- Challenges to priced managed lanes
- How feasible are hydrogen fuel-cell trucks?
- Nationwide electronic tolling gaining ground
- Monorail or bus rapid transit?
- 40 years of railroad deregulation
- News notes
- Quotable quotes
New Report Addresses Challenges to Priced Managed Lanes
In the wake of political attacks on express toll lanes (aka priced managed lanes) in California, Texas, Charlotte, and Miami, several years ago the Transportation Research Board Managed Lanes Committee submitted a proposal for a National Cooperative Highway Research Program study of these problems and how state transportation departments are dealing with them. The 70-page report (plus appendices) is a valuable contribution to this previously neglected subject. (“Emerging Challenges to Priced Managed Lanes,” NCHRP Synthesis 559, Transportation Research Board, 2020)
The study team focused on four main concerns: limited public understanding of what priced managed lanes (MLs) are and how they work, operations and performance monitoring practices, enforcement problems (of both tolls and occupancy), and price controls on toll rates. The report also includes six case studies of priced MLs that have faced serious political opposition.
The researchers carried out a survey of all 50 state departments of transportation (DOTs) to find out if they are considering priced MLs. They found that 16 states either have such lanes in operation or are in the planning stages. The five states now planning them, according to their DOTs, are Arkansas, Louisiana, Illinois, Oregon, and South Carolina. The new report should be of particular value to these five would-be developers of priced MLs.
There is so much useful material in the synthesis that I am going to defer discussion of the five case studies until a future newsletter issue. This month we’ll focus on some of the broader findings and discussions.
One very useful piece of information concerns the federal remedy if a managed lane (priced or otherwise) fails to maintain a minimum average operating speed of 45 miles per hour 90 percent of the time during peak periods (p. 11). A managed lane that fails this test is considered “degraded,” and the federal remedy is either “increasing the occupancy requirement, varying the toll charged to vehicles to reduce [peak] demand, increasing the available capacity of the lane, or discontinue allowing in non-HOV vehicles.” If the lane operator fails to submit an acceptable plan within 180 days, or fails to correct the problem, “FHWA may enact appropriate program sanctions until performance is no longer degraded.” Unfortunately, quite a few overloaded MLs are not in compliance, which the report does not mention.
The report has a strong discussion of the problem of toll exemptions (p. 12). Elected officials seem to like to give freebies to politically favored groups, such as operators of hybrids and electric vehicles, two-person carpools, etc. They ignore the serious consequences of overloading the MLs, which as the report states “has the potential to increase congestion, reduce revenue, and diminish the ability to control traffic.” If the purpose of the pricing is to control congestion, allowing a majority of the users to pay zero drastically undercuts the power of pricing, re-introducing congestion. Both California and Virginia have recently reduced the categories of vehicles allowed free passage, but as the report documents elsewhere, there are still many peak periods when there are so many freebies that the “priced” MLs revert to high-occupancy vehicle(HOV)-only. This problem exists on both I-10 and I-110 in Los Angeles, I-15 in San Diego, SR 237 in Silicon Valley, and SR-167 in Seattle, and perhaps elsewhere.
The equity implications of priced MLs are briefly discussed, with the main focus being income equity. Unfortunately, the Synthesis report was completed prior to publication of the landmark study of equity in the I-405 MLs in Seattle, by Hallenbeck, et al. of the University of Washington (see News Notes, below), which found the greatest net benefit of using those MLs (value of time minus cost of the toll) accrued to the lowest income quintile among users. And for enabling access to MLs for those without credit cards, the report notes (p. 24) that Florida DOT is making available a $5 transponder that can be refilled using cash at grocery stores and pharmacies. Not noted is that this innovation was pioneered on the San Juan, PR toll roads 20 years ago.
Enforcement has two dimensions. Toll enforcement is generally well in hand, since those who avoid paying tolls via no or invalid transponder can be identified by the vehicle license plate number and billed. But those who steal service by pretending to be legally toll-exempt HOVs are a much larger problem. As the report states, “automated technology capable of enforcing vehicle occupancy requirements does not exist.” People using switchable transponders to indicate the number of occupants are very difficult to identify if they lie; this is basically an honor system, and estimates of cheating are 30 percent or higher on many priced MLs. Again, this kind of cheating, besides being seen as unfair, also undercuts the system’s pricing power.
