Surface Transportation News #172

Surface Transportation Innovations Newsletter

Surface Transportation News #172

The Trump administration releases its infrastructure ideas and the Annual Highway Report ranks state systems.

In this issue:

Assessing the White House Infrastructure Plan

Well before the plan’s February 12th release, many seemed to have made up their minds that it was a scam or a delusion. Many Democrats in Congress have called for $1 trillion of new federal spending, without a thought about where that enormous sum would come from. Others were outraged that one of the programs in the bill would provide only 20% funding, with the rest having to come from state, local, and/or private sources. Another criticism was the plan’s approach to funding the planned $200 billion federal expenditures over 10 years: not by either raising tax rates or further borrowing but by eliminating ineffective federal programs.

Let’s take the last point first. The FY 2018 budget for federal discretionary spending (excluding entitlements) is $1.2 trillion. $200 billion over a decade averages $20 billion per year. That is 1.67% of the annual budget that includes national defense and all domestic programs other than entitlements. It’s absurd to imagine that somewhere in that $1.2 trillion there are not some items that are outdated, or have been shown to be ineffective, or are inherently state or local in nature, not federal. It’s a basic principle of good government to periodically review all the things it is doing, assess the benefits versus cost of each, and weed out those that are not delivering value for money. The White House should be commended for proposing this, not condemned.

Secondly, some politicians and popular media have portrayed the Incentives Initiative as if it were reversing the historic 80/20 federal/state funding split. But as White House infrastructure maven D. J. Gribbin has explained, all the existing transportation formula programs are unchanged. The Incentives Initiative is in addition to those long-standing programs, and it’s intended to draw on innovative financing in an effort to leverage the federal dollars. And to make good on that premise, the White House plan would significantly expand the federal programs that assist such leveraging: private activity bonds, TIFIA, RRIF, and WIFIA.

The White House’s more nuanced approach is not intended as a massive “stimulus” program, which is not what America needs. What we do need is much better targeting of investment to infrastructure projects that deliver better value for money. Both the Incentives Initiative and the Transformative Projects Program are aimed at this kind of project. And the former, in particular, is aimed at expanding the use of long-term public-private partnerships (P3s), for which hundreds of billions in private equity capital is interested and available. This money resides in for-profit infrastructure investment funds and in nonprofit public employee pension funds. Both are already investing in P3 infrastructure in Europe, Latin America, and the Asia/Pacific region, but very little here in the land of free enterprise. What they lack is a “pipeline of P3 projects.” To the extent that states are unwilling to provide 80% of the funding for major infrastructure improvements, they will be motivated to offer such projects as long-term P3s—as pioneer states such as Colorado, Florida, Indiana, Texas, and Virginia have been doing.

The White House plan also includes policy changes that will make it easier for projects to be offered as revenue-risk P3s. This includes making tax-exempt private activity bonds more widely available for such projects, removing the outdated federal ban on toll-financing the reconstruction and modernization of aging Interstate highways, and potentially allowing such revenue-based P3 projects to replace and modernize the aging locks and dams on the Inland Waterway System.

That plus meaningful streamlining of the permitting process should open the door for significant new investment in American infrastructure.

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Annual Highway Report Measures Value for Money
By Baruch Feigenbaum

Reason Foundation last week released its 23rd Annual Highway Report. The report uses data reported by states to the Federal Highway Administration, as a condition of receiving federal highway funding. It compares a state’s highway spending against its highway system performance, to assess value for money. The report is a measurement of the state’s roadway system, not a ranking of the state’s department of transportation.

Using a methodology developed in the early 1990s by Dr. David Hartgen (now emeritus professor at the University of North Carolina Charlotte), the report scores state highway systems on eleven different measures. Four of the metrics concern spending, three deal with pavement quality, and three more measure safety, with the last measuring congestion in census-defined urban areas.

Overall ratings tend to be similar from year to year. For example, in our most recent two report years, only eight states moved 10 positions or more. This time, Delaware and Hawaii improved by 18 and 25 positions respectively. Maine, New Mexico, Ohio, Oklahoma, West Virginia and Wisconsin fell by 18, 13, 17, 16, 11, and 10 positions, respectively.

