- Global study documents benefits of highway P3 concessions
- D.C. area express lanes network’s celebrations and concerns
- Transit’s post-pandemic ridership decline and fiscal cliff
- Electricity grid not prepared for electric big rigs
- Major benefits of advanced driver assistance systems
- The automated vehicle implosion
- Feedback on gas stations and EV charging stations
- News notes
- Quotable quotes
A global assessment of the benefits and costs of 21 toll-financed highway public-private partnership (P3) projects in nine developed countries finds benefits exceeding costs for the 16 projects that have been completed and are in operation. The benefits thus far total $29 billion, while the costs, including costs for projects still under construction, total $23.5 billion. This suggests that over the full life of these 21 concessions, benefits will likely far exceed costs.
The study was carried out by transportation economics firm Steer, based on project data provided by Cintra, the surface transportation arm of Spanish infrastructure company Ferrovial. The report, dated Oct. 2022, is “Economic Impact of Cintra Assets” and is available online.
This is the first global study I know of that uses a standard methodology to assess benefits so that it permits fair comparisons of projects in the nine countries. The benefits are assessed in the following categories:
- Expenditure impacts, assessed via standard input/output models;
- User benefits: travel time savings, reliability increase, reduced vehicle operating costs;
- External benefits: increased safety, reduced emissions; and,
- Wider economic benefits: urban agglomeration benefits (increased economic productivity).
I’m not a fan of input/output models in general because they often reflect local impacts from a project being done in one part of a country rather than in another. But since they are widely used, and the Steer study followed mainstream U.S. and Organisation for Economic Co-operation and Development (OECD) procedures, I report the results here for completeness. The economic impact from the $23.5 billion in project construction and operations to date totaled $60.8 billion and 334,500 full-time-equivalent job years.
Far more interesting to me are user benefits, external benefits, and agglomeration benefits. The projects analyzed include four managed lanes projects in the United States, three U.S. urban toll roads, three phases of a new Canadian urban toll road, eight new interurban toll roads in Europe and Australia, and one new toll network in the Azores. In each of these cases, user benefits were assessed by comparing travel time, reliability of travel time, and reduced vehicle operating cost for those using the new toll facilities compared with existing routes they would have used had the new capacity not been built. Induced demand was estimated and assessed separately. All assessments included both light and heavy vehicles.
External benefits were estimated for both road safety and emissions changes. For the safety calculations, project and no-project accident rates were estimated, reflecting that more of the trips in the no-project alternatives would have been undertaken in more-congested conditions and with a larger fraction on non-limited-access roadways. Emissions estimates followed the U.S. Department of Transportation (DOT) 2021 emissions benefit/cost guidance and assessed CO2, nitrogen oxides, and PM 2.5. Emission rates were based on Motor Vehicle Emission Simulator (MOVES) 3 model for the U.S. cases and comparable government models for Australia, Canada, and Europe.
Wider economic benefits reflect growing research by economists on urban agglomeration impacts. In brief, shorter travel times between homes and jobs enable more positive-sum transactions to take place between employers and prospective employees, and many urban economic studies have quantified the impact of this on the economic productivity of large urban areas. The United Kingdom’s Department for Transport routinely does this kind of analysis; alas, to the best of my knowledge U.S. DOT and state transportation departments do not.
Table 4.3 in the report summarizes the socioeconomic impacts of the 16 projects that had been in operation for at least a year by the end of 2021. The results were as follows:
|User benefits||$23.25 billion|
|External benefits||$1.89 billion|
|Agglomeration benefits||$3.95 billion|
Would all those benefits have occurred if these projects had been funded conventionally by state legislators and implemented via traditional design-bid-build or design-build contracts?
Perhaps, but let’s consider some key differences. These public-private partnership (P3) projects employed long-term financing via toll revenue bonds and investor equity. This means they had to meet a market test of generating enough traffic over the 35-to-99-year terms of the P3 agreements to pay off the bonds, provide a return to the equity investors, and cover operating and maintenance costs for the entire duration of the agreement. With conventional procurement, there would be no market test to guard against boondoggles and no guarantee against deferred maintenance, which is quite common across the United States.
Moreover, in today’s world, when federal and state fuel tax receipts don’t come close to covering the capital and operating costs of large-scale highway projects, an increasing share of the federal support is borrowed, adding trillions to the national debt (e.g., the entire cost of the Infrastructure Investment and Jobs Act legislation). That is not a sustainable way to fund highways.