The discussion of the harm caused by legislatively imposed price controls (referred to as toll caps) deserves more space than I have room for this month. I will address it, based on the case studies, in a subsequent newsletter issue. For now, I can’t resist pointing out a statement (on page 4) that strikes me as bizarre, at least as presented with no context. Here it is: “Once the objective of the priced managed lane project is met, the tolls may be removed.” The citation is to a previous (2015) report, “Guidelines for Implementing Managed Lanes,” NCHRP Report 835, written by a group of very knowledgeable people. I welcome an explanation of when and why tolls should ever be removed from a priced managed lane.
For several months I’d been planning to write an article about the potential of hydrogen fuel cells to electrify heavy (Class 8) trucks. And then the Nikola fiasco happened.
If you haven’t been following this, a short-seller named Hindenburg Research last month released a piece on the much-hyped start-up company, basically alleging that what it has been promoting is what Silicon Valley calls “vapor-ware.” The report questioned many of Nikola’s promotional claims, stating that the company’s video showing the hydrogen-fueled Nikola One speeding along a Utah highway was actually unpowered, and was towed up a hill and videoed coasting downhill. Nikola weakly replied that it never actually said the truck was operating via a hydrogen fuel cell. There were many other allegations, questioning claims of large orders and receding deadlines for accomplishments such as building its first hydrogen refueling station, allegations of hiring some unqualified people, etc. Moreover, Nikola’s 14,000 “orders” for $10 billion worth of big-rig trucks require zero deposit money and are easily cancelable.
The negative reaction was strong enough for the company to dump founder/executive chairman Trevor Milton. Nikola’s stock suffered a large decline, and General Motors has yet to finalize the deal announced two days before the Hindenburg report. So what does this mean for the future of hydrogen fuel-cell big-rigs?
First, you should know that many truck producers (both long-established and startups) have prototype hydrogen fuel cell trucks in operation. A drayage operator serving numerous U.S. ports has been testing such trucks—from Kenworth, U.S. Hybrid, and TransPower—for several years. Cummins has acquired four companies to focus attention on hydrogen fuel cells. In Europe, Daimler and Volvo in April announced they were teaming up to develop hydrogen fuel cells for trucks. Fiat’s spun-off truck producer, CNH International, is also planning to launch a fuel-cell truck (in 2023). In Asia, both Hyundai and Toyota are investing seriously in hydrogen fuel cell trucks.
So I still think hydrogen fuel cells are a potential winner, especially for heavy-duty, long-haul trucking (Class 8), for three reasons. Fuel cells appear to provide about double the range for heavy trucks compared with battery electricity. Second, those fuel cells can be refilled in about the same amount of time as filling a nearly empty diesel tank, rather than an hour or more to recharge a battery-electric big rig. Third, for the same amount of power, a hydrogen fuel cell system weighs significantly less than the massive battery pack needed for a Class 8 truck—and more truck weight means less payload capacity.
Alas, hydrogen faces the same chicken-and-egg problem confronted by early gasoline vehicles: there were hardly any gas stations then, and there are close to zero hydrogen refueling stations now. Nikola’s business plan claimed to solve this problem by building a network of refueling stations and instead of selling the trucks, leasing them along with hydrogen fueling service. But no estimated lease rates or estimated investment needed for Nikola’s refueling network have ever been released.
Moreover, the rationale for electrifying trucks—battery or hydrogen—is to eliminate tailpipe emissions. But generating hydrogen itself is expensive and energy-intensive, especially if what’s desired is “green” hydrogen. If the electricity used comes from coal, a fuel-cell truck is hardly “green.” Conventional hydrogen derived from natural gas is deemed “gray” and costs about $1.50/kg to produce. “Blue” hydrogen is from natural gas but with carbon capture and storage, at about $3/kg. But “green” hydrogen, produced by solar or wind electricity, is $9 to $19/kg. (I could not find figures for “green” hydrogen produced using nuclear power.)
So despite the relatively better fit of hydrogen fuel cells for long-haul Class 8 trucks, the costs involved in providing acceptable fuel and the refueling infrastructure remain a big question mark.
Nationwide Electronic Tolling Interoperability Getting Closer
There is considerable progress on the long-sought goal of highway users needing only a single transponder and a single account to use every toll bridge and highway across the country. The good news includes more states joining the E-Zpass consortium and expanded availability of nationwide transponders.
