Surface Transportation Newsletter #122

US congestion less than in Europe and Australia, Managed lane networks taking shape, Competing bills on infrastructure finance

In this issue:

Global Data Put US Traffic Congestion in Perspective

Would you believe that of the 24 most congested urban areas in high-income countries, only four are in the United States? That is among the findings of a recent analysis by navigation services provider Tom Tom. The Amsterdam-based company is now producing its own travel time index, similar to the well-known TTI reported on annually for US metro areas by the Texas A&M Transportation Institute, which gives the ratio of travel time during peak periods and off-peak periods. (Thus, a travel time index of 1.33 means it takes 33% longer to make the same trip at rush hour.) Tom Tom's report for the second quarter of 2013 provides such indices for each of the large urban areas in New Zealand, Australia, Canada, Western Europe, and the United States. The average of those indices is highest for New Zealand, followed by the averages for Australia, Canada, and Western Europe, with the United States bringing up the rear.

Next let's look at individual urban areas, regardless of country. The 24 most-congested urban areas in wealthy countries are as follows:

Marseille

1.40

Palermo

1.40

Vancouver

1.36

Rome

1.36

Paris

1.36

Stockholm

1.36

Los Angeles

1.35

Sydney

1.35

Brisbane

1.34

Auckland

1.34

San Francisco

1.32

Christchurch

1.32

Lyon

1.31

Nice

1.31

Stuttgart

1.30

Hamburg

1.29

London

1.29

Perth

1.29

Adelaide

1.29

Honolulu

1.28

Seattle

1.28

Berlin

1.28

Melbourne

1.28

Wellington

1.28

I won't make you to read the list of the 22 least-congested rich-country urban areas, but only seven of them are outside the United States (Seville, Valencia, Malaga, Bern, etc.). The 15 least-congested metro areas in this country include Cincinnati, Birmingham, Rochester, Louisville, Phoenix, Kansas City, and Indianapolis.

At first glance, these results seem counter-intuitive—or at least contrary to what is taught in urban planning schools and believed by many transportation planners. The highly congested non-US urban areas generally have extensive mass transit systems and traditional central business districts—i.e., a monocentric urban form. The much less congested US urban areas are for the most part exemplars of what planners derisively call urban sprawl—i.e., multi-centric urban form, limited transit service, larger overall area, and significantly lower average densities. By the conventional wisdom, metro areas like Vancouver, Rome, Paris, Sydney, Hamburg, etc. should have lower traffic congestion than sprawling US urban areas like Phoenix, Indianapolis, and Kansas City.

Demographer Wendell Cox, who brought the TomTom findings to my attention, points out that there is, in fact, a strong association between higher densities and higher traffic congestion. But also, "Residents of the United States benefit because employment is more dispersed, which tends to result in less urban-core-related traffic congestion. Lower density and employment dispersion are instrumental in the more modest traffic congestion of the United States."

Cox's NewGeography report on these findings is online at: www.newgeography.com/content/004048-new-zealand-has-worst-traffic-international-data.

» return to top

Managed Lanes Networks Gaining Traction, as Projects Proliferate

A small but growing number of very large US metro areas are moving toward the creation of networks of priced managed lanes, generally including incentives for car-pooling. Miami and San Francisco are among the leaders, with continued study in Los Angeles and Washington, DC.

As 2013 draws to a close, the Miami urbanized area seems to be moving fastest to implement such a network. The initial Express Lanes on I-95 in Miami have demonstrated large benefits for auto commuters and express bus service alike, building public support for expanding the concept to other expressways. Under construction and set to open in 2014 are the next two projects: Phase 2 of the I-95 project extending the Express Lanes nearly 14 miles to Fort Lauderdale, and the reversible express lanes being added to a rebuilt I-595 near Fort Lauderdale. Florida DOT has green-lighted two more projects to begin early in 2014, adding new express lanes to I-75 in Broward County and to the north-south portion of the Palmetto Expressway in Miami-Dade County. Florida's Turnpike will be adding variably-priced express lanes to a major portion of its Homestead Extension in southern Miami-Dade County. Future projects not yet through the planning and approval process include extending the I-95 express lanes further north to Boca Raton and eventually West Palm Beach and a Miami-Dade Expressway Authority project to add express toll lanes to its congested Dolphin Expressway. (For more details, go to www.tollroadsnews.com/node/6711.)

