds, and for focusing on both preserving/rebuilding the existing system and adding capacity where it makes sense to do so. And I also agree that “the performance of the transportation system can be directly influenced by how users pay for it” and that we should “link revenue collection to system use and impacts.”

But a key recommendation of BPC’s package of recommendations is “mode neutrality.” Instead of highway user taxes being used just for highways, these funds would become general-purpose surface transportation money, usable for highways, freeways, urban transit, intercity passenger rail, freight rail, and even short-sea shipping (“all forms of freight transportation”). One of the two major programs would provide mode-neutral funding for urban transportation and the other for long-haul transportation. So the net result of all this is that highway users would be the ones paying the bills for federal funding of all the other modes.

The other problem with mode neutrality is that it is at odds with all BPC’s fine words about pricing and user-pays. The original federal highway program was, indeed, a true user-pays/user-benefits program. In principle, highway users could demand whatever level of highway services they were willing to pay for, via their fuel taxes—which could only be spent, by law, on highways. Thus, both the state and the federal highway programs operated somewhat like network utilities, albeit with indirect user charges rather than direct ones like electricity, gas, phone, and water bills. But once the fuel tax becomes a generalized funding source for all manner of things (as it is gradually turning into at the federal level, with only 60% of federal highway taxes actually spent on highways), the connection between use and payment becomes increasingly tenuous. Opening that pot of money to all forms of freight and passenger transportation would be the coup de grace for the user-pays/user-benefits system. And as a practical matter, without a massive increase in the fuel tax level, allocating the relatively fixed pot of fuel tax money among many additional claimants virtually guarantees that much less would be left to rebuild and modernize our vitally important highways.

And that is true regardless of how many clever ideas BPC and other advocates of performance-based transportation put forward—benefit/cost analysis, new performance measures, etc.

In the last reauthorization, Congress passed a number of programs that were supposed to fund strategically important projects—and then promptly earmarked every single dollar in those programs to projects of their own political choosing. And how they screamed when the US DOT under Mary Peters scrounged up close to $1 billion (from 13 existing programs) for truly competitive, performance-based Urban Partnership grants!

Needless to say, I am all in favor of performance-based funding, wherever this can possibly be done. But throwing out—rather than strengthening—the user-pays/user-benefits principle is too high a price to pay. A better course would be to shame Congress into creating accountable, performance-based funding within existing modal programs.

Reducing Greenhouse Gas Emissions Without Reducing Mobility

bob.poole@reason.org (Robert Poole) — Tue, 09 Jun 2009 16:36:00 EDT

Public Works Financing

This year’s six-year reauthorization of the federal surface transportation program is likely to have far greater impact on our transportation future than anything since the launch of the Interstate highway program in 1956. Many organizations are calling for fundamental changes in the federal role, and while there is certainly much that is dysfunctional about the current federal program, some of the proposed changes could make things worse, not better.

An example is the proposal released on May 15 by Sens. Jay Rockefeller (D-WV) and Frank Lautenberg (D-NJ) of the Senate Commerce Committee. The first item on their list of “Major Goals of the Federal Surface Transportation Policy and Planning Act of 2009” was this: “Reduce national per capita motor vehicle miles traveled [VMT] on an annual basis.” Many of their other goals were either laudable or innocuous, but this one is definitely harmful, as I will explain.

Before getting into the details, however, just imagine a world in which any proposed new toll road (or toll lanes) project would have to demonstrate conformity with a state’s VMT reduction plan, in order to get a federal record of decision allowing it to be built. In other words, you’d have to prove that your new toll road would lead to less driving.

You may think that is highly unlikely to be legislated, but if you think that, you haven’t been paying attention to debates on transportation policy, energy policy, and global warming over the last few years. Reducing vehicle miles traveled is on the wish-list of just about every leading environmental organization. It is part of the agenda set forth in the 2008 Brookings paper, “A Bridge to Somewhere.” And it’s a top priority of a group called America 2050, with backing from the Rockefeller Foundation and several other nonprofits such as the Regional Plan Association and the Lincoln Institute of Land Policy.

