Surface Transportation News: Private infrastructure financing growth, intercity buses rebound, and more
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Surface Transportation Innovations Newsletter

Surface Transportation News: Private infrastructure financing growth, intercity buses rebound, and more

Plus: Traffic fatalities, a new approach to tolling transponders, and more.

In this issue:

New Report Documents Growth in Private Transportation Finance

Transportation and other revenue-generating infrastructure are routinely financed, built, and operated by the private sector in much of Europe, Australia, and Latin America. But this kind of long-term public-private partnership (P3) is still the exception to the rule for airports, seaports, and toll roads in the United States. A new report from Reason Foundation offers some perspective on this disparity.

Investors’ appetites to invest equity in revenue-generating infrastructure, including transportation, continues to grow. Infrastructure Investor reported that in 2021 investors worldwide put a new high of $136 billion into infrastructure investment funds—an industry that hardly existed 20 years ago. The publication also reported that over the past five years, the world’s 100 largest infrastructure funds raised a total of $791 billion. Investors in infrastructure funds include corporations, insurance companies, public pension funds, and sovereign wealth funds. In recent years, Europe has edged ahead of the United States as the headquarters location of major funds, at 41.5% of the five-year total raised, compared with 39.1% headquartered here in the United States.

The report includes tables showing what kinds of infrastructure these funds are investing in. In 2021, transportation was the largest category by far, at 58%, followed by electric power at 13% and public buildings at 12%. Another table shows that of the 15 largest “greenfield” transportation projects financed in 2021, only one small project was in the United States (Amtrak’s 30th Street Station in Philadelphia, at $527 million); the largest was the North East Link Motorway in Australia, at $8.4 billion. And of the world’s 25 largest transportation infrastructure developers, only one, Fluor Corporation, is based in the United States. Looking at public-private partnership developers of projects in the United States, all but one of the top 15 are European or Australian.

The United States is an outlier because our major transportation infrastructure projects are still largely procured under design-bid-build or design-build procurement. These traditional approaches focus on design and construction, which does not minimize a project’s life-cycle cost (by designing it more durably). They also leave ongoing maintenance in the hands of the state legislature, which is often more interested in funding new ribbon-cutting opportunities than in ensuring proper stewardship of the state’s transportation infrastructure. Design/build/finance/operate/maintain (DBFOM) public-private partnerships (P3s) address those concerns, but the ability to do such projects depends critically on state-enabling legislation. Although the National Conference of State Legislatures reports that two-thirds of states have P3 legislation, the majority of those laws are not state-of-the-art-as evidenced by the lack of any transportation P3 projects in most of those states.

Until recently, even the states with effective public-private partnership legislation and, ideally, a dedicated P3 unit with legal and financial expertise, did P3 projects one at a time. P3 companies and infrastructure funds lamented the lack of a “pipeline of projects” that would make it worthwhile for funds and companies to stay focused on those states and their transportation departments. Both Texas, until recently, and Virginia embraced revenue-financed DMFOM P3s enough to create ongoing interest, but they stood alone in doing so. But as the Reason report notes, the Georgia Department of Transportation has now committed to a pipeline of such projects to build out its planned express toll lanes network in metro Atlanta. Colorado and Louisiana DOTs are moving to second and third projects after successful initial highway P3s. And Maryland DOT—if its initial I-270/I-495/American Legion Bridge project survives ongoing challenges—hopes to go beyond that with express lane P3s for the rest of its I-495 Beltway. And the report notes other potential transportation P3s in Alabama, Indiana, Kentucky, Ohio, Kentucky, Oregon, and Washington.

One factor that might increase support for wider use of long-term revenue-financed transportation P3s is the growing commitment of U.S. public pension systems to infrastructure investment. The report chronicles new and increased allocations from state and local pension systems to infrastructure investment funds. However, public officials in those states, counties, and cities are very likely unaware that nearly all the projects being invested in by the infrastructure funds are in Europe, Asia, and Latin America. If public officials want more pension fund infrastructure investment to support U.S. projects, they should pass workable transportation P3 enabling legislation and encourage their state DOT to make use of revenue-financed P3s.

The Reason Foundation report, “2022 Annual Privatization Report: Transportation Finance,” is available here.

A companion report in this series, dealing with surface transportation, was also released recently. Its author, Baruch Feigenbaum, provides a summary here.