I see the new Steer report as a strong validation of the toll-financed long-term P3 model. It is working well in Australia, Europe, and, thus far, to a limited extent in the United States. The long-term P3 could do far more in the U.S. if legislators and state transportation departments fully researched and utilized it.
The emerging network of priced managed lanes in the Washington, D.C., metro area celebrated two milestones last month. The first link in the network—the I-495 express lanes project financed in 2007—celebrated its 10th anniversary of operations. And the newest major link in the network—I-66 Outside the Beltway—had its official ribbon-cutting ceremony on Nov. 29. Altogether, this Virginia-based network now extends over 84 route miles.
All but one small piece of the network (I-66 inside the Beltway) has been financed, developed, and operated under long-term design-build-finance-operate-maintain (DBFOM) public-private partnership (P3) concessions. The original I-495, I-95, and I-395 projects were developed and continue to be operated and managed by Transurban. The new I-66 Outside the Beltway lanes are the latest U.S. express toll lanes from Cintra, teamed with Meridiam, who also worked together on major P3 managed lanes projects in operation in Dallas and Fort Worth.
The original I-495 project began as an unsolicited proposal to Virginia DOT (VDOT) from Fluor, under Virginia’s Public-Private Transportation Act. As I recounted in my book Rethinking America’s Highways, the company, later joined by Transurban, proposed a largely self-funded project to add two express toll lanes each way to the western half of the I-495 Beltway instead of the Virginia Department of Transportation’s long-unfunded plan to spend $3 billion to add high-occupancy vehicle (HOV) lanes to that portion of the Beltway. The project was financed at $2.3 billion, of which the state contributed only 21%. The new lanes opened 10 years ago. They enabled faster and more reliable trips for paying customers, enabled three-person carpools to use these faster lanes at no charge, and facilitated express bus service and new park-and-ride lots. The success of these initial projects cleared the way for subsequent managed lanes on I-95 and I-395, which Transurban also won. As of the tenth anniversary of the original project, 75% of greater Washington, D.C., area drivers have used the express lanes, up from 62% in 2021.
The $3.5 billion Cintra/Meridiam “Transform 66” project was the first Virginia express lanes project to be entirely privately funded, with zero state investment. It was financed in 2017 with a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan, private activity bonds, and an unprecedented 44% equity investment. It has substantially rebuilt 22.5 miles of I-66, added three new park and ride lots, and includes new communications infrastructure to facilitate emerging connected-vehicle capabilities. As with the other links in the express lanes network, 3-person HOVs will use the new lanes at no charge, as will buses. To be consistent with the HOV-3 policy on the emerging network, on Dec. 5, the occupancy requirement on I-66 inside the Beltway (operated by VDOT) will change from HOV-2 to HOV-3.
There remains one missing link in VDOT’s D.C. metro area express lanes network: I-495 between I-95 and the Woodrow Wilson Bridge. VDOT hopes to add express lanes on that corridor, as well, potentially crossing the bridge and extending to the MD 210 interchange. Details about the ongoing I-495 Southside Express Lanes study are on the VDOT website.
The one discordant note amidst the Virginia celebrations is the possible cancellation of the first express toll lanes on the Maryland side of the Potomac—the Op Lanes Maryland project that would rebuild the American Legion Bridge, adding express lanes to the new bridge and to I-495 as far as I-270 and on I-270 as far north as I-370. The concession agreement with the Macquarie/Transurban team has not been finalized due to nearly a year-long delay in issuance of the federal record of decision (ROD) giving the project federal environmental clearance. The draft concession agreement must then survive a vote of the state’s Board of Public Works (BPW), which has new members thanks to the November election. Maryland Gov.-elect Wes Moore has expressed reservations about the project, as has the incoming controller. Moore and the controller are two of the BPW’s three members. It would be tragic if the Maryland half of the greater Washington, D.C., metro area turned its back on the demonstrated success of express lanes on the Virginia side of the Potomac.
The drop in transit ridership resulting from COVID-19 pandemic-induced commuting changes has decimated transit agencies’ financial situations. In late 2020, as many cities continued to ban or restrict various in-person activities, transit ridership was down to 5% of its pre-COVID total. While transit ridership has now recovered to 60% or more of pre-COVID levels, it is still causing financial problems for most transit agencies. Two recent articles sounded the alarm on concerts about the financial situations and long-term ridership hopes.