Not only that, but VMT reduction is now the law in California, thanks to SB 375, enacted last year. In the name of greenhouse gas (GHG) reduction, this law sets GHG reduction targets for each of the state’s 17 metro areas and requires them to draft smart growth-oriented land use and transportation plans aimed at reducing VMT. Those that produce the “best” plans to do this will get priority in the allocation of about $20 billion per year in federal and state transportation funding.

The logic chain that underlies such efforts goes something like this. Transportation is a major source of GHGs, and the more people drive, the more GHGs they emit. If their jobs, schools, and shopping are close to where they live, they won’t drive as much. Therefore, government should promote compact, high-density development so as to reduce driving and therefore to reduce GHGs.

When working through this logic chain with data and numbers, it starts falling apart. First, all of transportation (including trucking, airlines, barges, etc.) contributes 27.9 percent of U.S. greenhouse gas emissions, according to the Environmental Protection Agency. Personal vehicles (cars and light trucks) are 61 percent of that; hence, personal vehicles are the source of 17 percent of GHGs, not one-third, as you will often hear.

Second, greenhouse gas emissions from vehicles are a function of speed. Stop-and-go driving (as in congestion) produces much greater GHG emissions than steady-speed driving between 30 and 60 miles per hour; above about 60 mph, GHGs increase fairly rapidly.

Third, there is no hard data showing that people who live in higher densities drive significantly less than those who live in typical suburbia.

Fourth, there is excellent data from the Australian Conservation Foundation showing that among housing types, townhouses have the lowest carbon footprint, single-family suburban houses the second-lowest, and high-rise condo-type dwellings the highest. This logic chain also ignores considerable evidence that traffic congestion increases with urban density—which of course increases GHG emissions.

If the attempts to reduce VMT in these ways succeed, the result will be even greater reductions in mobility than Americans already suffer through from today’s traffic congestion. There is a small but growing academic literature that finds direct correlations between reduced travel times and regional economic productivity. One key example: if you can go twice as far in a 30-minute commute, your potential-jobs area is four times as large (since the area of a circle around your house is proportional to the radius squared). Some of this research is summarized in the 2008 book Mobility First, by my Reason colleagues Sam Staley and Adrian Moore.

There’s already a lot of momentum for including reduced VMT as one key performance measure in the reauthorization bill, so it’s likely to take a serious effort to keep it out. Besides debunking the logic chain on which it’s based, let’s consider some positive talking points that can help make the case.

First, Americans should demand that proposed transportation-related greenhouse gas reduction measures meet a reasonable cost-effectiveness standard. Both the Intergovernmental Panel on Climate Change and the well-respected McKinsey & Company study, “Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?” recommend $50 per ton as a good benchmark, below which there are ample opportunities for large-scale but low-cost GHG reduction measures. (In the vehicular area, one of the most cost-effective is miles-per-gallon standards, like the tougher ones President Obama announced in May.) VMT reduction, especially via smart growth land use changes, will surely flunk that test.

Second, instead of setting goals for reduced VMT, we should aim to reduce VHT—vehicle hours of travel. High-occupancy toll (HOT) lanes and new urban toll roads using congestion pricing are excellent at reducing vehicle hours of travel, since reliable time savings are their main rationale. And since congestion pricing can maintain free-flow, uncongested travel, these managed roadways also reduce GHG emissions.

Finally, if we need a slogan, perhaps it could be this: Reduce CO2, not mobility. If we can re-frame the debate in this manner, we might well prevent the enactment of very harmful federal restrictions on driving.

Robert Poole is director of transportation at Reason Foundation.

Lee County, Florida Looking at Pragmatic Solutions

shirley.ybarra@reason.org (Shirley Ybarra) — Fri, 06 Mar 2009 07:17:00 EST

A recent study by Reason and my colleague Bob Poole recommended some interesting potential solutions to the Lee County congestion problems. An article in Naples News provides a good summary. A couple of highlights:

Poole said the Travel Time Index, a measure of time lost to congestion, is 50 percent worse in Lee County than in the average small urban area. The projections make it worse here in 2030 than it is in Tampa or Orlando today.

The study recommended tolls for "queu jumpers" meaning underpasses or overpasses for the congested intersections.