Last month Reason Foundation released our Annual Privatization Report Surface Transportation chapter examining 2021 developments. Unusually, not a single U.S. surface transportation P3 reached a financial close in FY 2021. The lack of projects is surprising because over the last 35 years the U.S. has built a total of 37 highway P3s, and three transit P3s. Of the 37 projects, 26 were financed based on toll revenues, and five others were financed based on availability payments but have state-collected tolls. The international P3 market was more dynamic. There were five projects with a value of $1 billion or more (in U.S. dollars). And Latvia, the Czech Republic, and Cameroon each closed on their first transportation P3.

COVID-19 is probably the biggest factor in last year’s lack of public-private partnership projects in the United States. However, recent changes in surface transportation law—the Infrastructure Investment and Jobs Act (IIJA) may increase the number of P3s. IIJA created a streamlined Transportation Infrastructure Finance and Innovation Act (TIFIA) application process. This process may reduce the time from loan application to loan award by 50%. And the new law also increased the lifetime private activity bond (PAB) cap from $15 billion to $30 billion. Several senators had been trying to raise the cap for years, but budget scoring which treats the loans as grants created some political heartburn. TIFIA and PABs are key components for P3 projects, providing 50% or more of the financing for some projects, increasing the number of projects that are viable as P3s.

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DOT’s Safe Roads and Streets for All Program Ignores Most Traffic Fatalities
By Marc Scribner

In April, the National Highway Traffic Safety Administration (NHTSA) began releasing its preliminary traffic fatality estimates for 2021. Its statistical projections produced a record-setting 42,915 road deaths, a 10.5% increase from the 38,824 traffic fatalities reported in 2020. This startling figure understandably captured a great deal of public attention.

In May, the U.S. Department of Transportation (DOT) announced the opening of the Safe Roads and Streets for All (SS4A) discretionary grant program, which was authorized by last year’s bipartisan Infrastructure Investment and Jobs Act to send $1 billion per year over five years directly to local, regional, and tribal government entities. The program intentionally bypasses state DOTs to focus on improvements to local roads. The problem is that most traffic fatalities occur on roads owned by state DOTs.

One notable project type eligible for SS4A funding is Complete Streets, which have been frequently touted by U.S. DOT during the Biden administration. Similar to the problem with SS4A’s general focus on local streets, the majority of U.S. traffic fatalities occur on road types ill-suited for Complete Streets roadway infrastructure treatments. Further, the few quantitative evaluations of Complete Streets implementations show a mixed record of achieving their ambitious goals. Taken together, it does not appear the SS4A discretionary grants are well-tailored to address the pandemic-era spike in traffic fatalities in the U.S.

To better understand the traffic safety problem, we need to look beyond the aggregate national figures. The table below uses NHTSA’s 2021 preliminary traffic fatality estimates subcategory report to display fatality rates (deaths per 100 million vehicle-miles of travel) and fatality counts and shares broken down by roadway functional classification for 2020 and 2021.

 2020 Fatality Rate2021 Fatality Rate2020 Fatalities (%)2021 Fatalities (%)
Rural Interstate0.800.791,864 (4.8%)2,147 (5.0%)
Urban Interstate0.640.633,151 (8.1%)3,511 (8.2%)
Rural Arterial2.142.027,609 (19.6%)7,899 (18.4%)
Urban Arterial1.391.4414,094 (36.3%)16,197 (37.7%)
Rural Local2.282.117,320 (18.9%)7,424 (17.3%)
Urban Local0.981.064,787 (12.3%)5,736 (13.4%)

As the table shows, rural and urban local roads combined accounted for only 30.7% of traffic fatalities in 2021. While rural local roads had the highest fatality rate among the six roadway classifications, urban local roads had the lowest non-Interstate fatality rates. In contrast, rural and urban arterial roads accounted for 56.1% of fatalities, with rural and urban Interstates—the safest roads by functional classification—accounting for 13.2%.

U.S. DOT’s SS4A discretionary grant program excludes state DOTs from eligibility, so understanding who owns which roads by functional classification is important. The table below was compiled from the Federal Highway Administration’s Highway Statistics 2019Table HM-50.