In a Center Square article by Elyse Apel, Tom Gantert, and Brett Rowland, whose title is the main thesis, “As Transit Fares Plummet, Federal Money Increases 95%,” the writers detail how transit’s farebox recovery rate has declined from a paltry 32.3% in 2019 (before the pandemic) to 18.4% in 2020 and 12.8% in 2021. The 2022 numbers are not yet available but are forecast to fall far short of 2019’s numbers. To offset transit’s ridership losses, the federal government has provided transit agencies with $72 billion in four separate bailouts. In 2021, for example, transit agencies used this spending for $13.1 billion on operational expenses. Yet, for a variety of reasons, this cash windfall has failed to restore transit ridership to pre-COVID levels.
The farebox recovery ratio for operational expenses, which excludes capital spending, is a big problem. In 2019, farebox revenue covered almost half of all transit operating expenses. In 2021, the number was only 19%.
With Democrats retaining the U.S. Senate but Republicans taking control of the House of Representatives in 2023, the transit bailouts will likely end. Yet most transit agencies do not seem to know what their ridership will be in the coming years or have plans to fully fund their systems.
In the second of a multi-part article titled “Looking to the Horizon: How Agencies are Anticipating the Mass Transit Fiscal Cliff,” Eno Center for Transportation’s Garett Shrode, a former Reason Foundation intern, found that transit agencies budgeting multiple years in the future are coming to widely different conclusions. For example, Bay Area Rapid Transit (BART) uses three ridership models: a base scenario that assumes 70% of pre-pandemic ridership, a downside scenario that assumes 60% of pre-pandemic ridership, and an upside scenario that assumes 80% of pre-pandemic ridership. For the 2026 fiscal year (FY), the upside scenario predicts no budget deficit, the middle scenario forecasts a $118 million deficit, and the downside predicts a $200 million deficit. And the deficits for the middle and downside scenarios grow by more than 50% between 2026 and 2032.
Other transit agencies provided just one forecast figure. And they were all negative. Southeastern Pennsylvania Transportation Authority (SEPTA) predicts a $63 million budget deficit in 2026, growing to $283 million for FY 2028. Washington Metropolitan Area Transit Authority (WMATA) predicts a $527 million deficit for 2025. New York’s Metropolitan Transit Authority (MTA) predicts a $2.26 billion deficit for 2025. MTA still has a massive deficit even with toll revenue (from MTA bridges and tunnels), and future fare increases included.
For funding, many transit agencies’ strategies seem to rely on some combination of increasing fares, reducing service levels, increasing sales taxes and/or general fund revenue.
This lack of a comprehensive strategy makes agencies susceptible to plans that exacerbate budget challenges. For example, the Washington, D.C. City Council recently voted to make all bus transit free in the city, using general fund revenue to pay for this service for all D.C. residents regardless of their income levels. Free transit is a growing movement despite the fact that none of the dozens of reports on it has ever found free transit to be a good idea. Most importantly, when an economic recession occurs, tax revenues go down, budgets are hit and general fund revenue to WMATA gets cut, who is going to make up the revenue? What politician is then going to propose charging for something that has been free?
Given the information and data in the Center Square and Eno pieces, what do transit agencies need to do? First, they must take steps to reduce their need for subsidies. Even before the pandemic, farebox revenue made up less than one-third of transit agency operating and capital expenses. Most transit agencies need to charge more for rail service, which tends to be used more by affluent riders and provide vouchers to customers who cannot afford the higher fares. Agencies need to advertise more on transit vehicles, in stations, and in transit-oriented developments.
Second, agencies should focus on the customers they have, not the customers they want. In the Washington, D.C., metro area, the decision to build the Silver Line and cut bus service was made in hopes of luring choice riders—those with access to an automobile—out of their cars. The decision has increased costs because the added expense of repaying the capital costs for the Silver Line will take decades. But it hasn’t significantly increased choice ridership since trains are slower than driving and have long headways, the intervals between trains. Further, it is typically more justifiable for transit agencies to subsidize transit rides for working-class commuters than for a rider who drives a BMW.
Finally, in the long term, the entire transit industry needs to be rethought. More transit services should be contracted to improve efficiency and reduce costs. Metro regions should have mobility management agencies. Transit agencies also need to conduct a rigorous evaluation of their service quality. Many transit agencies are failing their customers today, and they were failing them before the COVID-19 pandemic. If transit agencies don’t start making big changes to adapt to changing work-from-home and travel patterns by the year 2030, no level of subsidies will be enough for some of them.