Lee County Commission Chairman Ray Judah said tolling is a pragmatic and realistic consideration

“Just look at the shortfall in the 2030 transportation plan,” he said. “Look at the state scaling back funding for the transportation system. They cut $1.3 billion last session just from our district. The federal transportation program is ready to go bankrupt. We have to look at the most viable options that remain.”

An interesting study, worth reading and perhaps offers a solution for Lee County traffic congestion.

Reducing Congestion in Lee County, Florida

bob.poole@reason.org (Robert Poole) info@reason.org (Chris Swenson) — Thu, 26 Feb 2009 00:00:00 EST

Traffic congestion in fast-growing Lee County, Florida, is expected to worsen dramatically in the coming decades. And the current long-range transportation plan does not adequately address those needs, according to a new Reason Foundation study.

The Reason Foundation report finds Lee County needs 488 new lane miles of road capacity by 2030 to handle population growth and eliminate severe congestion in the region. The study concludes that this can be accomplished by making all new lanes planned for I-75 variably-priced toll lanes and providing modestly-priced tolled overpasses at major intersections on key arterials. The overpasses, or “queue jumps,” would allow drivers to bypass stoplights in exchange for paying tolls.

The total cost of the new road capacity proposed by the Reason Foundation study is $5.7 billion, nearly all of which could be funded without taxpayer dollars using the projected toll revenues. The time savings resulting from reduced traffic congestion along with lower operating costs and fewer accidents would save the area $13.25 billion over 20 years. Thus, the savings would be 2.33 times as large as the investment.

The proposed queue jumps would not toll existing arterial roads, but would build new overpasses or underpasses along busy corridors like Cypress Lake Drive/Daniels Parkway. The study examined that corridor in detail, identifying specific queue jumps and estimating their costs. The entire corridor would cost $277 million to build. The “net present value” of toll revenues is estimated at $285 million, suggesting such corridors could be self-supporting.

Paying for the Transportation System We Need

bob.poole@reason.org (Robert Poole) — Thu, 12 Feb 2009 15:45:00 EST

I am taking part in a discussion at National Journal's Transportation blog about 'how we'll pay for the transportation system we need.'

I agree with several others who have suggested that the basic principle should be “user-pays.” But there are quite a few different ways to interpret that principle. I recommend that we distinguish between two different things that users of the transportation system should pay for: the infrastructure they use and the externality effects they impose on unwilling others.

For the former we should have user charges, analogous to the payments we make to other network utility providers—electricity, gas, water, cable, etc. These charges should cover the costs of building, operating, maintaining, and ultimately replacing the infrastructure used. They make it possible for the infrastructure provider to remain solvent as a “going concern,” providing reliable services to its customers. And this should be the case whether the provider is an investor-owned company operating under some kind of long-term franchise or concession, or a public-sector toll authority. Both are businesses, and should operate as businesses.

For externalities, government should play the key role, via taxes on the “bads” produced in the course of people using the infrastructure. In the case of highways and rail systems, those bads include noise, conventional tailpipe emissions, and greenhouse gases (GHGs). For noise, the most efficient solution is probably for the infrastructure provider to be held accountable for mitigating noise externalities (as done today via sound walls, which could be more effective than typical US practice—see Japan for a much better model). Federal regulation has worked pretty well for conventional tailpipe emissions, which continue to decline in importance as the auto and truck fleets turn over. For GHGs, the most economically neutral approach is a carbon tax, which should apply across the board to all forms of energy use.

Making this kind of separation between charges for using infrastructure (utility bills) and taxes (or regulation) to mitigate externalities is far wiser than trying to mix the two into some kind of all-purpose tax on driving, intended (by some) to force dramatic shifts in mode share. It would be foolish, as some are now proposing, to start making transportation funding depend on proceeds from a carbon tax or cap-and-trade system. The purpose of those taxes is to reduce the thing being taxed, ideally eventually to zero. That’s hardly a sustainable basis on which to build 21st-century funding for transportation.

A true charge per vehicle mile traveled (VMT) should vary between cars and heavy trucks, since the latter take up a lot more space per vehicle and do vastly more pavement damage than cars. It should also vary by time and place, as a powerful tool used by the infrastructure provider to ensure high-quality service (just as 21st-century electricity providers will do via differential pricing enabled by smart meters). But a true VMT charge should not vary by engine size or SUV vs. mini-car. Those factors have nothing to do with the infrastructure and everything to do with externalities, the proper domain of taxes and/or regulation.