Rural states tend to rank slightly higher as a whole than urban states in terms of value for money. Small Northeastern states tend to rank slightly lower than other states as a whole.

This year’s top performing state is North Dakota. Its high ranking is not a function of placing number one in many categories. In fact, the state’s highest ranking is 3rd in both Maintenance Disbursements and Rural Arterial Pavement Condition. Rather, North Dakota ranks high because it does not score in the bottom 10 of any category. Its worst ranking is 37th for Fatality Rate.

Conversely, the worst-performing state overall is New Jersey. It ranks last, but not because it performs poorly in every category. New Jersey ranks very high in two safety categories, 1st in Narrow Arterial Lanes and 4th in Fatality Rate. Rather, New Jersey is last overall because it is abysmal in a number of categories, especially disbursements. The state ranks last in Total Disbursements, Capital/Bridge Disbursements and Maintenance Disbursements, as well as 48th in Total Disbursements. It thus delivers poor value for the huge sums it spends.

It’s not just that New Jersey ranks last; it’s how much worse it performs than the next- worst state. Slow-growing New Jersey spends $919,042 per mile in Capital and Bridge Disbursements. That is more than double the 49th place state, fast-growing Florida, and more than 10 times the national average of $91,992. New Jersey spends $208,736 per mile in Maintenance Disbursements. That is more than double the 49th state, New York, and more than nine times the national average. New Jersey spends $2.1 million per mile in Total Disbursements. That is almost triple the 49th state, Florida, and 12 times the national average.

Predictably, states that do well tend to embrace the report. Those that do poorly tend to make excuses. Missouri DOT told us that they appreciate the Reason Foundation and its impact on national transportation policy. California’s DOT argues that it is special and “Cannot do well in such rankings.”

States that rank poorly can learn from neighboring states. Each state has strengths and weaknesses. For example, Georgia has long been an expert at maintaining high quality urban Interstate pavement at an affordable cost. Arkansas struggles at maintaining high-quality pavement. Arkansas DOT officials should consider speaking with GDOT officials about pavement quality.

There are also a few states that rank surprisingly poorly. The best example is Florida. Despite having a DOT that is considered to be in the top 15 in the country, the state ranks 35th in our report. This is due primarily to two factors. The state spends a lot of money on roadways, ranking in the bottom 10 of every disbursement category. It also has a terrible fatality rate, 9th worst in the country. Typically, states with high fatality rates are rural states in which cars are traveling faster, leading to more fatalities. But Florida is the third most populous state, and has a large number of urbanized areas. Florida would rank higher if could reduce its per-mile expenditures and improve its fatality rate.

We acknowledge that the report is not perfect, and our team is looking for ways to improve it. We examine states such as Florida that tend to rank lower than folks would expect, for insight into how we can improve the report. This year we changed how we measure congestion and how we measure deficient bridges. In the future, we plan to take a state’s growth and economic activity into account. We also want to give states that use tolling and public private partnerships credit for innovative finance and delivery methods. We realize that it’s not possible for every state to rank 1st. However, a great many should be able to tie for 25th.

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How Real Are Electric Trucks?

In Issue No. 170 we reviewed recent progress with electric passenger vehicles. This month we’ll assess the growing interest in the freight community over electric trucks. There is modest but ongoing growth in use of electric trucks for relatively light-duty purposes—local deliveries of mail, packages, groceries, etc. Range anxiety is not a problem for those kinds of fleets, since their typical daily mileage can be accomplished on a single charge, and recharging takes place at a fleet’s central hub.

The great question mark is how feasible electric propulsion is for heavy-duty trucks that operate on highways, particularly the large Class 8 tractors. That is the market being targeted by Nikola and Tesla, both new entrants into the truck production business. Both have unveiled sexy-looking prototypes (or mock-ups). The Nikola tractor will power its electric motors using electricity from on-board hydrogen fuel cells, while the Tesla tractors will be battery-electric.