 State DOT MileageCounty and Municipal Mileage
Rural Interstate28,022 (100%)0 (0%)
Urban Interstate18,077 (100%)0 (0%)
Rural Arterial220,722 (96.1%)8,914 (3.9%)
Urban Arterial93,274 (49.1%)96,752 (50.9%)
Rural Local363,556 (15.0%)2,070,912 (85.0%)
Urban Local61,735 (6.0%)966,041 (94.0%)

We can now estimate that approximately 53% of U.S. traffic fatalities take place on roads that are not eligible for SS4A funding. Excluding more than half of the places where roadway deaths occur from safety improvement funding by definition limits the safety-enhancing potential of the program.

Under SS4A, Complete Streets projects are likely to receive significant funding. Broadly stated, Complete Streets projects aim to de-prioritize motor vehicle travel and add transit, pedestrian, and bicycle enhancements to the roadway in order to meet various safety, environmental, economic, and social policy goals. A Complete Streets planning approach often combines “road diet” reductions in auto travel lanes with dedicated non-automobile infrastructure elements, intelligent transportation systems, and attention to streetscape aesthetics. Where road diets often involve merely re-striping lanes and are thus generally low-cost treatments for road agencies, Complete Streets projects add infrastructure to the roadway, so they are generally more expensive.

Despite being developed by planners associated with Smart Growth America two decades ago and increasingly adopted by U.S. cities, very little quantitative evidence exists to support the claimed benefits of Complete Streets. With road diets, there is evidence to support re-striping low-volume, non-major roads, but not busy high-speed arterials. A recent multiresolution modeling analysis of Complete Streets performed by Florida Atlantic University researchers found that the safety and transit efficiency benefits of Complete Streets may primarily arise from the deployment of intelligent transportation systems (specifically transit signal priority), not roadway geometry changes—which were found to increase the number of traffic safety conflicts per vehicle. Adult bicyclist fatality risk may be modestly improved, but excessively slowing auto speeds on arterials without reducing vehicle-miles of travel can increase air pollution and greenhouse gas emissions. Taken together, the benefits of Complete Streets appear to be highly context-dependent and there are numerous trade-offs.

Rather than prioritizing safety funding based on roadway ownership, a more effective grant program would prioritize funding based on where fatalities and injuries occur, regardless of the roadway owner. Another troubling aspect of SS4A, first highlighted by Eno’s Jeff Davis, is that the program strangely omits the typical mandated project benefit-cost analysis. This will likely further undermine the safety potential of the program.

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Intercity Buses Rebound, But Are Still “the Forgotten Mode”

Few people, even in transportation policy, realize that scheduled intercity bus companies serve five times as many cities and towns as Amtrak (2,639 vs 530 locations in 2019, per the U.S. DOT’s Bureau of Transportation Statistics). And the bus companies do it almost entirely without taxpayer subsidy. With their higher average load factors, intercity bus’s carbon footprint (CO2 emissions per passenger mile) is lower than that of Amtrak’s largely diesel-powered inter-city trains. Back in 2011, the Cato Institute’s Randal O’Toole produced a report titled, “Intercity Buses: The Forgotten Mode.” Alas, more than a decade later that is still the case. For example, in handing out huge federal COVID-19 bailouts to airlines, airports, transit, and Amtrak, Congress gave short shrift to intercity buses, whose ridership plunged just like the other modes.

Between 2006 and 2019, as documented in annual assessments by the Chaddick Institute at DePaul University, the intercity bus market grew by leaps and bounds as new companies such as Megabus, Bolt Bus, FlixBus, Megabus, OurBus, and RedCoach developed “asset-light” business models (not owning costly bus stations and in some cases not owning buses), offering higher-quality services, and using online reservations systems. While taking some market share from legacy operators like Greyhound and Trailways, the new entrants significantly expanded the market for intercity bus travel.

In 2020 the pandemic hit the industry very hard; intercity bus ridership in December 2020 was down 75% from the previous December. Congress responded by providing COVID-19 bailout funds to passenger rail and motorcoach operators: $4.3 billion to Amtrak and $1.5 billion to the motorcoach industry. But that industry includes school buses, tour buses, and airport buses (plus ferry services) in addition to intercity buses. Of all motorcoach operators, only 22% provide intercity services, so they received only a fraction of the nominal $1.5 billion compared with Amtrak’s $4.3 billion, despite intercity bus handling passenger numbers far greater than Amtrak.