In a VMT-charge world of the kind I’m suggesting, my guess is that there would be a lot of urban congestion pricing, which would mean a lot of urban driving would be more costly to drivers, at the point of use, than it is today. That would certainly motivate shifts to other modes, shifts of some trips out of peaks, etc. That would make transit relatively more competitive with driving (especially express buses on premium-priced lanes), but it may not, by itself, be enough to make transit self-supporting.

But here’s what might do that. Convert whatever public subsidy is provided to transit operators (today frequently a monopoly provider) into transit vouchers, available to households below a certain income level. Deregulate the provision of transit, so that transit users have more choices, and so that the former transit monopoly must compete for business. Allow transit providers to charge fares based on their costs, to everyone except those using vouchers. This set of changes, I predict, would stimulate considerable innovation in urban transit. I have no idea if it would eventually eliminate the need for taxpayer subsidy; if not, urban-area transit sales taxes would still be needed to close the gap (including paying for the transit vouchers). But I see no reason why the customers of road utilities should be the ones paying for transit subsidies. A measure to help lower-income people travel should be paid for by all the taxpayers in a given metro area. And except for the poor, transit’s users should be the ones paying for transit.

Texas Announces Winning Bidder on $2B PPP Toll Concession: North Tarrant Express

leonard.gilroy@reason.org (Leonard Gilroy) — Thu, 29 Jan 2009 17:07:18 EST

For those eagerly watching toll road developments in Texas, yesterday brought a significant announcement—the winning bidder was announced for the first of several large-scale PPP toll concessions in the Metroplex. This also happens to be the first Texas toll concession to be advanced in the wake of a partial moratorium on CDAs (Texas-speak for PPP toll concessions) enacted by the Texas legislature in 2007 (SB 792). First, the Texas Transportation Commission announcement:

Today, the Texas Transportation Commission conditionally awarded the private sector team's proposal by NTE Mobility Partners to plan, finance, design, construct, operate and maintain 13 miles of Northeast Loop Interstate 820 and SH 121/183 (Airport Freeway) from Interstate 35W to the SH 121 split in Tarrant County. In addition, NTE Mobility Partners will provide financial and development plans to improve the rest of the corridor. Mobility and air quality in North Texas will greatly improve as this partnership leverages limited gas-tax dollars for an estimated $2 billion initial investment that nearly doubles the existing number of lanes and provides long-term maintenance. Construction on the 13-mile North Tarrant Express corridor would begin in 2010 after financial close on the contract later this year. The project will rebuild the existing I-820 and SH 121/ 183 highways, add two toll-managed "express" lanes in each direction, improve frontage roads and add auxiliary lanes along the corridor. Direct connection, managed lane ramps from north and southbound I-35W to I-820 will also provide mobility improvements to that interchange's bottleneck. [...] The award is conditional until the team's successful financial close which is expected by the end of 2009. In 2010, right of way acquisition and construction will begin. I-820 received environmental clearance from the Federal Highway Administration in December. A public hearing for SH 121/183 is expected for this spring with environmental clearance soon after. [...] NTE Mobility Partners has proposed improvements and long-term operations and maintenance estimated at $2 billion by leveraging up to $600 million in available gas tax dollars. As I-820 and SH 121/183 are the most congested roadways in North Texas, this public-private partnership nearly doubles the capacity and provides seamless mobility from I-35W to the SH 121 split. This is years ahead what limited gas tax dollars could provide. "The North Tarrant Express is a high priority project for the region's mobility and air quality conformity plans. Along with the LBJ Project and DFW Connector, these projects will provide a framework of key transportation improvements for North Texas' drivers in the coming years," said Dallas City Councilwoman Linda Koop, chairwoman of the North Central Texas Council of Governments Regional Transportation Council. TxDOT will retain ownership of these state roadways and will conduct regular reviews/audits to ensure a quality project and operations. Through the development of this comprehensive development agreement (CDA), the local cities, Tarrant County and the North Central Texas Council of Governments (NCTCOG's) Regional Transportation Council gave significant input on the North Tarrant Express and on many of the agreement's details, such as the managed lane toll policy. The importance of local involvement will continue to be vital as the rest of the corridor is planned for development.