In July, both Florida’s Turnpike (operator of the statewide SunPass system) and Georgia’s State Road and Tollway Authority announced that they were joining the E-Zpass system, which includes most of the toll roads and bridges east of the Mississippi. The Central Florida Expressway Authority (which has its own electronic tolling system) had previously joined E-Zpass, and last month the Tampa Hillsborough Expressway Authority announced that it, too, was joining E-Zpass. But even bigger news last month was the announcement that Minnesota’s MnPASS system was also joining E-Zpass, the first tolling system west of the Mississippi to do so.
The ideal of a single transponder that will work with every electronic tolling system nationwide is moving closer. In fact, it has been available for several years for truck fleets, thanks to service provider Bestpass. It has long offered trucking companies a single account with a single monthly invoice, but truck fleets operating on both sides of the Mississippi still needed multiple transponders (e.g. for the Kansas/Oklahoma/Texas region and another for California/Colorado) in addition to an E-Zpass transponder.
But in 2015 Bestpass introduced a nationwide transponder produced by tolling equipment provider TransCore, along with a single toll account. While that option was popular, for some fleets it was overkill, given their service patterns. So last month Bestpass announced an additional option. The nationwide transponder has been rebranded as Complete Pass Scout, but for those not needing that capability, the new Horizon Scout transponder offers tolling for the non-E-Zpass states (California, Colorado, Washington in the west; Kansas, Oklahoma, Texas in the middle; and South Carolina in the east).
TransCore’s nationwide transponder is available for personal cars, but a driver buying one would still be stuck with bills from multiple toll agencies. But one auto company is taking on this challenge. Audi has just announced its Integrated Toll Module which provides a nationwide transponder linked to a single account. The transponder is integrated into the multi-function rearview mirror provided by Gentex and will be available on most of Audi’s 2021 vehicles.
An Audi press release and a piece from Auto Connected Car News provide a clue about how Audi has solved the single customer account problem. The Integrated Toll Module project was developed by Payviam, a subsidiary of Bestpass, working with Audi’s own engineers. The Audi press release says “technology adapted from the commercial trucking industry that uses greatly downsized hardware for automotive applications.” The article also quotes Bestpass’s CEO on their role in the Audi project.
I have long thought that electronic tolling interoperability would be more likely to arrive via universal transponders than by getting all toll facility operators to agree on a single tolling protocol and replacing all their equipment. Bestpass and Audi are blazing that trail.
Monorail or Bus Rapid Transit?
Last month, New Jersey Transportation Commissioner Diane Gutierrez-Scaccetti discussed with legislators the 15 toll road widening projects promised by the New Jersey Turnpike Authority’s $24 billion 10-year capital plan. When it came to the widening of portions of the Turnpike and the Garden State Parkway where there is local opposition, she told legislators that instead of widening, “We’re looking at the median to figure out if it could be an ultra-light rail, almost monorail type system as a means to move people through congested areas.” But she also noted that bus rapid transit could be an alternative.
This is not the first time a monorail has been proposed as an alternative to lane-additions. Last year in Maryland, there was local agitation for building a monorail in the median of I-270 rather than Gov. Larry Hogan’s ongoing plan to add express toll lanes to that highly congested freeway. As the express lanes project has moved forward, the monorail idea seems to have died, and that’s a good thing. Here’s why.
People using a congested highway are not intending to go from one station to another. They want to go from a starting point (e.g., their home) to a destination (a workplace, an airport, a vacation venue, etc.) They don’t want to drive from home to station, wait for a train/monorail, and then find some other mode at the other end to get them to where they actually want to go. And that’s the big advantage of bus rapid transit (BRT)—if done right.
By “done right” I mean not by configuring a BRT system to mimic light rail or monorail (station to station). To attract a large base of customers, a proper BRT system should aim to minimize or eliminate transfers—i.e., coming as close as possible to the door-to-door service that’s provided by personal vehicles. Hence, a BRT bus should begin its journey picking up customers close to where they live, then proceed to the exclusive (or virtually exclusive) lane, and after exiting that lane proceed to drop off customers at various locations in, say, a business park, downtown, or another set of destinations.
A growing number of large metro areas are expanding the set of variably priced express toll lanes on their freeway systems—and including regional BRT service as an integral part of the plan. These BRT services don’t have exclusive busways, but they have a transit agency’s next-best thing: virtually exclusive busways (VEBs), thanks to the variable pricing that keeps traffic flowing at a reasonable rate of speed even during peak periods. Transit agencies don’t have to raise large amounts of capital to build these VEBs. In many cases, the toll revenue from drivers covers much (or in some cases all) of the capital costs. Transit agencies need only pay for enough buses to meet the increased demand, and perhaps partnering with the state DOT to build park & ride lots near customers’ neighborhoods.