Electric utility company National Grid released a study on requirements for electric vehicle (EV) charging stations along long-distance highways, with a focus on heavy trucks. The finding that got the most attention in trucking circles is: “The charging capacity required to supply a large passenger vehicle travel center/truck stop will be roughly equivalent to the electric load of a small town.”
The Electric Highways Study was conducted by National Grid along with Calstart, Geotab, RMI, and Stable Auto. Its geographic focus was New York and Massachusetts, but the implications are national. The report reached six main conclusions:
- A typical highway electric vehicles charging site will eventually need 20+ fast chargers.
- While light-duty EVs (e.g., cars and SUVs) will drive electric load increases in the near term, medium/heavy electric vehicles will greatly increase charging needs in the medium/long term. By 2045, over 75% of average daily energy needs will likely come from medium/heavy vehicles.
- The high levels of demand will require connections to the high-voltage transmission system at many highway fast-charging sites.
- Hence, where possible, locate highway EV chargers near existing transmission lines.
- Build the grid interconnection once, and build it right, rather than planning on a series of upgrades.
- Due to long timelines for upgrading transmission lines, preparation for large sites should begin immediately.
Much of this strikes me as logical, given the underlying premises. But there are two implicit premises that the report fails to consider. First, is it conceivable that the United States will have enough electricity capacity to meet the projected need for an all-electric motor vehicle fleet by 2050 or 2060? Second, is battery electric the most cost-effective approach for heavy, long-distance trucks?
I’ve written about each of these questions in previous newsletters. In the Oct. 2022 issue, I cited an article in The Dispatcher drawing on calculations by energy analyst Roger Andrews. His analysis of the planned decarbonization energy transition in the United States finds that in addition to needing to replace the 61% of electricity generated by fossil fuels, this country would need an additional 49% of zero-carbon electricity to handle the conversion of all surface transportation to electricity. That means replacing 110% of our current electric generating capacity over something like four decades. It is fairly certain that this is not doable. The urgency the Electric Highway study calls for is not as urgent if the planned goal is impossible to accomplish.
In the June issue, I reviewed a detailed study on the electrification of the Class 8 heavy truck fleet carried out by the trucking industry research organization American Transportation Research Institute (ATRI). Its researchers built a model of the life-cycle CO2 emissions of a Class 8 sleeper cab truck with three alternative propulsion systems: internal combustion engine (ICE), battery electric (BEV), and hydrogen fuel cell (FCEV). The study included carbon footprint estimates of vehicle production, energy production and consumption by the truck, and vehicle disposal and recycling. The conclusion was that the ICE’s overall carbon footprint was 3.7 million pounds, the BEV’s was 2.6 million, and the FCEV’s was 2.0 million pounds. In addition, due to the enormous weight of the batteries in the Class 8 BEV, the payload capacity of that big rig was significantly less than that of the FCEV. So hydrogen fuel cells seem more likely to be the way to electrify big rigs.
To be sure, there is far less investment going into fuel-cell Class 8 trucks these days than into BEV Class 8’s. And there are all kinds of questions about the infrastructure needed to refuel FCEVs. But if the electricity needed for an all-BEV trucking future is unlikely to be available in the next 40 years, more research and development on both Class 8 FCEVs and the hydrogen infrastructure they will need would certainly be wise.
In recent years, much of the public conversation on vehicle automation has focused on highly automated self-driving capabilities. While these technologies offer great promise to enhance safety, productivity, and quality of life, the proliferation of lower-level automation technologies that assist rather than replace human drivers is already impacting the driving landscape. Last month, new research conducted by MITRE Corporation at the direction of the Partnership for Analytics Research in Traffic Safety (PARTS), a group made up of the National Highway Traffic Safety Administration and several automakers, was released and found sizeable safety benefits are already being realized from advanced driver assistance systems (ADAS) introduced in recent years.
The MITRE/PARTS study examined crash data on 93 vehicle models from model years 2015 to 2020 that were involved in police-reported crashes in 13 states from Jan. 2016 to Aug. 2021. It examined the following ADAS features already on the market: forward collision warning, automatic emergency braking, pedestrian automatic emergency braking, lane departure warning, lane keeping assistance, and lane centering assistance.