More details, along with project maps and more, in this TollRoadsNews.com piece. What I see as perhaps the most notable aspects of the North Tarrant Express concession, at least from my initial read:

This is a complicated project, involving the addition of new managed lanes—as well as rebuilding/reengineering existing Interstate & state highways— to some of the most congested chokepoints in the Metroplex. Put simply, projects like these are why you want to have PPPs in your toolbox.
Like the similar I-495 Beltway HOT lanes project underway in Northern Virginia, this is a complex, tricky project with costs that exceed what would be feasible through 100% private financing. Of the $2.0 billion total project, $600 million (roughly 30%) is derived from TXDOT funds. This is a great example of leveraging limited public funds to achieve some major metropolitan mobility goals.
This project will create about 2,000 jobs over the next 6 years, all facilitated by a blend of public, private, and institutional capital in a PPP. Our leaders on Capitol Hill knee-deep in stimulus talk should take note of what can happen when you leverage public dollars, as opposed to traditional PAYGO type spending.
This project represents a key step in rolling out the Metroplex's extensive planned managed lanes network.
The announcement is more proof that PPPs are alive and well both nationally and in Texas. Of course, this deal still has to reach financial close later this year amid tough economic conditions. But I think it still seems fairly significant that the first quarter of 2009 is going to see winning bidders announced on not one, not two, but three major toll concession projects in north Texas.
One of the equity partners in the deal is the Dallas Police and Fire Pension System, who'll invest up to $50 million in the project. (see article here)

I'd highly recommend taking a read through this blog post by the Dallas Morning News' transportation writer Michael Lindenberger, in which he responds to some common reader questions. Here's a sample:

Q: Why can't Texas just build these roads itself, using tax dollars? A: Texas doesn't charge high enough taxes to collect nearly enough money to do so. The LBJ Freeway and North Tarrant Express will together cost about $3 billion to construct, and hundreds of millions more to maintain. Tax dollars are covering about $1.3 billion of the total. TxDOT usually builds about $3 billion a year in construction projects for the whole state. Q: Well, okay, if you have to have tolls, why must a private company be used? Why can't TxDOT collect the tolls, and the profits, itself? A. TxDOT could do that, but it has chosen not to tie up its funds in that way. Consider this: It took a constitutional amendment, plus an all-out press in the Legislature this term, to authorize $5 billion in additional debt. That amount of money would build maybe three or four major highways in Texas.

For more details, visit the North Tarrant Express project homepage. » Reason's Annual Privatization Report 2008 » Reason's Transportation Research and Commentary

The vast gulf between public and private

adrian.moore@reason.org (Adrian Moore) — Wed, 28 Jan 2009 11:08:14 EST

VA has accepted a private proposal to build a new toll bridge in the Norfolk area--full story here. The most interesting this is that the city analyzed this project and decided tolls could only cover 20% of the cost. The private firm came in and figure out that tolls can finance the bridge and a profit!

Transportation Spending Won't Stimulate Economy

info@reason.org (Katie Hooks) — Mon, 26 Jan 2009 13:20:10 EST

In a new column, Reason Foundation's Shirley Ybarra and Anthony Randazzo write:

In the midst of a sluggish economy, nearly every state is facing a significant budget crisis. California's 2010 deficit is expected to be $25 billion to $41 billion. New York, New Jersey, Illinois, Ohio, Florida, and many other states expect at least $1 billion each in red ink next year. As state legislatures grapple with these deficits, it is no secret many are counting on money from federal stimulus package to fill their gaps. Transportation is widely viewed as a key component for any stimulus, and the current House proposal doesn't skimp when it comes to roads and transit. However, even with stimulus assistance, a paradigm shift towards private sector participation in transportation funding is needed if states want to solve the underlying problems that caused this mess and avoid additional trouble in the long-term.