Transportation planners in metro Atlanta are moving in this direction, largely forsaking very costly expansion of the 48-mile heavy rail system or still-costly light rail corridors in favor of BRT. (David Wickert, Atlanta Journal-Constitution, Aug. 19, 2020) Thus far, the plan appears to be a mix of new mostly bus-only lanes on arterials and BRT service on the expanding set of express toll lanes. Taking away lanes on existing major arterials risks making congestion far worse, unless very large numbers of drivers on those arterials switch to BRT. So Atlanta counties should proceed very cautiously, insisting on quantifying the effects and side-effects of the first project or two before committing to more bus-only lanes. A number of metro areas (including Los Angeles) have achieved significant ridership increases with “BRT Lite” that runs limited-stop BRT service in regular traffic lanes.
Forty Years of the Railroad-Saving Staggers Act
By Marc Scribner
Today, Oct. 14, is the 40th anniversary of the Staggers Rail Act, which President Jimmy Carter signed into law in 1980. It eliminated or reduced many economic regulations on U.S. freight railroads that had accumulated since the Interstate Commerce Act of 1887. This partial deregulation has allowed railroads to modernize and become competitive again. Unfortunately, some shippers wish to turn back the clock and impose the same types of economic regulations that nearly destroyed America’s private railroads in the 20th century. Rather than chip away at the Staggers Act, Congress and regulators should examine further deregulatory reforms to ensure freight rail remains a vibrant transportation mode in the 21st century.
For generations, U.S. policy toward railroads was a one-way ratchet, with Congress and the Interstate Commerce Commission (ICC) increasing the stringency of price controls, service mandates, and other rules restraining the business operations of railroads. During World War II, railroads subsisted on a surge of wartime traffic as well as strict rationing of tires and gasoline that restricted roadway competition. But following the demilitarization of the economy, trucking competition, and the rise of air travel—coupled with the stultifying railroad regulatory environment—led to a near-terminal decline in the industry.
The 1970 bankruptcy of Penn Central remained the largest corporate bankruptcy in U.S. history until it was eclipsed by Enron’s collapse in 2001. Basic maintenance had fallen by the wayside and “standing derailment” entered the industry lexicon, which referred to dilapidated track infrastructure crumbling away and causing stationary railcars to tip over. Congress’s creation of Amtrak and Conrail as emergency measures underscored the dire straits of the railroad industry. It became clear to policymakers that America’s private railroads would not survive unless they were freed from an endless series of government prohibitions and mandates.
Fortunately, a bipartisan consensus formed, culminating in the Staggers Rail Act of 1980. Most importantly, the Staggers Act legalized contract rates that allowed railroads and their customers to negotiate on price and service much like business transactions that occur in other sectors of the economy.
The newly freed freight railroads began to see their futures brighten for the first time in more than a generation, and the revived industry greatly benefited both shippers and consumers. In the 40 years since the Staggers Act was enacted, inflation-adjusted average freight rates are down more than 40 percent, productivity is up 150 percent, and safety is at an all-time high—all while freight railroads invested more than $700 billion of their own funds back into their networks. In a matter of decades, America’s freight railroads went from being at death’s door to being the envy of the world.
The ICC’s power over freight railroads was greatly curtailed by the Staggers Act. ICC commissioners in the years following its enactment adopted a more cautious approach to railroad regulation, preferring markets over dictates. In 1995, Congress abolished the ICC and created the Surface Transportation Board (STB) to administer the remaining ICC economic authorities. As with the ICC for its last 15 years following the Staggers Act, the STB has been largely conservative in the wielding of its economic regulatory power. However, in recent years, some large industrial shippers led by the chemical industry have stepped up their efforts to have the railroads re-regulated for these shippers’ narrow perceived benefit.
The STB is currently considering several re-regulatory proposals that include making it easier to force competing Class I railroads to interchange each other’s traffic and impose price controls. Somewhat tellingly, when rail carriers petitioned the STB to adopt the same type of benefit/cost analysis for economically significant regulations that have long been required of departmental agencies of the federal government, the rent-seeking shippers balked.