The study found sizable benefits of forward collision warning by itself, with a 16% reduction of front-to-rear crashes and a 19% reduction in front-to-rear crashes involving injuries for vehicles equipped with only forward collision warning. However, it did not find a statistically significant reduction of single-vehicle road-departure crashes for vehicles equipped with only lane departure warnings.
The safety benefits dramatically improved when ADAS warning features were combined with automated features. Front-to-rear crashes with vehicles equipped with both forward collision warning and automatic emergency braking were reduced by 49%, with a 53% reduction in crashes involving injuries. When lane departure warning was combined with lane keeping assistance, all single-vehicle road departure crashes and just those involving injuries were reduced by 8% and 7%, respectively.
The MITRE/PARTS study did not find statistically significant reductions in crashes or crash severity for pedestrian automatic emergency braking, but this may be due to the smaller number of incidents and lower market penetration compared to rear-end vehicle crashes and automatic emergency braking.
Research from the Insurance Institute for Highway Safety (IIHS) published earlier this year suggests pedestrian automatic emergency braking may not yet perform well in the types of conditions where it would do the most good—at night with poor roadway lighting. IIHS found that pedestrian automatic emergency braking reduced pedestrian crashes by 27% in all lighting conditions. However, when it examined only nighttime crashes on unlit streets, it found no difference between vehicles equipped with and without this feature.
The lack of nighttime safety benefits of pedestrian automatic emergency braking may have to do with the limitations of the sensors involved. Most of these systems involve cameras alone, with better performance coming from sensor stacks that contain both cameras and radar. However, IIHS cautions not to overweight their results because pedestrian automatic emergency braking was a new ADAS feature when they conducted their tests, and automakers’ latest iterations may have improved nighttime performance.
With respect to policymakers interpreting these promising early results on ADAS technology performance, I suggest there are three main takeaways. First, they should recognize the value of public-private partnerships such as PARTS in keeping industry and government on the same page. At the early stages of technical development, information sharing can help direct both future research projects and policymaker attention.
Second, policymakers should appreciate that various vehicle automation technology developed by the private sector is already producing safety benefits on the roads today. The standards and test procedures being developed for sensors and ADAS software may help inform future work on highly automated self-driving technologies.
Third, and most importantly, policymakers should avoid overly prescriptive regulatory interventions, such as mandating that current ADAS technologies be equipped on all new vehicles. As the pedestrian automatic emergency braking nighttime performance example makes clear, these new technologies are rapidly iterating and improving. Mandating yesterday’s technology in perpetuity would risk short-circuiting ADAS innovation and potentially delay better technologies from coming to market. Technology lock-in and path dependence at this early stage could mean more fatalities, injuries, and property damage that could otherwise have been prevented. If policymakers do move forward with mandates, they must take care that any minimum performance standards do not prevent better new technologies from replacing inferior old technologies.
ADAS and vehicle automation, in general, remain in the early stages of development. The performance results to date are very encouraging and are bright spots in otherwise gloomy news about recent road safety trends. But policymakers must avoid taking counterproductive actions that would limit innovation and the ensuing safety benefits.
November was not a good month for autonomous vehicle (AV) startup companies. The biggest news was Ford and Volkswagen (VW) shutting down their joint venture AV company, ARGO AI, suffering a $2.7 billion write-off. Despite two previous Ford CEOs having promised self-driving cars would be on sale by 2021, ARGO was nowhere near that goal. Ford and VW each said they would take on some ARGO staff to work on things like Ford’s Level 3 Blue Cruise system.
General Motors’ Cruise venture is still going forward, with a small number of AVs operating at night in part of San Francisco, but Morgan Stanley’s Adam Jonas told The Wall Street Journal that “he was no longer assigning any value to GM’s Cruise driverless-car business in his valuation of the automaker’s enterprise value.” Honda announced on Dec. 1 that it will shift its focus to partially automated vehicles, noting that fully autonomous vehicles are not ready for prime time. Honda is an investor in GM’s Cruise, in addition to doing its own vehicle autonomy work.
Bloomberg published an article headlined “The Auto Industry’s $75 Billion Bet on Autonomy Is Not Paying Off.” Among the developments the article cited was the stock price of AV startup Aurora having dropped from $17.11 in Nov. 2021 to just $1.75 a year later. Several years ago, Intel purchased Israeli startup Mobileye for $15.3 billion but took it public this fall expecting a valuation of $50 billion; it ended up at $21 billion.