Whole column here. Reason's Samuel Staley and Adrian Moore on Infrastructure Spending here.

national poll: tax me more?

sam.staley@reason.org (Samuel Staley) — Thu, 22 Jan 2009 08:21:28 EST

That's one interpretation of the findings from a national poll commissioned by the infrastructure lobbying group Buildling America's Future. Frank Luntz, a respected Republican pollster, asked 800 registered voters about investments in core infrastructure. Their response? Near unanimous concern--94 percent--about the state of America's infrastructure. The general public is concerned about bridges falling down, pot-holed roads, and crumbling school buildings. As Luntz summarizes in an LA Times column:

Fully 84% of the public wants more money spent by the federal government -- and 83% wants more spent by state governments -- to improve America's infrastructure. And here's the kicker: 81% of Americans are personally prepared to pay 1% more in taxes for the cause. It's not uncommon for people to say they'd pay more to get more, but when you ask them to respond to a specific amount, support evaporates. (That 74% of normally stingy Republicans are on board for the tax increase is, to me, the most significant finding in the survey.) This isn't "soft" support for infrastructure either. It stretches from Maine to Montana, from California to Connecticut. Democrats (87%) and Republicans (74%) are prepared to, in Barack Obama's words, put skin in the game, which tells you just how wide and deep the support is. And Americans understand that infrastructure is not just roads, bridges and rails. In fact, they rated fixing energy facilities as their highest priority. Roads and highways scored second, and clean-water treatment facilities third.

This environment favoring bigger government also plays well into progressive politics. Most people want a heavier hand in determining spending priorities, unwilling to leave it up to elected officials alone to make the call on where the investment is directed.

New jobs and potential economic recovery are an important part of the infrastructure rebuilding effort, but if Washington cares about what Americans really want, Congress and the administration must establish four core stimulus principles to protect American taxpayers: Accountability comes first. Next is transparency (24% of those polled put it at the top of their lists). Americans see themselves as shareholders in their country, and they firmly believe that they have the right to know their money is spent wisely, and expect to see the evidence on an ongoing basis. The data also show significant support for a third principle -- setting public priorities through citizen input (13% ranked it their highest priority, which means that the people, not just the politicians, should have their say). And finally, 16% rank measurable results as the highest priority when it comes to government investment. Will the billions of dollars spent make a quantifiable difference in the daily lives of Americans in all 50 states?

Given these poll results, President Obama is as much a man of his times as a man changing the times. The America public, unfortunately, seems primed for another dose of "government knows best" progressivism, as long as they feel they are at the helm. Unfortunately, history, and human nature, show they (we) will come up short--again. The question will be whether we can undo the damage after we allow Leviathan to climb to yet another plateau in its march away from freedom and liberty.

Galvin Project to End Congestion: Advisory Board

Thu, 01 Jan 2009 00:00:00 EST

* Links may direct you to outside sites

Al Appleton
Senior Fellow, Regional Plan Association

Rob Atkinson
President, Information Technology and Innovation Foundation

Peggy Catlin
Director, Colorado Tolling Enterprise and Deputy Executive director, Colorado Department of Transportation

Professor Robert Cervero
College of Environmental Design, University of California, Berkeley

Professor Randall Crane
Urban Planning, University of California, Los Angeles

Professor Elizabeth Deakin
City and Regional Planning, University of California, Berkeley, and Director, University of California Transportation Research Center

Professor Max Donath
Director, Intelligent Transportation Systems Institute, University of Minnesota

Robert Dunphy
Senior Resident Fellow Transportation, Infrastructure, Urban Land Institute

James Ely
Director, Florida Turnpike Enterprise
Vice President, International Bridge, Tunnel & Turnpike Assn

David W. Fleming
Of Counsel, Latham & Watkins, LLP

Professor David Gillen
Transportation Policy, University of British Columbia

Professor Genevieve Giuliano
Director, METRANS Transportation Center, University of Southern California

Professor Peter Gordon
School of Policy, Planning, and Development, University of Southern California

D.J. Gribbin
Macquarie

Gary Groat
Director of Project Development, Fluor

Professor David Hartgen
Transportation Studies, University of North Carolina, Charlotte

Patrick D. Jones
Executive Director, International Bridge, Tunnel and Turnpike Association