This type of routine economic analysis has protected railroads from undue regulatory burdens in the past. When the Federal Railroad Administration (FRA) proposed a rule to mandate crew-size minimums at the behest of labor unions, it was unable to quantify benefits, and the Office of Management and Budget had FRA eliminate language suggesting the contrary. The proposed rule was later withdrawn, with FRA citing a lack of evidence supporting its earlier proposal.
As an independent agency, the STB is not required to adhere to Executive Order 12866’s regulatory review provisions like the FRA, but it could adopt internal processes mirroring those of E.O. 12866. Both the Federal Communications Commission and Securities and Exchange Commission have in recent years independently chosen to implement robust economic analysis for major rules, and the STB should follow suit.
Another troubling possibility, in light of a report from the STB’s Rate Reform Task Force, is that the STB could turn revenue adequacy accounting on its head in a way Congress never intended. A railroad is considered by the STB to be “revenue adequate” when an estimated return on net investment equals or exceeds the estimated cost of capital for the industry. Initially created by Congress under the Staggers Act as an imperfect way to gauge the health of railroads in response to deregulation, recent regulatory proposals may transform revenue adequacy into a revenue ceiling. The experience with a “fair return” regime during the 1920s was dreadful and deterred investment, but at least then Congress had explicitly authorized it before eliminating it during the Great Depression.
Some railroads have suggested revising revenue adequacy determinations to better reflect economic reality. To that end, University of Chicago economists Kevin Murphy and Mark Zmijewski have proposed an alternative revenue adequacy methodology that would increase the accuracy of the financial performance and cost of capital estimates and consider other sectors of the economy in order to avoid the circuitous calculation problems inherent with STB’s current revenue adequacy accounting.
Congress and railroad regulators should avoid their past missteps. The transportation sector as a whole is undergoing rapid change, with new automation technologies, alternative fuels, and other innovations promising to reduce costs and improve service for customers. Rather than doling out favors to short-sighted special interests, policymakers should work to identify and remove any remaining impediments to modernization. The 40 years of success since the enactment of the Staggers Act suggest this would be less about charting a specific path forward and more to do with getting out of the way of dynamic market processes.
Full Study on Express Toll Lane Equity Now Available
The University of Washington study that analyzed the net benefits among users of the express toll lanes on I-405 in metro Seattle is now available online. Analyzing every paid transaction in the express lanes for 2018, the research team found the greatest net benefit (value of time saved minus cost of toll) accrued to users in the lowest-income quintile, and the lowest net benefit to those in the highest-income quintile. This is a significant refutation of the “Lexus Lane” accusation thrown at priced managed lanes.
Proposed Federal P3 Policies
In the September issue of Public Works Financing, my column discussed a new Reason Foundation proposal for several policy changes that could jump-start private investment in highway public-private partnership projects. They include expanding the scope of tax-exempt private activity bonds (PABs) and liberalizing the Interstate System Reconstruction and Rehabilitation Pilot Program, opening it to all states but with several public interest provisions.
Truckers Continue Legal Battle Against Rhode Island Truck-Only Tolls
A federal district court judge declined to issue an injunction against the truck-only tolls that are now in operation at six of the 12 planned locations. But Judge William Smith ruled that the legal challenge to the tolls could continue, on grounds that there was a reasonable chance that the American Trucking Associations (ATA) could prevail in their arguments that the tolls (a) discriminate against out-of-state truckers and (b) violate the Interstate Commerce Clause of the Constitution.
California Bans Gas-Fueled Cars? Not Quite
Many media outlets reported last month that California Gov. Gavin Newsom had signed an executive order that aims to ban the sale of petroleum-fueled cars in the state by 2035. But as Scott Shackford pointed out on Reason.com, Newsom’s executive order merely directs the California Air Resources Board (CARB) to establish a “goal” and regulatory strategy along those lines. Newsom’s executive order also calls on legislators to ban fracking in the state, which would likely make electricity even more costly—not a strong incentive for people to buy electric vehicles.
Searching Out Cost-Effective Bus Rapid Transit
Most studies show that, at least in the United States, BRT costs a lot less than rail transit. And at least some forms of BRT can generate passenger volumes that exceed those of some light rail lines. But which are which, and why? Cato Institute transportation analyst Randal O’Toole has posted a useful discussion of the different BRT types, accompanied by a city-by-city run-down. You may not agree with all his assessments, but this is the kind of thinking transportation planners need more of.