Even Waymo, with what has appeared to be unlimited backing from parent company Alphabet (formerly known as Google) and with robotaxis providing limited service in Phoenix, seems to be hitting the pause button. Its co-CEO, Tekedra Mawakana, told the Wall Street Journal’s Tech Live conference in October that vehicle automation “is really about being patient in the learning . . . This is a really long-term opportunity.” She went on to say that lower levels of automation could be achieved in coming years, but that Level 4 could still be years away. WSJ reporter Sebastian Herrera went on to say, “The technology has been beset by high costs, regulatory hurdles, and slower advancements than expected. Now, experts aren’t sure when people will be able to purchase autonomous vehicles.”
I think another factor was an avalanche of venture capital that has poured into startup AV companies during the years when interest rates were near zero. That made speculative ventures look more attractive than was ever likely to be the case. The same phenomenon has driven billions into highly speculative electric vertical take-off and landing (eVTOL) startup companies, hoping to provide affordable air-taxi service. A handful of those might emerge with viable aircraft and workable business models, but it’s still too early to tell.
Last month’s lead article on the future of gas stations as electric vehicles emerge generated more than usual feedback. Ethan Elkind of the University of California-Berkeley pointed out that with extensive research and development money going into improved batteries, the recharging times assumed in the article might come way down, a reasonable point. Were the average recharging time to match the average refueling time at a gas pump, the one-to-six ratio of acreage needed for EV charging stations would get closer to one-to-one. He added that a bigger hurdle for gas stations’ survival may be the availability of charging overnight at home, at least for those who have garages and shell out for their own charging equipment.
Transportation consultant Richard Mudge made a similar point about home-garage chargers handling some of the demand, unlike the case for conventional vehicles where home refueling isn’t an option. As a Tesla owner, he reported rarely needing to stop for more than 20 minutes at a Tesla Super Charger; he also reported that he pays about the same at a Tesla Super Charger as he would pay to refuel at a gas station.
Finally, several readers pointed out a math error in the calculations in the article. The one-to-six ratio remained the same, but the numbers served per day were incorrect. The corrected numbers are 2,016 cars per day for the gas station and 336 cars a day for an EV station occupying the same acreage. Those numbers have been corrected in the online edition.
New Study—Freight Rail Deregulation: Past Experience and Future Reforms
My colleague Marc Scribner’s new Reason Foundation policy brief published today examines “the history of economic regulation of the U.S. railroad industry, discusses emerging regulatory threats, and recommends reforms policymakers can enact to ensure freight rail remains on a strong competitive footing going forward.” You can find the full report here and a short overview here.
I-81 Viaduct Tear-Down Halted by Lawsuit
One of the first urban Interstate projects approved by the Federal Highway Administration to be torn down and replaced by a boulevard—I-81 through downtown Syracuse, NY—has been put on hold. A lawsuit filed by “Renew 81 for All” won an injunction halting initial demolition on Nov. 10. Oral arguments are set to begin in state court on Jan. 12. The plaintiffs object to the “community grid” planned to replace the Interstate and find fault with the environmental review which they say did not consider alternatives with fewer negative impacts on traffic, environment, and nearby communities.
Colorado DOT Rejects I-25 Express Lanes P3 Proposal
CDOT’s Colorado Transportation Investment Office (CTIO) has rejected a $1 billion proposal from global toll road company Roadis to add two express toll lanes each way to a 21-mile stretch of I-25 between Denver and Fort Collins. The only reason given by CTIO was that the proposal failed to pass its CDOT review panel. But Public Works Financing reports that the proposal likely failed due to a new policy from the Colorado Transportation Commission that calls for shifting significant funding from highways to transit projects in the name of reducing greenhouse gas emissions. In September, the Denver metropolitan planning organization (MPO) cut two planned highway expansion projects from its long-range plan.
Pennsylvania Major Bridges P3 Project Back on Track
PennDOT was forbidden by legislation passed earlier this year from using new toll revenues to pay for the replacement or rebuilding of nine major Interstate highway bridges. Inframation News (Nov. 30) reported that the agency has shifted from a revenue-risk to an availability-payment P3 model, enabling the project to proceed. Last month, the state issued $1.9 billion in bonds to substitute for the unavailable toll revenue. The selected P3 consortium, led by Macquarie, is continuing with pre-development work. As of now, the project includes six of the original nine bridges, all on Interstate highways.