Tony Kane
Director, Engineering and Technical Services, American Association of State and Highway Transportation Officials (AASHTO)

Steve Lockwood
Principal Consultant, PBConsult

Wayne Lusvardi
Valuation Consultant

Jim March
Office of Policy and Governmental Affairs, Federal Highway Administration

Joel Marcuson, PE
Traffic Engineering/Intelligent Transportation Systems Expert, Jacobs Engineering

Nancy McGuckin
Travel Behavior Analyst, Consultant

Professor Michael D. Meyer
School of Civil & Environmental Engineering, Georgia Institute of Technology

Professor James Moore
Department of Industrial and Systems Engineering, University of Southern California

John Njord
Executive Director, Utah Department of Transportation

Ken Orski
Editor/Publisher, Innovation Briefs

Mary Peters
U.S. Secretary of Transportation

Alan Pisarski
Transportation consultant

Steve Pontell
President, LaJolla Institute

Pete Rahn
Director, Missouri Department of Transportation

Jon Ramirez
Raytheon Company

Darrin Roth
Director of Highway Operations, American Trucking Association

Gabriel Roth
Civil Engineer and Transport Economist

Tom Rubin
Transportation Consultant

Phillip Russell
Director, Texas Turnpike Authority Division

Peter Samuel
Editor, TOLLROADSnews

William E. Simon, Jr.
Co-Chairman, William E. Simon & Sons, LLC

Professor Ken Small
Department of Economics, University of California, Irvine

Professor Pravin Varaiya
Department of Electrical Engineering and Computer Sciences, University of California, Berkeley

Professor Chip White
Transportation and Logisitics, Georgia Institute of Technology

Geoff Yarema
Partner, Nossaman, Guthner, Knox & Elliott

More Demagoguery on Indiana Toll Road

leonard.gilroy@reason.org (Leonard Gilroy) — Wed, 31 Dec 2008 12:36:46 EST

You'd think that Gov. Daniels' drubbing of Jill Long-Thompson, whose campaign platform seemed to revolve around a naive hostility to Daniels privatization initiatives, in the November election would have taught politicos a lesson—anti-privatization demagoguery doesn't translate into political support—but apparently not. Despite the fact that the Indiana Toll Road stopped reimbursing local fire departments for services on the tollway years before it was privatized, now some opportunistic folks have lined up to demand a cut from the private operator:

The private operators of the Indiana Toll Road would have to pay fire departments that respond to collisions that occur along the northern Indiana interstate under a bill proposed by two state senators. State Sen. Joe Zakas, R-Granger, said it is unfair that highway operator ITR Concession Co. is making money off the roadway, but not paying property taxes. "Homeowners and businesses pay for fire protection by paying property taxes. It doesn't seem fair for Hoosiers paying property taxes to cover emergency services on the Toll Road, thereby increasing profits for the Toll Road operation and bolstering pension funds in Australia," he said. Zakas is co-sponsoring the bill with state Sen. Marlin Stutzman, R-Howe.

Hmmmm...I guess that under the proponents' logic, then it was indeed fair for Hoosiers to pay property taxes to cover emergency fire services when the ITR was under public operation, but somehow now it's not. And I guess that they also conveniently forget that the $3.85 billion upfront payment for the ITR lease is being used to fund a multi-year, multi-billion-dollar statewide transportation construction program (Major Moves)— in other words, that's $3.85 billion in statewide tax and fee increases avoided through the lease. This is nothing more than an thinly-veiled, opportunistic cash-grab play with a splash of anti-private, anti-foreign demagoguery mixed in. Smells like an ugly, toxic brew to me—hopefully the sponsors' colleagues in the legislature will smell the same thing and move on to more important issues, like closing the state's $763 million budget gap, advancing the Indiana Commission on Local Government Reform's bold reform package, etc., etc.?