Florida DOT finalized its statewide managed lanes implementation plan in July 2013, providing common ground-rules for projects not only in Miami but also Jacksonville, Orlando, and Tampa. The major project getting under way in Orlando is for 20 miles of express lanes for congested I-4.

Detailed plans for a region-wide managed lanes network in Atlanta have been scaled back due to political objections and limited funding, but two key building blocks are moving forward. In the northwestern suburbs, a contractor has been selected and a TIFIA loan approved for the $834 million project to add reversible managed lanes to I-75 and I-575. And in the southeastern suburbs, another project will add managed lanes to that portion of I-75.

In the Washington, DC metro area, a two-year study by the Transportation Planning Board evaluated three different pricing options to deal with the region's chronic traffic congestion. By far the most popular was a 500-mile network of priced managed lanes on all the major freeways, including express-bus/BRT service. It won 60% support from 300 metro-area residents who were engaged in "extended conversations" with TPB staff during the project. By contrast, only 10% supported a plan to use in-vehicle GPS boxes to charge per mile for using the freeways, while a plan for cordon tolls to enter business districts won 50% support (but also strong opposition). The study also found overwhelming agreement (91%) that congestion is a critical problem for the region. The TPB "is advancing the new version of the express toll lanes scenario as one of two long-term strategies in its Regional Transportation Priorities Plan.

The Chicago metro area is not as far along, but the Illinois DOT is seriously considering adding express toll lanes to the Eisenhower Expressway. As of this fall, it is still soliciting public feedback on four alternatives for the lane-addition project. In addition to express toll lanes, they include doing the new lanes as general-purpose lanes, as HOV lanes, or as part of converting the entire expressway to a HOT tollway.

San Francisco, with several express toll lane projects already in operation, is taking the first major steps toward its long-planned managed lanes network. In September it began procurement of toll systems for the first 90 miles of a projected 270-mile initial network. The Bay Area Infrastructure Financing Authority (a joint powers authority formed by the MPO and the Bay Area Toll Authority) is handling the procurement. The initial projects will be 34 miles on I-880 and two bridge approaches in Alameda County, 12 miles on I-680 in Contra Costa County, and 11 miles on I-80 in Solano County. The single-lane-per direction express lanes will be mostly conversions of existing HOV lanes, and these initial projects are planned to be in operation by 2016 (I-680) and 2017 (I-880 and I-80). (Details at www.tollroadsnews.com/node/6746.)

The Los Angeles area MPO has not yet officially reached consensus on a five-county managed lanes network, but additional pieces of what will be the network are in various stages of moving forward. Getting under construction early in 2014 will be the $1.3 billion widening of SR 91 in Riverside County, extending the existing express lanes from the Orange County line eastward beyond I-15. Riverside County plans a similar project on I-15 itself, and San Bernardino County is debating a plan to add managed lanes to I-10 and I-15. Orange County officials are struggling to gain approval on a major project to add managed lanes to a long stretch of I-405, from the John Wayne Airport to the Los Angeles County line. And in LA County itself, LA Metro's first highway PPP project includes adding managed lanes to a stretch of I-5 in the northern part of the county.

Other managed lane network plans are in various stages in Dallas-Fort Worth, Houston, San Diego, and Seattle.

» return to top

Competing Infrastructure Finance Bills

Last month Sens. John Warner (D, VA) and Roy Blunt (R, MO) and introduced the BRIDGE Act, which would create a new Infrastructure Financing Authority somewhat like the one proposed last spring by freshman Rep. John Delaney (D, MD). Both are a welcome step away from the rather wooly "national infrastructure bank" proposals of recent years, some of which combined grants and loans, and often stretched the definition of infrastructure considerably. My worry about those "bank" proposals was that they would likely end up making politicized decisions, creating a new drain on federal taxpayers via some combination of grants and soft loans (with a low likelihood of being repaid). While such a "bank" would have obvious political benefits, it's the last thing this country needs given the still out-of-control federal budget, with long-term deficit projections adding endlessly to an unsustainable national debt.