Both companies have generated large numbers of pre-orders—basically, trucking companies putting down modest deposits to hold a place for X number of vehicles once production begins. Nikola claims more than 8,000 such commitments, while Tesla (which only unveiled its contenders in November 2017) has many hundreds, from such big names as UPS, J.B. Hunt, Schneider National, Anheuser-Busch, Pepcico, and Wal-Mart.

Back in 2016, Nikola announced that the price of its Class 8 tractor would be $375,000, about double that of a typical diesel Class 8. The 300-mile Tesla Semi was announced as costing $150,000, while the 500-mile version would go for $180,000. At those prices, Tesla claims a payback period of two years. Both Nikola and Tesla tout superior performance due to the superb traction offered by electric motors (e.g., being able to climb grades at 65 mph compared with 45 mph for diesel trucks), as well as energy-efficient regenerative braking.

None of the performance claims have been demonstrated thus far, and the actual prices of the vehicles may be more than the initial estimates, depending on development costs that can only be estimated. But one key factor has not yet been announced by Tesla: the total weight of a Tesla Semi. Huge battery packs are very heavy (and Tesla rightly touts this as contributing to the tractor’s low center of mass). Even without the mass of a diesel engine and transmission, the total weight of the rig is likely to be higher than that of a diesel—and as transportation consultant Lawrence J. Gross pointed out in The Journal of Commerce (Jan. 8, 2018), “every extra pound represents an equivalent loss of payload.”

Nikola will not likely incur as large a weight penalty, assuming that its hydrogen tank and fuel cells weigh less than the Tesla’s battery pack. But as indicated by the Nikola’s much higher announced price, the hydrogen fuel cell is no free lunch. As Michael Sena points out in the December 2017 issue of The Dispatcher, the only hydrogen fuel-cell car available in America—the Toyota Mirai—costs over twice the price of the comparably sized Toyota Prius. It will also cost more to operate, due to the high cost of producing hydrogen and the very limited distribution of hydrogen (it’s produced in quantity in only three states).

And both Nikola and Tesla still face the problem of range anxiety for long-haul Class 8 trucking. As of today, there are only 39 hydrogen fueling stations in the United States, all but four of which are in California. Hydrogen refueling is supposedly as quick as diesel refueling, compared with 30-45 minutes for recharging at one of Tesla’s still quite limited number of Supercharger stations. This suggests that early markets for both Nikola and Tesla Class 8s will more likely be in heavy-duty urban-area trucking, such as drayage of containers from ports to distribution centers, rather than long-haul over-the-road operations.

Overall, there’s a lot of potential for electric trucks, but the long-haul market remains a question mark. And the competition between battery-electric and fuel-cell-electric heavy trucks will be interesting to watch as it evolves.

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Increasing Roles for Private Transit Services
By Baruch Feigenbaum

With the advent of ridesharing services such as Lyft and private transit operators such as Chariot, U.S. transit options are changing rapidly. Meanwhile, traditional transit providers are continuing to lose ridership. The Federal Transit Administration reports that transit ridership decreased 2.6% from 2016 to 2017. December’s drop was almost 5%.

As a result, several studies have looked at the different transportation options to see if there is a way to improve coordination between public transit, private transit, and ridesharing services. Hopefully, such options can improve transit quality and reduce costs. The National Academy of Sciences Transit Cooperative Research Program (TCRP) has released the most comprehensive study that I have read. Titled Private Transit: Existing Services and Emerging Directions, the 90-page report documents the different types of transit services available and suggests some policy changes.

First, the report reminds us that most transit services were private until well after World War II. Even though public agencies took over most these services by 1970, private services never disappeared. Ron Kirby, of the Urban Institute and later the Metropolitan Washington Council of Governments (MWCOG), coined the term paratransit to apply to many privately-operated services. Traditional paratransit services include dial-a-ride taxi service and pre-arranged ridesharing such as carpools and vanpools. These services have seldom been heavily used in major metro areas. One reason is that metro area officials often seek to protect market share for public transit agencies, making most jitneys illegal. Typically, restricting jitneys and thus competition made overall transit service worse. Even so, several quasi-legal jitneys have survived to provide services to minorities underserved by public transit. Additionally, employers started operating shuttle services, either as fixed-route transit service for employees or as circulators in business districts.