Miami Expressways Get a Rating Agency Vote of Confidence
Moody’s Investors Service affirmed its A3 rating on the toll revenue bonds of the Miami-Dade Expressway Authority (MDX) last month and revised the outlook from negative to stable. This good news reflects MDX’s success thus far in litigating against a 2019 state law that sought to abolish MDX and replace it with a state-run toll agency. MDX’s litigation success is based on Miami-Dade County’s home rule authority. Voters there last month approved a ballot measure that would require a popular vote to permit a state take-over of its expressways, airports, or seaport.
$2.7 Billion Harbor Tunnel Going Forward in Sydney
The second stage of developing the new Western Harbor Tunnel in Sydney moved forward with the award of a $2.72 billion contract to Spanish developer Acciona. The 6.5 km tunnel will be excavated beneath the seabed of Sydney’s harbor via a tunnel boring machine (comparable to the Port of Miami tunnel project, but much longer). The project is being developed by the New South Wales government, but as with several other such projects, it is considered a candidate for privatization after it is completed, according to Inframation News.
West Virginia Turnpike Travel Plazas Makeover
Following the lead of other major turnpikes (in Florida, Indiana, New York, etc.), the West Virginia Turnpike last month announced a $152 million program to upgrade its three service plazas. They will have multiple food outlets, expanded truck parking, a convenience store, and EV charging stations. The Parkways Authority has studied the successful (typically 30-year) public-private partnerships used for upgrades by other toll roads. It has held discussions with provider Areas USA and plans to release an RFP for reconstruction of the first plazas by early next year,
Musk Tunnels Going Forward—or Not?
The Wall Street Journal recently ran a lengthy front-page article reporting that a growing number of municipalities that have had discussions about new tunnels with Elon Musk’s Boring Company are dismayed by the company’s lack of follow-through. Two days later Inframation News reported that Boring Company and the Alamo Regional Mobility Authority in San Antonio are in active discussions about their plans for a tunnel linking downtown with the airport. However, the RMA now wants the project to be done in two steps: an initial one-mile tunnel linking downtown to its Pearl District, to be followed (if successful) by extending the tunnel to the airport. The plan continues to rely on Boring Company paying all construction costs, which it hopes to recover from customer fares.
EVs Are More Damaged in Crashes
Insurance company AXA Switzerland conducted crash tests and data analysis this year and concluded that EVs yield more expensive damage claims from collisions than regular cars, for two reasons. First, because they can accelerate faster than conventional cars, drivers may drive them more recklessly. Second, due to their increased weight—typically about one-third more than a comparable non-EV—their damage from a crash is greater. AXA also reported statistics which “show that drivers of electric cars cause 50 percent more collisions with damage to their own vehicles than drivers of [cars with] conventional combustion engines.”
Tesla Announces First Class 8 Truck Deliveries
On Dec. 1, Tesla delivered to Pepsico an undisclosed number of its Semi, a Class 8 tractor-trailer with a reported range of up to 500-miles at gross weight of 82,000 pounds. Pepsico said they would have 15 Semis in place at their Frito-Lay facility in Modesto, CA, by year-end. Tesla has said it will produce 50,000 Semi trucks in North America by 2024. Tesla lists the vehicle’s energy consumption at 2 kWh/mile and its drag coefficient at 0.36, about half that of a conventional diesel Class 8 rig.
Four Teams Lining Up for Puerto Rico Toll Road P3 Leases
Inframation News reported last month that “at least four” teams have submitted their qualifications for long-term P3 concessions of a bundle of four state-run toll roads. The three the newsletter identified are Abertis, Plenary Group, and Sacyr. The state P3 Authority has estimated the value of the long-term lease at as much as $2.5 billion. The toll roads total 622 lane-miles, with PR-52 generating the majority of the annual toll revenue.
North Carolina Express Toll Lanes Attract Interest
While the Charlotte-area MPO has not yet decided to recommend a near-term P3 procurement rather than a farther-off NCDOT procurement of new express toll lanes on I-77 between the city and the South Carolina border, the possibility of a competitive P3 procurement has led to expressions of interest from other potential developers (though no names have yet surfaced). NCDOT studies of express lanes for that corridor date back as far as 2010.
GM Seeks to Operate New Driverless Vehicle in San Francisco
GM’s Cruise division has developed a driverless shuttle without any onboard driver controls. Named “Origin,” the vehicle seats four. Cruise has asked the state motor vehicles department for a permit to carry out test runs of Origins at night in a limited area of San Francisco. The company’s existing robotaxi service in the city operates only at night, and those vehicles have ordinary on-board controls, though they now operate without a safety driver on board. The Origin is Cruise’s first vehicle designed from scratch to be operated without a driver on board.