The proposed Infrastructure Financing Authorities are intended to be quite different. Both versions emphasize management by non-civil-servant financial professionals and the provision of loans only, and only for nationally significant infrastructure projects with an emphasis on P3 delivery. Both appear to have been inspired by the successful TIFIA program at FHWA.

The November issue of Public Works Financing includes a handy side-by-side comparison chart of the two bills, as introduced. In going through those points, I gave check-marks to four features I think are better in Warner/Blunt and four that I think Delaney does better. The latter bill has a more innovative approach to obtaining the initial capitalization (though its preliminary scoring is worse) and its board would likely be more independent of politics, since Delaney's IFA would be a private nonprofit versus Warner's government corporation similar to the ExIm Bank.

But the most important difference concerns P3s. Although Delaney's bill calls for at least 25% of the projects to be P3s, its loans would go only to governments. By contrast, Warner/Blunt model their loans on TIFIA's, which can be made directly to P3 developers, who are the ones financing and delivering the projects. And that, as many have pointed out, is how P3s shift risk and repayment obligations to investors, rather than taxpayers. And that, in turn, should weed out boondoggle projects. In addition, Warner/Blunt limits IFA loans to a maximum of 49% of the project, as TIFIA does, to make clear that these are intended as subordinated loans, not the primary financing. (And I still maintain that Congress should go back to the previous TIFIA limit of 33%, both to ensure a more viable business model and to make the available loan dollars go further.)

It's not clear what the prospects for these two bills are. The PWF article says that Warner and Delaney have been unable to find common ground, which strikes me as unfortunate. It also reports that a companion bill to Delaney's HR 2084 is expected to be introduced in the Senate soon that will allow for direct loans to P3 developers, as in TIFIA and in S 1716. And that might also make it easier to combine the best features of both bills into something that could get passed next year.

» return to top

What to Make of P3 Toll Road Struggles?

I've received several queries about a Nov. 21st front-page story in the Wall Street Journal about financial difficulties at a number of U.S. toll-concession projects. Besides noting the bankruptcies of the South Bay Expressway in San Diego, Virginia's Pocahontas Parkway, and American Roads (a holding company for the Detroit-Windsor Tunnel and four Alabama toll roads), the article pointed to possible financial restructurings of the SH 130 toll road between Austin and San Antonio and of the Indiana Toll Road. In nearly every case the problem stems at least in part from overly optimistic traffic and revenue forecasts made prior to the start of the Great Recession in 2008. In several cases, the financial structure appears to be overly aggressive, with large payments coming due in the next year or two that exceed what is likely to be available from toll revenues and reserve funds.

Not all P3 toll roads are in such difficulties, which is hard to discern from the WSJ article. Not mentioned at all is the 91 Express Lanes in Orange County, CA—the country's first toll concession and one whose traffic and revenues remain robust (though it had been in operation nearly 13 years by the time the 2008 crunch began). Mentioned only briefly or not at all are the Chicago Skyway, the Dulles Greenway, the I-495 Express Lanes on the Beltway in northern Virginia, the Northwest Parkway in Colorado, and the 407ETR in Toronto. Several of those have less than projected traffic, but to the best of my knowledge, none is in serious distress—and the 407 in Toronto is thriving. In addition, though not a P3 concession, the Inter County Connector in Maryland recently completed its first year of tolled operations, with toll revenue almost exactly at forecast level, and 40,000 vehicles per weekday on average.