The TCRP report divides private transit service into two main branches: private market services and sponsored services. Private market services provide rides directly to paying customers. Examples include on-demand pooled services such as UberPool, pre-arranged route- or zone-based services such as those offered by microtransit providers like Chariot, and flexible route-based services such as jitneys.

Sponsored services occur when a property owner or employer contracts with the service provider to provide rides for other parties, such as tenants or employees. Examples include employer-based commuter service, property-based private transit services, and consortium-sponsored services, typically using public-private partnerships (P3s).

The following table compares the various types of private services. It details the types of service offered, how the service is requested, how the fare is collected, and who can ride the service. It has been created from data in the report.

 

Comparison of Private Transit Services

Service Type

Stop Configuration

Service configuration

Ride request format

Fare collection

Access requirements

Private Market Services

On-demand Pooled services (shared taxis or TNCs)

Many to many

Demand responsive, Zone route

On demand

Online/app,

Cash, Credit

Technology restrictions

Prearranged route- or zone- based services (microtransit)

Few to few, Few to one

Fixed route, Zone route

Prearranged

Ticket, Online /app

Technology restrictions

Flexible route-based services (jitneys, dollar vans)

Many to one, Few to one, One to one

Fixed route, Route deviation, Request stop

Street hail, No arrangement

Cash, Ticket

General public

Sponsored Services

Employer-based commuter services

One to one

Fixed route, Request stop

No arrangement

Free/Subsidized, Online/app, Ticket

Employee only

Property-based services

Few to one, One to one

Fixed route, Request stop

No arrangement, Prearranged

Free/ Subsidized, Online/app, Ticket

Affiliated only

The report makes a number of positive findings on private transit providers. Private service can complement public transit and help reduce single-occupant car trips. Some private systems substitute for single-occupant car trips, reducing vehicle miles traveled. Since buses/jitneys are safer than cars, private transit systems also improve system safety. One of the most important advantages of private transit is its ability to expand transportation service in low-income and minority communities.

The report also has a number of good recommendations for transit policy going forward, such as working with the private sector to develop sensible regulations, sharing street space among the public and private sector providers (finding places to load and unload shuttles is one of the biggest challenges today), update licensing of private services to reflect new business models, exploring consortium services for areas that cannot support traditional transit, promoting efficiencies by having public and private sectors work together, and ensuring that private transit services are a component of the growing mobility-as-a-service model.

My one disagreement is the idea that use of private transit is a warning that public transit changes are needed. Private and public services can serve different markets. I’m not convinced that success in one leads to bad consequences for the other. Putting that aside, this is an excellent report that should be recommended reading for anyone interested in how traditional and new transit services can work together in metro areas.

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Some Second Thoughts on Urban Bicycling

Expanding the role of bicycle travel in urban areas has been government policy in developed nations for several decades. As Lawrence Solomon wrote in a recent piece in Canada’s Financial Post, “At no expense to taxpayers, the bicycle took cars off the road, easing traffic; it saved wear and tear on the roads, easing municipal budgets; it reduced auto emissions easing air pollution; it reduced the need for automobile parking, increasing the efficiency of land use; and it helped keep people fit, too.”

Yet despite these ostensible benefits, something of a “bikelash” is under way, in cities that include Amsterdam, several major cities in China, London, Singapore, and elsewhere. As The Economist reported in “The Bikes That Broke Free” (Dec. 23, 2017), one emerging problem is dockless bike-sharing systems that have plagued cities with bikes left all over the place. Amsterdam has banned such systems, and a growing number of Chinese cities have called a halt to any expansion of existing systems.

Solomon—once a strong advocate of urban bicycling—has concluded that bicycling today “is a mixed bag, usually with more negatives than positives. In many cities, bike lanes now consume more road space than they free up; they add to pollution as well as reducing it; they hurt neighborhoods and business districts alike; and they have become a drain on the public purse.”