Cornell Students: Fiscal Risks in Proposed Florida Toll Roads
Cornell Consulting, a student-run management firm at Cornell University, carried out a Monte Carlo simulation study using 500 combinations of risk and financial uncertainty for each of three proposed M-CORES north-south toll roads in Florida. Their analysis concluded that none of the three projects passed the required test for new toll roads that would be part of the Florida Turnpike system: that it be able to generate enough revenue to eventually pay back its construction costs by year 15. And only one of the three would have a debt service coverage ratio after 12 years of 71 percent, and none would have the required 100 percent DSCR at 30 years. Florida DOT points out that no professional traffic and revenue studies have yet been completed on these proposed toll roads.
Tesla’s Battery Day Yields Not Much
The much-hyped “battery day” held by Tesla last month, at which many expected Elon Musk to announce a million-mile battery, “left many experts scratching their heads over what they saw,” wrote Andrew Hawkins of The Verge. Musk announced several visionary ideas, but it was not clear if any of them are close to being viable, including a proposed lithium mine in Nevada.
Virginia’s Elizabeth River Crossing Concession Is for Sale
Inframation News reports that four teams have formed to bid for the remaining years of the 58-year toll concession held by Macquarie and Skanska. RBC Capital Markets is managing the auction of the concession for the tunnel project that opened to traffic in 2016. The four teams are Abertis/GIC, Globalvia/DIF, ROADIS, and Transurban. Due to reduced traffic levels this year, S&P reduced the project’s bond rating to BBB- with a negative outlook. The winning bid will be one of the first U.S. indications of the post-Covid value of toll concessions.
$3.6 Billion Houston Highway Revamp Funded
Texas DOT announced state and federal funding commitments for a set of freeway improvements to I-10, I-45, I-69, and SH-288 totaling an estimated $3.6 billion. Due to the legislative moratorium on P3 projects and tolling, the entire project is being funded by TxDOT’s limited tax sources, rather than being leveraged by toll revenues that could have been derived from express toll lanes on some or all of these roadways.
Highway Worker Deaths Miscounted as Pedestrians
The American Road & Transportation Builders Association (ARTBA) has called attention to a flaw in counting deaths that take place on roads and highways. U.S. DOT and NHTSA classify as “pedestrians” all those who die when standing on the pavement, when approximately 200 such deaths each year are actually workers on highway projects. Because there is little tracking of those deaths, all the emphasis on non-vehicle deaths is focused on actual pedestrians. ARTBA is urging that NHTSA create a separate category in its Fatality Analysis Reporting System (FARS) for road worker deaths.
Alabama Voters to Weigh In on New Toll Road
On their November ballots, voters in Baldwin County, Alabama, will be asked to support or oppose a tolled roadway connecting I-10 with I-65. The new corridor would extend the Baldwin Beach Express toll road; it would also provide a higher-capacity hurricane evacuation route.
Bestpass Launches Thought-Leader Series
Bestpass, which provides toll-management and other services for trucking fleets, has launched a new website which includes a new series of white papers on aspects of tolling. The current white paper is “Toll Management: Why Transponders Still Matter in a License Plate World.” The website is Bestpass.com.
New Jersey Increases Toll Diversion
Motorists and truckers in New Jersey were recently hit with very large toll rate increases: 36 percent on the New Jersey Turnpike, 27 percent on the Garden State Parkway, and 37 percent on the Atlantic City Expressway. While customers are promised a number of improvements (including widening of 15 sections of the Parkway and Turnpike), they will also be subjected to a large increase in toll-revenue diversion. In fiscal year 2021 some $375 million will be diverted to New Jersey Transit; the take will increase to $525 million in FY 2022. That tops the egregious $450 million per year that Pennsylvania Turnpike customers have been subjected to for the past decade.
Autonomous Cars Being Taught to Read Body Language
Human drivers understand a traffic cop’s or highway worker’s hand signals, a bicyclist’s turn indication, and other gestures, but this is difficult for artificial intelligence (AI) systems to do. IEEE Spectrum reports that AI developers at GM’s Cruise division are teaching AV software to learn and interpret a large variety of body motions, including direction signals. The technique involves outfitting humans with microelectromechanical systems (MEMS) to train the AI what various body positions mean. Go here.