It's well-known that start-up toll roads are relatively risky endeavors, since highly accurate traffic and revenue forecasts are still more of an art than a science. And that's one reason I have long advised legislators and state DOTs against saddling taxpayers with traffic and revenue risk. One of the most important benefits of long-term toll concessions is shifting such risks (along with the risk of construction cost overruns, late completion, and operating & maintenance risks) to willing investors. I was interviewed about this issue by David Mildenberg for a Bloomberg article published on Nov. 27th, "Private Toll Road Investors Shift Revenue Risk to States." It documented the recent trend of companies that compete for mega-project concessions to push for availability-pay concessions rather than toll concessions. Both are long-term agreements in which construction, completion, and O&M risks are transferred, but in these newer concessions the company is paid by the state over the life of the agreement, with only minor variations depending on how available the lanes are 24/7 and what condition they are in. As Mildenberg's article points out, that leaves the largest risk—traffic and revenue--with the state, aka the taxpayers.

I've written about this point for several years, because one of the long-standing problems with US highway infrastructure is poorly justified projects that get approved and built more for political than for economic reasons. If a realistic projection of traffic and revenues doesn't come close to covering the capital and operating costs of a major highway or bridge, there's a serious question whether it's a wise investment. "Economic development" is usually trotted out in such cases, a kind of "field of dreams" premise. But let's face it: this country has a large and growing need for productive highway investment (such as rebuilding and modernizing the Interstates and building urban express toll networks) and a serious shortage of funding to meet those needs. Requiring such projects to pass a credible return-on-investment test is a way to separate the high-value investments from the cats and dogs.

To be sure, there are cases where, for policy reasons, not charging a toll on a new facility intended to divert traffic from other facilities can make sense (e.g., the Port of Miami Tunnel, being developed as a pure availability-pay concession).  And there can be cases where a hybrid toll/availability structure is the best that can be done, due to specialized circumstances. But those should be the exceptions, not the rule. If this country shifts to a largely availability-pay model, we will lose a powerful means of ensuring the wisest allocation of inevitably limited highway investment funds.

Incidentally, Moody's early this month changed its outlook for toll roads from negative to stable. That change was based on the recovery of traffic growth, which Moody's projects as averaging 1.5% for 2014 for the toll roads it rates.

» return to top

WRDA Bills Offer Little Real Change

The House and Senate each have passed bills to reauthorize the Water Resources and Development Act (WRDA), which administers the federal programs to assist ports and inland waterways, among other things. I reported earlier this year stirrings of interest in portions of the waterways community in thinking outside the box. Basically, some of those who depend on inland waterways to ship bulk commodities (such as soybeans) are fed up with both under-funding of modernization of obsolete locks and dams and with the lack of financing (as opposed to cash-based annual funding) inherent in the program.

When I learned several months ago that the Senate bill contained a Water Infrastructure Finance & Innovation Act provision, modeled after TIFIA in surface transportation, I was intrigued. But it turns out this is written to apply only to certain water supply, wastewater treatment, and flood-control projects, not to the inland waterways system. Then I heard that both bills contained pilot programs for some kind of P3 delivery of projects, and again my hopes were raised. But after reading an assessment of the actual content of the bills by the Congressional Research Service, dated Nov. 5, 2013, I can find nothing to cheer about.

Both bills would require the Army Corps of Engineers to set up a pilot program that could be used on up to 15 previously approved waterways projects. Instead of the Corps itself doing the projects, "nonfederal or private entities" would be contracted to carry them out, to be paid upon completion out of the "unobligated federal balance for the project." In other words, at best this would be design-build contracts paid for in the usual 50% general fund/50% Inland Waterways Trust Fund monies.

In other words, there would be no introduction of project finance to expand the amount of investment going into modernization projects, with some kind of direct user-fee revenue stream to provide for debt service payments. That, after all, is how the Panama Canal expansion is being paid for, and applying such financing ideas to U.S. lock and dam modernization had been suggested in a November 2012 report by the Texas A&M Transportation Institute, "New Approaches for U.S. Lock and Dam Maintenance and Funding." That report was funded by none other than the Soy Transportation Coalition, a key user of the inland waterways. Somehow, Congress failed to get the message. At least the House bill calls for the Corps to do several revenue studies, "including a study of the feasibility of construction bonds and a study on potential user fees and other revenue sources."