Many of his examples come from Europe and Australia, where cities have been far more aggressive in promoting bicycle use than is typical in the United States. Transport for London has spent large sums to create a “cycle super highway” that has taken away traffic lanes and increased traffic congestion, sparking a significant backlash. Paris is spending €150 million on cycling infrastructure, Amsterdam €120 million just on bike parking spots, and Melbourne is under way on a $100 million cycling plan.

Negative health impacts are an unexpected consequence of aggressively expanded urban bicycling, Solomon notes. Congestion caused by taking away traffic lanes leads to idling traffic, which increases emissions. Cyclists are the most-exposed to PM2.5 soot from idling vehicles. A study by the London School of Medicine found that cyclists in London have 2.3 times more inhaled soot than walkers, because “cyclists breathe more deeply and at a quicker rate than pedestrians while in closer proximity to exhaust fumes.”

Although Solomon doesn’t mention cyclist deaths and injuries due to driving in close proximity to motor vehicles, my traffic engineer friends tell me (off the record) that they are appalled by the proliferation of bike lanes on major U.S. arterials that, because they are a vital supplement to the freeway system, increasingly have traffic signal timing aimed at providing rolling green lights and 40-45 mph speeds. They would much prefer that bicycles be kept away from such high-volume traffic arteries.

Solomon also points to concerns of local merchants who depend on metered street parking for their customers. In some cities, bike lanes have replaced street parking. The result is to replace a multi-function lane (traffic lane during AM and PM peaks, parking and truck delivery space at other hours) with “a single-function piece of under-used pavement.” Cities lose the former parking meter revenue, and in some cases have to build expensive parking structures nearby to replace the street parking.

Lawrence Solomon is an environmentalist whose career with Canada’s Energy Probe Research Foundation spans several decades. His piece raises serious questions, and is well worth reading and pondering. (http://business.financialpost.com/opinion/lawrence-solomon-ban-the-bike-how-cities-made-a-huge-mistake-in-promoting-cycling)

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“Build America Fund” Would Reduce Trucking’s Share of Highway Costs

The January 24th news release from the American Trucking Associations said the organization is proposing a “bold infrastructure plan,” so I read on with interest. Paragraph 2 explained that their proposed Build America Fund would be supported by a “federal fuel usage fee built into the price of wholesale transportation fuels collected at the terminal rack”—exactly as gasoline and diesel motor fuel taxes are collected today. The only “new” parts of the proposal were (a) the amount, a 5¢/gallon increase each year for four years, and (b) indexing of the new taxes for both inflation and increases in fuel efficiency.

An indexed fuel tax increase is hardly a new idea, but the release went on for nine more paragraphs, so I read on to see what else ATA had to say about its proposal. Paragraph four included an estimate that over the first 10 years, the tax increase would generate $340 billion in new highway revenue. It also noted that the trucking industry currently generates 45% of the revenue that goes into the federal Highway Trust Fund.

But the following paragraph gives away the game. It estimates that of the $340 billion generated by the increased taxes, the trucking industry would pay $112 billion. That’s only 33% of the total take, compared with the industry’s 45% share of current Highway Trust Fund revenues. So while this bold infrastructure plan would indeed put more money into the Trust Fund, it would actually reduce the trucking industry’s share.

That doesn’t sound very bold to me.

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Upcoming Transportation Conferences

Note: We don’t have the time or space to list all transportation events that might be of interest to readers of this newsletter. Listed here are events at which a Reason Foundation transportation researcher is speaking or moderating.