But it gets much worse. In the Infrastructure Investment & Jobs Act (IIJA), Congress provided over the next five years $22 billion toward Amtrak’s huge backlog of deferred maintenance and also created a $36 billion program of grants for intercity passenger rail. In other words, these are massive new subsidies to expand Amtrak, enabling it to gain market share from largely self-supporting bus companies. Moreover, as Eno’s Jeff Davis pointed out in a report on Amtrak’s annual budget going forward, the numbers reveal planned annual losses of $1 billion per year, whose only source will be larger annual subsidies from Congress.

The Chaddick Institute’s latest report (Joseph Schwieterman, et al., “Routes to Recovery: 2022 Outlook for the Intercity Bus Industry in the United States”), released in February, offers a ray of hope for the intercity bus industy. Despite several carriers going under in 2021, FlixMobility acquired Greyhound Lines, and new services were offered in various regions such as New England, the Southeast, Texas, the Southwest, and the Pacific Northwest. Based on their long-standing familiarity with the industry, the Chaddick researchers predict that intercity bus traffic will reach 80% of pre-pandemic levels in 2023, while McKinsey & Co. forecast 90% in 2023 and 105% in 2024. New first-class services by Landline, RedCoach, ROX, and The Jet suggest that intercity bus is attracting a higher-end clientele. Chaddick also sees opportunities for Amtrak to contract with motorcoach operators as it expands its Amtrak Thruway bus system.

Nevertheless, given the large role that intercity bus companies play in intercity passenger traffic, it is tragic that Congress lavishes unheard-of billions of taxpayer subsidies on Amtrak so it can compete with a generally self-supporting intercity bus industry that serves five times as many locations and has a considerably smaller carbon footprint. 

Note: Some dated but still useful sources that compare intercity buses to Amtrak are the following:

  • M.J. Bradley & Associates, “Comparison of AMTRAK Trips to Motorcoach Trips,” April 2013. This report compares cities served, passenger volumes, and carbon footprints, but is nearly a decade old. A new version would be very useful.
  • Union of Concerned Scientists, “Getting There Greener: The Guide to Your Lower-Cost Vacation,” UCS Publications, 2008. This report compares the carbon footprint of intercity trips by bus, train, car, SUV, and plane as of 14 years ago, showing that motor coach was always the lowest-carbon option. A newer version is online, from 2019, with the same tables and conclusions but without the actual comparative numbers.

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A New Approach to Tolling Interoperability
By Baruch Feigenbaum

As part of the passage of the 2012 surface transportation reauthorization bill. Moving Ahead for Progress in the 21st Century (MAP-21), Congress included a provision, section 1512b, which required that all toll roads have interoperable electronic tolling by the end of 2015. Flash forward seven years and nationwide interoperability remains an elusive goal.

There has been progress. All toll agencies in four multi-state tolling consortiums are interoperable with each other. Several years ago, I drove from Northern Virginia to Detroit, passing through four E-ZPass states. Unfortunately, those states’ toll roads had different business rules. Maryland and Virginia allowed a customer’s E-ZPass account to dip below zero while Ohio and Pennsylvania did not. On my return trip a gate on the Ohio Turnpike slammed down on my car, and I had to go to a toll booth and pay by credit card, defeating the whole purpose of interoperability.

One barrier to interoperability is that there are six different transponder technologies. Illinois uses TDM, Michigan uses 6C, and Minnesota uses SeGo and TDM. And that is just in the upper Midwest. In some states, different highways or parts of highways accept different transponders. In Florida, for example, the part of the Beachline Expressway connecting Orlando International Airport and Sand Lake Road is operated by the Florida Turnpike Enterprise which accepts E-ZPass. The part between Sand Lake Rd and I-4 is operated by the Central Florida Expressway Authority, which until recently did not accept E-ZPass, which created problems for vacationers from the Northeast and Midwest.

Another barrier is political. Engineers know what changes to implement to allow the different technologies to communicate with a single transponder. Moving forward, will all toll agencies stick with their current transponder or choose a universal transponder? It would be simpler if all toll agencies chose one transponder. But that would also require many of them to change the equipment at each tolling location that communicates with transponders. E-ZPass is the largest regional tolling hub. But it also has the oldest technology, requiring a bulky box instead of a sticker tag. So which transponder technology wins, the one that serves the most customers or the one that is the most technologically advanced?