If you can believe it, the Senate bill would make waterways funding even less user-paid than it is today. The largest single project on the Corps' waterways agenda is the Olmsted lock and dam modernization. With its huge cost overruns, this still far-from-completed project has sucked up large fractions of each annual waterways capital budget, postponing other needed improvements. So the Senate bill would "solve" this problem by funding Olmsted's completion entirely from general funds (i.e., you and me taxpayers) instead of the usual 50% taxpayers/50% users. The House bill "only" increases the taxpayer share for Olmsted to 75%. And CRS points out that the Senate bill "also would raise the threshold for cost sharing for major rehabilitation investments on inland waterways, thereby making the General Fund responsible for a larger share of the expenditures." I can only scratch my head and ask, "What General Fund are you talking about?"

For a dramatic contrast, look at what is happening in France. After seven years of planning and a two-year procurement process, French waterways agency VNF announced the award of a 30-year design-build-finance-operate-maintain concession to a division of Vinci Concessions to replace 29 obsolete locks and dams. The cost of the renovations will be $349 million and take place over six and a half years of the 30-year concession. Alas, waterways user fees in France do not fully cover operations, so the project is structured as an availability-pay concession. Several similar projects are being planned by VNF.

» return to top

Further Thoughts on National Freight Policy

My article last issue on the ongoing efforts to develop a National Freight Policy elicited some feedback from Jack Wells, chief economist at the U.S. DOT. He first offered several corrections to my rendition of who is to do what. MAP-21 establishes a National Freight Policy (hence, we now have one), but it does not call for the DOT to establish an overall national network for goods movement (though that's what many advocates are calling for)—just a highway network, and DOT recently released for comment a first draft of that. And MAP-21 did not establish a new program for multimodal freight projects, but did reauthorize the Projects of National and Regional Significance program, which is not limited to freight projects. I appreciate these clarifications.

The majority of his comments, however, dealt with justifying a larger role for the federal government in freight planning than I accepted. For example, even with investor-owned freight railroads, there can be general public benefits from projects like the Alameda Corridor that benefit highway users by eliminating long delays (and accidents) at grade crossings. I agree, and have supported shared public-private funding in such cases. On whether or not the federal government needs to play a funding role in such projects, he and I differ.

On my larger point about the difficulty of forecasting the future over long periods (seemingly inherent in a National Freight Strategic Plan), he agreed that a plan adopted in 1955 would have failed to anticipate intermodal cargo containers, just-in-time logistics, Fedex, etc. But he points out that transportation infrastructure lasts a long time, and that the National Freight Strategic Plan will be updated every five years. He also notes that there have been many complaints over the years that some state DOTs (and MPOs, I will add) have given short shrift to goods movement. I agree, but think that problem is on the way out without federal help, as DOTs and MPOs have gotten a lot more tuned in to the importance of goods movement and its required infrastructure.

Ultimately, I think we have a philosophical difference here. Jack Wells has a lot more confidence than I do that federal planning, guidance, and funding will be carried out strictly on the merits (economic value added) of various proposed infrastructure investments. Despite many well-educated and well-meaning people in government (and I've met many over the years), again and again interest-group politics ends up warping the process, creating winners and losers based on which group has the most clout. No transportation infrastructure planning process will make 100% right judgments, but I would rather trust the decisions made by market participants than by the net result of interest-group horse-trading, whether it's in Congress or on a stakeholder body advising a federal or state DOT.

It will be interesting to watch what kind of feedback DOT gets on its draft national freight highway network. I expect there will be considerable lobbying to add Interstate and NHS corridors that were considered less-strategic than those included in the draft. And if we ever did get to a comparable national ports plan or national waterways plan that decided which ports or waterways are strategic and which are not, I can't begin to imagine the lobbying and horse-trading that would ensue.

» return to top

Upcoming Conferences

Note: I don't have space to list all transportation conferences that might be of interest. Below are those that I or a Reason Foundation colleague are taking part in.