Can Congestion Pricing Improve Mobility? California State University, March 20, 2018, San Bernardino, CA (Baruch Feigenbaum speaking). Details at: https://csusb.edu/leonard-transportation-center/conversations/events

58th Annual Transportation Research Forum, University of Minnesota, April 10-11, 2018, Minneapolis, MN (Baruch Feigenbaum speaking). Details at: https://trforum.org/18-annual-forum

IBTTA Managed Lanes, AET, and Technology Summit, Sheraton Charlotte, April 22-24, 2018 (Adrian Moore speaking). Details at: https://ibtta.org/events/managed-lanes-aet-technology-summit

Princeton Smart Driving Car Summit, Princeton, NJ, May 16-17, 2018, Princeton University (Baruch Feigenbaum speaking). Details at http://summit.smartdrivingcar.com

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News Notes

P3 Bid for New Hampshire Turnpike. In response to a solicitation from the state’s Public-Private Partnership Infrastructure Oversight Commission, a consortium has submitted a letter expressing interest in a long-term concession for the New Hampshire Turnpike. The 89-mile system consists of three facilities—the Central (39.5 miles) and the linked Blue Star and Spaulding (49.4 miles). The informal proposal came from John Laing Infrastructure Fund (UK), Love’s Travel Stops (Oklahoma City), and contractor Subcon (Tulsa). As part of its plan for operating the toll roads, the consortium proposes extensive development of commercial rest areas and service plazas.

$31-55 Billion Tunnel Proposed Between Westchester County and Long Island. The New York State DOT issued a request for expressions of interest in a tunnel that would provide a short-cut between southern Connecticut/Westchester County and New York, relieving congestion on metro New York City expressways. A preliminary feasibility study by WSP last year estimated the cost of the 18-mile tunnel from Rye to Syossett at between $31.5 and $55.4 billion. It estimated travel time savings at one hour each way. That ought to be worth paying for.

“The Most Expensive Mile of Subway Track on Earth”. That was the headline on a Dec. 28th New York Times story. The project in question of the East Side Access, a 3.5-mile subway that is costing $12 billion—nearly $3.5 billion per mile. Reporter Brian Rosenthal compared cost figures and labor practices of other major tunnel projects overseas, finding that “underground construction [in New York City] employs approximately four times the number of personnel as in similar jobs in Asia, Australia, or Europe.” Similarly inflated costs are found in the MTA’s Second Avenue Subway project, the Times reported. This is an outstanding piece of investigative reporting.

$13 Billion Toll Project in Melbourne. The Victoria government is seeking expressions of interest for a $13.1 billion highway P3 project, the North-East Link. The 16-mile project, including 3.1 miles of tunnel, will complete Melbourne’s ring road. Although tolls will be charged, the planned P3 concession would be based on availability payments, with the government doing the tolling and taking the traffic and revenue risk.

Canadian Toll Road Concession Up for Bids. Macquarie Infrastructure Partners (MIP) has put on the market its equity investment in the Autoroute 25 toll road, which opened to traffic in 2011. The 4.5-mile toll road is in the Montreal metro area. MIP is selling its stake because the fund is reaching the end of its planned lifespan. Inframation reports that six consortia have expressed interest in the A25 stake, for which binding bids are due in the second half of March.

California Bullet Train Hits Financial Crisis. The cost of building the “starter segment” of the Los Angeles to San Francisco high-speed rail line has ballooned from $6 billion to $10.6 billion—a 77% increase. And that is just for the 119-mile “easy” segment in the Central Valley, not the far more complex tunnels needed to cut through mountainous approaches to the San Francisco Bay Area in the north and the Los Angeles metro area in the south. And unfortunately for motorists, debt service on the bonds already issued for the project will take $18 billion from the state highway fund over the next 30 years, according to a Los Angeles Times article (Jan. 18, 2018).

Florida Turnpike’s Express Toll Lanes. Thus far, the only toll agency in the 50 states that is developing variably priced ETLs is Florida’s Turnpike Enterprise (FTE). Projects are under construction on the Homestead Extension of the Turnpike in Miami-Dade County, on its Veterans Expressway north of Tampa, and on the Beachline West (SR 528) in Orlando. The express toll lanes on the latter will open by the end of 2018, and will eventually connect with the new ETLs on I-4, once the latter open in 2021.

“Millennials Kick-Start Housing Market”. That was the headline on a Jan. 31, 2018 front-page Wall Street Journal article. The basic thesis is that last year’s increase in the home-ownership rate was powered by millennials moving from renting to owning. Additional perspective on the determinants of housing choice is a new report from the Texas A&M Transportation Institute, “Influences of Transportation on Residential Choice.” Its survey of Texas real estate agents found that transportation and traffic concerns are not the most important factors in people’s housing choices, at least in Texas.