Chesapeake, VA Pursuing PPP Toll Bridge

leonard.gilroy@reason.org (Leonard Gilroy) — Wed, 31 Dec 2008 11:55:17 EST

In addition to the Midtown Tunnel/MLK extension PPP project I discussed here the other day, the city of Chesapeake, VA is evaluating an unsolicited proposal to rebuild the recently-closed, 80-year old Jordan Bridge across the Elizabeth River through a PPP. According to TollRoadsNews.com:

A bridge-builder and private investors are promising to do what City officials in Chesapeake Virginia thought was impossible - replace a decrepit 80 year old draw bridge with a modern high level structure at no cost to taxpayers. And they say they can get the new bridge open within 18 months. The old Jordan Bridge, a multi-truss iron span close by the water of the Elizabeth River with a high lift span for shipping was permanently closed to vehicular traffic the lift span in the 'up' position November 8, after progressively more restrictive weight limits were imposed in recent years to avert a collapse of the heavily rusted ironwork. The investors Figg Bridge well-known bridge builders, and Britton Hill Partners LLC (BHP) a private investment company are asking to be granted title to the old bridge and the land it stands on in return for an undertaking to replace it with a modern high level bridge. This is a replay of the way the original bridge was built in the mid-1920s and the way most major bridges were built in the US in 19th century - by investors who bought land and owned the assets outright and operated them as a transportation business. [...] City of Chesapeake mayor Alan Krasnoff has welcomed the investor offer saying it is a "wonderful Christmas present" to the people of the region who with the closure of the old lift bridge have been facing increasingly circuitous journeys and greater congestion on parallel routes. The Jordan Bridge connects southern Norfolk with southern Plymouth over an estuarial section of the Elizabeth River that is 600m (2000ft) wide in an industrial and port area. Norfolk Naval Ship Yards employing some 15,000 people are located immediately on the west side of the bridge. The river forms part of the Intra Coastal Waterway and the old bridge was typically raised 20 to 30 times per day (10,000 lifts/year) for about 22,000 vessel passages a year (an average 60/day) seriously limiting its availability to car traffic. The allowed weight on the bridge was progressively reduced and for the last 12 years was posted at 2.7t (6000pds, 3 short tons). So worried was the City about the bridge collapsing from an overweight vehicle after receiving the last engineering report that from the early summer they posted an inspector each end of the bridge to turn back overweight vehicles. Under their proposal to the City the investors would take full responsibility for financing, building and operating the new bridge, including purchase of some extra right of way needed and would remove the existing abandoned bridge. As joint owners and operators of the new bridge they would have the right to the tolls. They would be committed to expanding the capacity of the bridge in line with demand.

Many more details here. Yet another example of PPPs coming to the rescue and delivering new solutions to tricky challenges. And though the bulk of transportation PPP discussion focuses on the state level (necessarily, given the scale of state road and bridge systems), this article is a nice reminder that local governments also face similar opportunities to upgrade and modernize their transportation systems through partnering with the private sector. Let's break it down and get real for a minute. If I'm an official in Chesapeake, and some consortium comes in and says "you guys have a dead bridge and just lost a river crossing, why don't we build you a new one? and btw, we'll pay for it."—at that point, I'm all ears. But officials elsewhere shouldn't just sit around and wait for the private sector to come calling. They should be mining their balance sheets for assets to divest, that need replacement, etc., and then start courting investors/builders/operators. Let's go guys (clap clap)—the budget shortfalls aren't getting any smaller, nor are the infrastructure needs. » Reason's Annual Privatization Report 2008 » Reason's Transportation Research and Commentary

Miami HOT lanes a national sensation

adrian.moore@reason.org (Adrian Moore) — Wed, 31 Dec 2008 06:14:38 EST

The latest HOT lanes project, where buses, carpools and hybrids ride for free, but drivers in other cars can pay a toll to avoid traffic, is a big hit. This AP article about the Miami lanes ran in hundreds of papers around the country. Attorney David Kubiliun is a typical South Floridian: He lives in a suburb, works in downtown Miami and spends several hours a week sitting in maddening traffic on Interstate 95. Earlier this year, his 14-mile slog home took 50 minutes out of his day, if there weren't any accidents. "It was murder," he said. But his evening commute recently got a whole lot better, for a price. Drivers like him can pay anywhere from 25 cents to $6.20 to drive in a new express lane for six miles at or above 45 to 50 mph, guaranteed. Now Kubiliun gets home in 20 minutes. "That thing's a godsend," he said. "I can even make it to my kid's baseball practice."