Transportation Research Board 93rd Annual Meeting, Jan. 12-16, Washington, DC (Robert Poole speaking). Details at: www.trb.org/AnnualMeeting2014/annualmeeting2014.aspx

Global Financial Summit, Feb. 5-8, Atlantis Resort, Nassau, Bahamas (Robert Poole speaking). Details at www.freedomfest.com/gfs.

» return to top

News Notes

$5 Billion Road/Rail Tunnel for Brisbane. The Queensland (Australia) government has announced a double-deck tunnel for Brisbane. Within its 15-meter (49 ft.) diameter there will be two bus lanes on the upper deck and two commuter rail lines on the lower deck. The $5 billion project was judged to provide better value than two separate projects—a $5.2 billion rail tunnel and a $2.8 billion "suburbs to city" bus project. The project will require the largest tunnel boring machine used to date in Australia.

Beltway Toll Lanes are Toyota/Honda Lanes. Figures released by Transurban in connection with the first anniversary of their express lanes on I-495 (Capital Beltway) in northern Virginia debunk the idea that these would be "Lexus Lanes," The top vehicle makes using the express lanes turn out to be Toyota (17%), Honda (15%), Ford (8%), and Nissan (5%).

Tampa-Orlando HSR "Still a Loser," Says Study Update. Former Republican governor Charlie Crist, in announcing his candidacy as a Democrat seeking to replace Florida Gov. Rick Scott, used the occasion to criticize Scott's 2011 decision to turn down federal funds for an unusually short high-speed rail line between Orlando and Tampa. Since Scott drew on a Reason Foundation study that questioned many of the original assumptions on which the project was based, the study's co-authors have released an update, questioning more recent (even more optimistic) projections in a study commissioned by Florida DOT. The new study is posted at http://reason.org/studies/show/still-a-loser-the-tampa-to-orlando.

Converting CO2 into Fuel. MIT Technology Review reports on research at the University of Illinois in Chicago on novel catalysts that can turn CO2 into carbon monoxide, which in turn can be made into fuels. Conventional methods of doing this are very energy-intensive, but the new catalysts make the process both faster and cheaper. The research was reported in the journal Nature Communications.

Amtrak Rethinks Northeast Corridor Top Speed. Although Amtrak had previously announced plans to jointly procure (with the California High Speed Rail Authority) 220 mph locomotives, its recently released draft specifications for locomotives to replace those on its Acela Express trains call for 160 mph instead. An Amtrak spokesman told Philadelphia Inquirer reporter Paul Nussbaum that the railroad eventually hopes to operate trains faster than 160 mph on the Northeast Corridor, but for now is coping with the fact that 160 mph is the fastest speed that current infrastructure will permit.

End Fossil Fuel Subsidies to Cut Greenhouse Gas Emissions. Reporting from the UN Climate Change Conference of the Parties in Warsaw last month, Reason science correspondent Ron Bailey noted discussion of the large role that producer and consumer subsidies play in artificially lowering the price of fossil fuels. The International Energy Agency estimates that consumption subsidies alone amounted to $544 billion in 2012. Such subsidies are especially common in oil-producing developing countries and are considered "pro-consumer" by pricing products like gasoline at just pennies per gallon.

GAO Asked to Investigate Funding for California HSR. In light of a recent California court decision rescinding the California HSR Authority's funding plan for not complying with the conditions of its voter-approved bond measure, two House subcommittee chairs have asked the Government Accountability Office to investigate the Federal Railroad Administration's unusual funding agreement with the Authority. The request was made in a letter to GAO on Nov. 26th from Rep. Tom Latham (R, IA), chair of the Appropriations Committee's subcommittee on transportation, and Rep. Jeff Denham (R, CA), chair of the Transportation & Infrastructure Committee's railroads subcommittee.