This confusion is not only bad for customers; it’s bad for toll road operators. For example, the average toll agency fails to collect 5% of toll revenue, mostly for tolls from video (license-plate) tolling, for which they must send out bills. The two biggest problems leading to non-payment are a lack of a vehicle owner’s current address and image rejection. But public confusion also plays a role. And that 5% total can be millions of dollars in lost revenue.

With interoperability remaining elusive, toll agencies continue to develop regional interoperability hubs. A presentation at a recent International Bridge, Tunnel, and Turnpike Association (IBTTA) conference provided an update on the four regional hubs: a 29-member E-ZPass hub, a 12-agency southeast hub, an 8-agency central hub, and a 13-agency western hub. I support anything that brings us to true interoperability, but this seems a confusing and convoluted way to get there. The public sector has been working on this for more than 10 years, so maybe it’s time to let the private sector take the lead.

In fact, drivers of 2019 and newer Audis and 2021 and newer Mercedes Benz E-Class vehicles already have another option—a built-in universal transponder. So do a growing number of long-distance truckers. BestPass, the leading company that provides toll transponders to truck fleets, also processes the transponder toll transactions for automobile drivers through its Payviam program. The transponder is built into the rearview mirror produced by supplier Gentex, so drivers don’t need a windshield sticker tag or box. Instead of setting up an account and pre-paying with a toll agency, drivers prepay with Payviam.

What are the advantages of Gentex rearview mirror technology with Payvium versus a traditional transponder? The most obvious is that a driver can travel in multiple states without the need to worry about interoperability, carry cash, or face surcharges from paying video tolls based on license-plate imaging.

But there are also several less obvious advantages. The window tinting in some newer automobiles makes it challenging for antennas to communicate with transponders. Those drivers need other payment options for toll roads. By including the transponder in the mirror housing, window tinting is no longer a concern.

Some drivers of higher-end luxury vehicles don’t like the aesthetics of a bulky box taped to their front windshield. While this is not a problem that I have experienced, owners of vehicles selling for more than $100,000 feel differently. Many drivers treat their vehicle as their second home. And they don’t like extra clutter on their windshield any more than they like olive green paint in their master bedroom.

Finally, private companies offer value-added services. Flyers can pay for airport parking using Payviam at major airports including John F. Kennedy International Airport, Ft. Lauderdale, LaGuardia, Miami, Newark, and Orlando. And they offer a way to pay for performances at venues such as Hard Rock Stadium. If our New York City traveler tires of driving to Florida she can fly and pay for airport parking using Payviam. And the company is testing other features including in-vehicle diagnostics and advanced mapping features.

While only some vehicle manufacturers build toll modules into their vehicles, the number is expected to grow as tolling increases. For owners of vehicles with the technology, Payvium seems like a better option than waiting for public toll agencies to solve the interoperability problem.

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Battery-Electric or Hydrogen Fuel Cell for Heavy Trucks?

The debate over how best to electrify America’s trucks continues, with advocates of battery-electrics squaring off with partisans of hydrogen fuel cells. The debate even made The Wall Street Journal last fall, with William Boston’s full-page article, “The Coming Battle Over Electric Trucks,” Nov. 10, 2021. Everyone agrees that, as of now, battery electric vehicles (BEVs) are far ahead in trucking, as they are in personal vehicles. But heavy-duty BEV trucks, especially Class 8 big rigs used for long-distance hauls, are severely range-limited (perhaps 200 miles at best) and require several hours to recharge, even at largely non-existent high-voltage, fast-charging stations. On the other hand, while hydrogen fuel cells can apparently provide up to a 500-mile range and can refuel in minutes, there is even less hydrogen fueling infrastructure than EV charging. Not only that, but the conventional method of obtaining hydrogen (electrolysis of water) is very energy-intensive and has a large carbon footprint.

I’ve been following the debate in trucking media this year, starting with Jim Stinson’s scene-setting piece at TransportDive on Jan. 25, “Battery-electric vs. Hydrogen Trucks: The Debate Heads into 2022.” Fleet Owner featured a lengthy article on Feb. 14, “What Fuel Source Will Dominate Trucking in 2030?” It covered a debate sponsored by the North American Council for Freight Efficiency (NACFE), live-streamed on LinkedIn on Feb. 9.