New ITS for the Indiana Toll Road. The Indiana Toll Road Concession Company announced in December that its $8 million intelligent transportation system for toll road users will become operational in February. The project employs 70 miles of fiber optic cable, feeding dynamic message signs to alert motorists to crashes, work zones, adverse weather, and other possible hazards.

Transportation Agencies Rethink Price Caps on ETLs. While the political appeal of price caps on express toll lanes is obvious, their potential to undercut variable tolls’ pricing power (and hence the ability to control congestion) has caused problems where such controls exist, such as on the I-95 ETLs in South Florida and on the I-405 ETLs in Seattle. Utah DOT on February 1st announced that the maximum toll on its I-15 ETLs will increase from $1 to $2 this year, and legislators concerned about congestion in the lanes have discussed a possible higher cap of $4. Far better would be to avoid price controls, as is the case on most or all ETLs developed as revenue-risk P3 concessions and on some government toll roads, including Austin’s MoPac ETLs that opened last fall and are seeing higher-than-expected demand.

Has U.S. Motorization Peaked? U. of M. Says Maybe. A January 2018 report from the University of Michigan looks at trends in vehicle ownership and VMT per capita from1984 to 2016. As widely reported during the Great Recession, both metrics peaked that decade, VMT/capita in 2004 and vehicles/capita in 2006. But after recession-induced declines, both have resumed uptrends, though neither had reached the previous peaks as of 2016 data. VMT/capita bottomed out in 2013 and had increased 4.1% by the end of 2016. And vehicles/capita bottomed out in 2012 and had gained 3.0% by the end of 2016. It will be interesting to see if those trends continue once 2017 data become available.

What Happens When P3 Concessions End? Long-term concessions expire at the end of the agreed-upon concession term, and most concession agreements specify various hand-back conditions. But there has been little study of how these transitions occur—whether to a new concessionaire or to resumed government operation. The US DOT’s Build America Bureau in December released a study on this subject, “Case Studies of Handback Experience with Public-Private Partnerships.” (Report No. FHWA-HIN-17-011) The report reviews three cases of hand-backs—one each in Australia, Finland, and Ireland. It also review hand-back provisions in three recent U.S. concessions and one in Australia.

Ohio River Bridges Exceed Traffic and Revenue Forecasts. The first year of tolling on the P3 bridges between Indiana and Kentucky went very well, with $80 million in toll revenue exceeding the first-year projection of $75.6 million. Daily traffic was nearly 82,000, and transponder penetration reached 63% during 2017’s fourth quarter, compared with 56% in the first quarter.

New P3 Bill in Washington State Legislature. A bipartisan pair of legislators introduced HB 2726 in January, aiming to reform and expand the state’s little-used P3 enabling act. The two largest changes would (1) open the scope for P3 projects beyond transportation, and (2) remove a requirement that only state-issued bonds be used for P3 projects. One of the sponsors argues that if the forthcoming Trump infrastructure bill stresses P3s, the state needs to be ready.

Will San Francisco Toll Bridges Finally End Cash Tolls? The death of a toll collector on the Bay Bridge (between Oakland and San Francisco) has renewed calls for the Bay Area Transportation Authority to get on with the job of going to all-electronic tolling. The toll collector died when a truck crashed into the toll booth she was staffing on the first weekend in December. The separately managed Golden Gate Bridge has been cashless since 2013, and Fas-Trak transponder toll collection capability exists on all seven Caltrans bridges. But concern over the jobs of the 230 toll collectors has been the political stumbling block for those bridges to go all-electronic. How about concern for their lives? And for the bridges’ customers?

Alabama Short-Lists Three Teams for P3 Bridge on I-10. The Alabama Toll Road, Bridge, and Tunnel Authority has approved Alabama DOT’s selection of three best-qualified teams for the $1.5 billion project to design, build, finance, operate, and maintain a new I-10 bridge over the Mobile River. The teams are led by Cintra/Meridiam, ACS/Macquarie, and InfraRed/Astaldi. The winner will negotiate a 55-year revenue-risk P3 concession for this project.