New CEO for Cavnue in Michigan
Tyler Duval, former CEO of the SH 130 Concession Company in Texas (and former McKinsey analyst), has been appointed as CEO of Cavnue, the Sidewalk Infrastructure company that plans to develop a highway corridor in Michigan for connected/autonomous vehicles (CAVs). The project was discussed in an article in last month’s issue of this newsletter.
Honolulu Ends Heavy Rail P3 Procurement
The city/county of Honolulu has terminated the P3 procurement process aimed at developing the remaining sections of its costly and over-budget elevated rail project. Two teams had been short-listed for the project, headed by ACS/Dragados and Plenary/Parsons. The Honolulu Authority for Rapid Transportation (HART) will apparently consider other procurement methods, such as design-build and design-bid-build.
Two More Go to All-Electronic Tolling
All seven state-owned toll bridges in the San Francisco Bay Area have made cashless tolling permanent so that drivers may now continue through the toll plazas without stopping. That should reduce bottlenecks leading up to the toll plaza on the San Francisco/Oakland Bay Bridge. Also, the New York Thruway, which has completed installing all-electronic tolling equipment at all tolling locations, will no longer accept cash starting in November.
Brightline to Issue Green Bonds
Inframation News reports that Morgan Stanley is marketing $3.2 billion in tax-exempt “green bonds” for the company’s planned Xpress West passenger rail project linking Victorville, CA with Las Vegas. Tranches are offered for bonds of 5, 7, 10, and 30 years. The bonds are unrated (i.e., junk). Co-managers of the bond issue include Bank of America, Citi, Deutsche Bank, Jefferies, Piper Sandler, UBS, Academy Securities, and Oppenheimer.
NCSL Infrastructure Discussion Available Online
Last month I took part in an hour-long panel discussion on post-Covid infrastructure, organized as part of a virtual conference by the National Conference of State Legislatures. Beth Osborne of Transportation for America and I discussed, agreed, and disagreed on a range of topics, moderated by Tanya Snyder of Politico. For a limited time, video of the session is available here.
Transit Costs Project Launches Website
The Marron Institute at New York University has an important project looking into why transit projects in New York City cost up to 20 times as much per mile as similar projects in major cities overseas (such as Seoul and many others). The project database encompasses projects in over 50 countries with more than 10,000 kilometers of urban rail built since the late 1990s. The project will also carry out six in-depth case studies, drawn from the many projects in the database. The website is transitcosts.com.
“According to Nicolas Firzli, Director-General at the World Pensions Council in Paris, ‘U.S. public pensions clearly tend to allocate substantially less to infrastructure (barely 2 percent of their assets) than large Canadian and Australian pension funds, which typically allocate 10 percent of their overall holdings to infrastructure, five times more than their U.S. peers.’ So without raising taxes, or taking on more debt, the U.S. has a ready war chest of over $2.5 trillion to move directly into infrastructure, while simultaneously—indeed consequently—generating higher returns for American retirees.”
—Norman Anderson, “A $1.6 Trillion Pension Fund Gap—Is Infrastructure Investment the Answer?” Forbes.com, August 25, 2020
“With North Carolina’s limited use of toll roads, it may be difficult to envision a future where tolling is a dynamic, fundamental component of NCDOT’s transportation revenue portfolio. As the state’s population grows and converges on urban and suburban communities, new toll strategies will need to be considered to address congestion on its highways. Expanding the use and types of tolling is an option that could give legislators the ability to remain economically competitive by improving the flow of commerce. The implementation of a more-comprehensive tolling strategy, such as on Interstates, may also be considered as a means of replacing some or all of NCDOT’s existing revenues with user fees through tolling.”
—“The Future of Tolling in North Carolina,” NC First Commission, Issue Brief: Edition 10, June 2020
“Today, state and local leaders are incentivized to ignore maintenance (which is typically not visible to the public), so they can spend those funds elsewhere. Yet poor maintenance practices damage the long-term quality of infrastructure and result in a maintenance backlog that must be met by future taxpayers. Not surprisingly, delaying maintenance also markedly increases overall life-cycle costs. As Larry Summers neatly summarized, ‘Prevention is cheaper than cure. Waiting for the bridge to collapse is much more expensive than buttressing the bridge before it collapses.’ In addition, estimates show that investing in maintenance pays off considerably, with a 25 to 40 percent economic rate of return, potentially more in some cases.”
—D. J. Gribbin (Madrus LLC), “On Paving the Way for Funding and Financing Infrastructure Investments,” testimony before the House Ways & Means Committee, January 29, 2020