  • Allen Schaeffer of the Diesel Technology Forum argued that today’s dominant engine continues to be improved and there are 140,000 diesel fueling stations nationwide, so diesel will be a key player for many years.
  • Colin Murphy of the University of California-Davis Policy Institute predicted that battery-electric will dominate even the Class 8 fleet in coming decades as the most practical way to reduce trucking’s carbon footprint. He said that hydrogen is only half as energy-conversion-efficient as battery electricity.
  • Craig Scott of Toyota North America countered that the price of hydrogen has fallen over the past decade, there are numerous prototype Class 8 hydrogen fuel cell trucks from major manufacturers on the road in testing, and that range, much lower weight, and quick refueling will make hydrogen the winner.

My own assessment at this point is that battery electric looks likely to be the early winner for small and medium trucks that operate locally, drive 100-200 miles per day, and can recharge overnight at a central yard. That would include municipal and school buses, tow trucks, garbage trucks, and many other such passenger, service, and freight vehicles.

The real contest is for heavy, long-distance trucks where range, weight, refueling time, and infrastructure needs will all be key decision factors. And there is also the question of which alternative is greener. After all, if the driving force for heavy truck electrification is carbon footprint, that will also have to be factored into the decision, whether because of regulatory mandates or company reputation. And regardless of which energy source is technically “more efficient,” that will always matter to engineers, but cost tends to win out in the end.

One of the most comprehensive assessments of electrification trade-offs for Class 8 trucks was released last month by the trucking industry’s American Transportation Research Institute (ATRI). “Understanding the CO2 Impacts of Zero-Emission Trucks,” by Jeffrey Short and Danielle Crownover, is available here.

The study develops a comprehensive quantitative assessment of the life-cycle CO2 emissions of three Class 8 sleeper cab trucks (the kind used for long-haul trucking): internal combustion engine (ICE), battery electric vehicle (BEV), and hydrogen fuel cell electric vehicle (FCEV). The three components analyzed for each are vehicle production, energy production and consumption, and vehicle disposal and recycling. Both costs and CO2 emissions are estimated for each component of each vehicle The analysis begins with the internal combustion truck, for which data are readily available. The researchers needed to make some assumptions about the additional costs of producing a BEV or FCEV truck and the best estimates of the CO2 emissions of each component for each vehicle.

You can read the details in the ATRI report. One of the first tables that caught my eye was the comparison of weights of the three alternatives. While the FCEV tractor is estimated at 21,337 pounds (17% more than the ICE tractor), the BEV totaled a whopping 32,016—76% more than the ICE. And that’s for a BEV’s battery system designed for no more than a 300-mile range. The additional weight of the BEV will reduce its payload capacity, which will reduce its productivity.  

Another interesting table estimates the comparative CO2 emissions of the vehicle propulsion, including its power supply. Here again, the BEV is the big loser, due to the much larger CO2 emissions involved in producing the battery, especially. Another table estimates the energy needed for each truck to operate for one million miles. That figure for each of the three is used to estimate the carbon footprint of (1) producing the energy to be used in operating the truck and (2) emissions from actually operating the truck.

The result of those calculations is that the ICE would emit 3.6 million lbs. of CO2 over its million miles of operation, compared with 2.1 million lbs. for the BEV and 1.9 million lbs. for the FCEV. One more set of calculations estimates the CO2 emissions from end-of-life disposal/recycling of the vehicle. Here again, the BEV is the big loser, at 50.5 thousand pounds compared with 2.8 thousand for FCEV and 2.3 thousand for ICE. It’s that darn battery that’s the culprit.  

Finally, Table 12 pulls together the CO2 emissions from tractor production, energy production and use, and disposal, with ICE at 3.7 million pounds, BEV at 2.6 million pounds, and FCEV at 2.0 million pounds.

Table 14 takes a closer look at payload trade-offs among the three alternatives. Big rigs do not always operate at their maximum allowable gross weight of 80,000 pounds. The average cargo weight, per the data used in the study, was 32,811 pounds. By factoring in the tractor weight (much heavier for the BEV), trailer weight, and average cargo weight and subtracting that from 80,000 pounds, the table shows that the BEV would have less than 4,000 pounds. available for higher-than-average cargo, while the ICE has 18,000 pounds, and the FCEV has 14,600 pounds.  