Cincinnati Selling Its Freight Railroad
In an example of asset recycling, Cincinnati is selling its Cincinnati Southern Railway (CSR) to Norfolk Southern, one of the major Class 1 railroads. CSR extends 337 miles connecting Cincinnati to Chattanooga, TN. CSR is operated by a subsidiary of Norfolk Southern under a lease that expires in 2026. The sale of the city-owned railroad is expected to yield the city $1.62 billion.
Home Buyers Moving Farther from Jobs
Data from the National Association of Realtors released last month show that the medium distance people moved from their previous residence was 50 miles in the year ended June 30, 2022. That’s a huge increase from the previous median of 15 miles (over the previous five years). This change reflects the trend to home-based work and the large consequent decline in mass transit usage.
To Hyperloop or Not?
Politico reported (Oct. 23) that Transportation Secretary Pete Buttigieg thinks hyperloop is “super interesting” but he doesn’t think the federal government should subsidize it. The same article noted Elon Musk’s April comment that his Boring Company will “attempt to build a working hyperloop,” though no one else has succeeded—and that Musk several years ago disavowed any interest in developing the idea.
Correction to Last Month’s Issue
Reader Sam Schwartz spotted an error in last month’s News Note about record sales of gasoline in fiscal year 2022. Drawing on a report from Eno’s Jeff Davis, the note said that a record 6.8 billion gallons were sold in FY 2022. What it should have said was that the 2022 total was 6.8 billion gallons more than were sold in 2021. We apologize for the error, which was ours, not Jeff’s.
“The delay of the [Maryland] OP Lanes concession into a new administration is especially striking because the project had such a strong democratic mandate. Governor Hogan actually proposed the initiative before his second term as governor, then campaigned on the initiative when he was up for re-election. Hogan then won re-election by a 12-point margin in a historically blue state. Even more striking is that Hogan made infrastructure investment, and the OP Lanes initiative in particular, the centerpiece of his administration. Can a project with that much democratic support really be delayed by a small, vocal, well-resourced opposition for the entirety of a governor’s term?”
—Michael Bennon, “Maryland OP Lanes Commercial Close Delayed,” Public Works Financing, Nov. 2022
“I was at a conference recently where a representative of a major Commonwealth government unit tasked with assessing the validity of benefit/cost assessments for projects said they green-lit a major road project in Australia’s second-largest city, though it had a benefit/cost ratio of 0.7, because . . . honestly, I am not sure why, something maybe about benefits that weren’t included in the benefit/cost analysis? So one must call BS on this. If there are other benefits, monetize them. Implicitly, the other benefits were worth more than 30% of the cost of the project overall if full benefits exceeded full costs. But if they are so squirrelly that one cannot monetize them, why? If practice does not incorporate full benefits (and full costs), again, why? I am as skeptical of benefit and cost practice as anyone, but I still think we should do things (and only do things) where the benefits are greater than the costs. We should, of course, debate what are the benefits, the categories of benefits, their value if realized, and the likelihood of them being realized. Similarly with costs. But if you insist something is a benefit, or a cost, demonstrate it. Otherwise, we can just follow politicians’ whims—and that is what B/C analysis often devolves into, contorting ‘facts’ into a nice rhetorical package to satisfy a politician looking for votes or dollars which has been green-eyeshade-washed.”
—David Levinson, “Benefits Should Outweigh Costs,” Transportist, Dec. 2022
“What happened to the goal of ‘walkable cities”? Back in 1972, when I finished my graduate studies in architecture and urban planning, the accepted view on city mobility was that the sidewalks were for pedestrians, and the streets were for cars, taxis, trucks, buses, motorcycles, and bicycles. Sidewalks were not extensions of streets or the adjoining buildings. They were meant to be walked on, not to be cycled on or for parking bicycles, or to be used as additional seating for restaurants or additional display space for shops. It was not accepted practice to place signs in the path of pedestrians. . . . In the U.S. and continental Europe, pedestrians could not expect cars to stop automatically at crosswalks unless there were red lights, but if you did have a walk signal, you didn’t have to worry about cyclists and e-scooterists ignoring the red lights in both directions and sending you to the hospital—or worse.”
—Michael Sena, “Sidewalks: Refuge, Promenade, Chaos Strip,” The Dispatcher, Dec. 2022