What Makes for Prosperous Urban Areas?. My friend and colleague Wendell Cox has written a thought-provoking essay, "Toward More Prosperous Cities," described as a framing essay on urban areas, planning, transport, and the dimensions of sustainability. It was originally published in World Streets: The Politics of Transport in Cities and is now available online. Go to www.demographia.com/towardmoreprosperous.pdf.

FasTrak Celebrates 20th Anniversary. The nation's first statewide electronic toll collection system was 20 years old on October 16th. FasTrak began as the transponder system for the Transportation Corridors Agencies in Orange County, CA, and was first used on Oct. 16, 1993 on the SR 241 Foothill/Eastern toll road. In 1995, it was adopted by the new SR 91 Express Lanes, and it was subsequently adopted by Caltrans as the interoperable statewide ETC system. FasTrak is expected to be made nationally interoperable in the 2014-16 time period.

Addendum to Story on Virginia Supreme Court Tolling Decision. In last month's article on the unanimous Virginia decision that tolls are not taxes and that Virginia's P3 law is legitimate, I was remiss in not mentioning the amicus brief filed in support of this position by the American Road & Transportation Builders Association. ARTBA also worked with the Virginia Transportation Alliance on the latter's amicus brief. I'm glad these two organizations took such an active interest in this critically important case.

URL Glitches Last Issue. Evidently a gremlin was loose in my computer last month, because three URLs were incorrect. For those still interested in locating the documents I referenced, here are the correct URLs:

For the Virginia Supreme Court tolling decision it is www.courts.state.va.us/opinions/opnscvwp/1130954.pdf.

For the Commuting in America reports, the correct URL is http://traveltrends.transportation.org/Pages/default.aspx#.

And for the OECD report on PPPs, go to www.internationaltransportforum.org/jtrc/DiscussionPapers/DP201306.pdf.

» return to top

Quotable Quotes

"Federal money is in many ways 'tainting' many of our projects, as when you accept federal dollars you must accept federal rules as well. For example, we had a project in Virginia Beach we recently completed at 60% of the original estimate, and part of the reason we saved 40% is that no federal funding was involved. We got it done cheaper and faster without it,"
—Sean Connaughton, Virginia Secretary of Transportation, quoted in Sean Kilcarr, "States Gain Control by Saying 'No' to Federal Transportation Money," Fleet Owner, Nov. 27, 2013

"Inland ports have become the latest intermodal 'must have' for areas seeking industrial growth. In the last 10 years, real estate developers have sought to develop logistics parks all over North America, while some railroads have looked for 'free' intermodal terminals. Neither have been able to replicate the success of the first two: Alliance [TX] and Elmwood [IL]. 'Win-win' solutions aren't guaranteed. Part of the problem has been a proliferation of real estate developers, local economic development agencies, and overly optimistic ports, all posturing as overnight 'intermodal experts.' We should expect some rather embarrassing—and expensive—inland port disasters attributable to a weak understanding of intermodal's asset-based, network-operating basis."
—Ted Prince, "Grabbing Headlines," The Journal of Commerce, Nov. 11, 2013

"The simple truth is that our roads are never fully paid for, and ignoring the transportation funding crisis we have in America doesn't make it go away. In fact, it exacerbates the economic problems while congestion continues to grow in many parts of the country. The time has come for our elected leaders and the travel industry as leaders in their communities to more widely embrace alternative funding methods such as user fees. A user fee, such as tolling, is a proven funding method that helps cut congestion, drives economic growth, and allows communities to keep their transportation funding dollars locally."
—Patrick Jones, CEO of IBTTA, speech at U.S. Travel Association conference, Nov. 20, 2013

"The basic problem is that roads are outside the market economy. Road users do not receive the facilities they are prepared to pay for. A shortage of road space does not encourage suppliers to provide additional capacity because investment in roads is constrained by government policy. Market prices, i.e. prices determined by supply and demand, are an essential part of commercialization. They are needed to help allocate scarce road space and also to signal shortages and thus help investors relieve them."
—Gabriel Roth, "Moving the Road Sector into the Market Economy," IEA Current Controversies Paper No. 43, June 2013 (IEA.org.uk)

» return to top

Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy





;