Corrections to Previous Articles. Alert readers spotted several errors in articles in last month’s issue. I’m pleased to offer these corrections:

  • In the article on VMT versus LOS, one sentence should have read, “for every instance in which VMT might have an advantage over LOS, I can think of three other instances in which using VMT would be worse.”
  • An article on the Jones Act and proposed Mississippi River cruises mistakenly said that Viking River Cruises is owned by Norwegian Cruise Line. In fact, Viking is owned by private investors and is headquartered in Los Angeles.
  • The American Transportation Research Institute is not technically part of the American Trucking Associations. It is separately incorporated and considers itself part of the trucking federation that includes ATA’s state affiliates.
  • The eastern end of the InterCounty Connector in Maryland is at U.S. 1, not I-95 as stated in a News Note.

Thanks again to our sharp-eyed readers.

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Quotable Quotes

“One might go even further [than Scientific American] by comparing today’s Smart Cities as being socialist/communist/Marxist 5-year plans where the central planner now controls data and electronic devices rather than human work brigades. They are both about centralized control of lifestyles. All well and good as long as the centralized ‘optimizers’ of society are benevolent dictators. However, they were dangerous then and are probably dangerous now. Smart Cities may well be an attempt to reach some perfection at the demise of individual good enough.”
—Alain Kornhauser, “The Inconvenient Truth About Smart Cities,” Smart Driving Cars, November 2017 (www.SmartDrivingCars.com)

“We obviously have more and more vehicles on the road that simply don’t pay any fuel tax. Or we have more efficiency and they’re paying less in fuel tax. Ultimately, we have to change over to something else, because as time goes on, fewer and fewer dollars are going to come in as a result of those efficiencies or vehicles just not paying.”
—Rep. Sam Graves (R, MO), interviewed by Eugene Mulero, Transport Topics, January 12, 2018

“The numbers don’t lie. When you look at the cost and the ridership numbers and the likelihood of state and federal matches, I think [BRT] made a lot of sense. . . . Frankly, I’m tired of talking about it. We need a victory. I can say with a great deal of certainty that if we move toward a BRT model using the existing Interstate, we can get this done much more quickly than another prolonged debate in a political referendum about whether or not rail is appropriate for our area.”
—Tampa Mayor Bob Buckhorn, quoted in Caitlin Johnston, “Tampa Bay’s Transit Future: Light Rail’s Out. Rapid Buses Are In,” Tampabay.com, January 11, 2018

“To track the evolution of any major technology, research firm Gartner’s ‘hype cycle’ methodology is a handy guide. You start with an ‘innovation trigger,’ the breakthrough, and soon hit the ‘peak of inflated expectations,’ when the money flows and headlines blare. And then there’s the trough of disillusionment, when things start failing, falling short of expectations, and hoovering up less money than before. This is where the practical challenges and realities separate the vaporware from the world-changers. Self-driving, it seems, is entering the trough. Welcome to the hard part.”
—Aarian Marshall, “After Peak Hype, Self-Driving Cars Enter the Trough of Disillusionment,” Wired, Dec. 29, 2017

“Highway congestion is costly. Drivers waste time and fuel. As deliveries take longer, congestion costs in Dallas and Houston will equal about $28 billion and $24 billion, respectively. It will cost Austin drivers almost $8.5 billion in wasted time and fuel. . . . Congestion occurs because drivers don’t pay to use limited highway space—resulting in overuse. The solution is to charge a toll for using the road, or better yet, for an under-used carpool lane. The toll should be highest during peak drive times and lower the remainder of the day. Electricity users in some areas are familiar with similar pricing schemes that apply higher rates during peak energy consumption times.”
—Robert Krol, “Managed Lanes Can Reduce Traffic Congestion in Texas,” Houston Chronicle, January 8, 2018

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Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. Poole, an MIT-trained engineer, has advised the Ronald Reagan, the George H.W. Bush, the Clinton, and the George W. Bush administrations.