I’m sure there will be quibbles about aspects of the methodology ATRI used, but this strikes me as an excellent baseline against which investors, climate regulators, and truck owners/operators can start assessing the business case for Class 8 BEVs versus FCEVs. Acquisition cost, range, refueling time, and available energy/refueling infrastructure are also going to be significant factors in the timing of Class 8 truck purchases. This study reinforces my preliminary assessment from a year or two ago that for long-distance Class 8 trucks, hydrogen fuel cells are likely to emerge as the eventual winner.

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News Notes

New Virginia Express Toll Lanes to Open by Year-End
The $3.5 billion P3 project to add 22.5 miles of express toll lanes to I-66 outside the Beltway in Virginia is on schedule to open before the end of 2022. The project has basically rebuilt this entire stretch of congested Interstate, which links exurbs and suburbs to the District of Columbia/Arlington/Alexandria metro area. The project was procured as a design-build-finance-operate-maintain (DBFOM) P3, under a 50-year concession. Unlike most revenue-risk P3s, this project was privately financed without any state government investment. It is the latest in a series of express toll lanes developed by the U.S. division of Cintra, whose other ETL P3s are in Charlotte, Dallas, and Ft. Worth.

Athens Ring Road Attracts Eight Potential Bidders
The Athens ring road toll motorway network was developed in the 1990s under a P3 concession that expires in 2024. Greek privatization agency Hellenic Republic Asset Development Fund has put a renewed concession up for expressions of interest, offering a 25-year concession. Inframation News (May 5, 2022) reported that eight consortia have responded to the EOI, including such major players as Abertis, Brisa, Egis, Macquarie, and Vinci Concessions. Based on a previous Greek toll road concession that was valued at €1.5 billion last year, expectations are that the winning team may bid €2 billion or more. HRADF is expected to announce a shortlist by the end of June.

Puerto Rico to Offer Toll Roads as One P3 Concession
The Puerto Rico Public-Private Partnerships Authority has decided to offer all the island’s toll roads (except for already privately managed PR5 and PR22) as a single P3 concession. This option was assessed as the best way forward in a study conducted for the Authority by KPMG, according to Inframation News. The concession term is expected to be 40 to 50 years, and the winning bidder will be expected to put in at least $500 million in capital improvements for the toll roads. The Highway and Transportation Authority is expected to use the up-front proceeds to reduce its $6.4 billion debt.

Unpacking an Induced Demand Fallacy
You have likely read one or more articles about a freeway improvement that ended up not meaningfully reducing peak-period travel time. The fallacy involved in deeming this a failure is explained cogently in a piece called “Traffic Improvements and Government Waste,” produced by Basically, what is left out is the effect of the improvement on the whole network, which tends to redistribute traffic flows in response to improvements in one part of the network. Check it out here.

Pennsylvania DOT Appeals Bridge P3 Injunction
The Public-Private Transportation Partnership Board of PennDOT suffered a setback to its billion-dollar Major Bridge P3 Initiative when a Commonwealth Court judge issued a preliminary injunction on May 18 to halt the agency from proceeding with the initial stage. The plaintiffs claim the P3 law itself is unconstitutional and, that in any case, PennDOT did not follow proper procedures in identifying nine aging Interstate highway bridges in the state to be repaired or replaced via toll-financed P3s. PennDOT promptly filed an appeal, but this legal problem appears to put on hold the start of work by the winning consortium headed by Macquarie Infrastructure Development.

TET Coalition Launches Another MBUF Truck Pilot Project
The Eastern Transportation (TET) Coalition is embarking on its third mileage-based user fee (MBUF) pilot project involving commercial highway trucking companies. This project will include additional vehicle types, some cross-border (U.S.-Canada) trips, continue work with the Motor Carrier Working Group on commercial vehicle rate-setting based on registered weight, and a “proof of concept” effort with two international organizations—the International Fuel Tax Agreement (IFTA) and the International Registration Plan (IRP), which might play key roles in a multi-state/province commercial truck MBUF system.

INRIX Tracks Downtown Traffic Declines
In a new report, transportation data firm INRIX documents that in 10 of America’s largest cities, all but two have less downtown traffic than prior to the COVID-19 pandemic, in contrast to recovered traffic volumes in their suburbs. The only two downtowns that have recovered are Denver (101%) and Nashville (125%). By contrast, downtown Washington, DC traffic has reached only 70%, Dallas 75%, and New York 88%. “‘Back to Office’ Traffic & Activity Report,” May 2022

Suburbs More Popular than Central Cities Since Pandemic
In the April 30 issue of The Economist, an article illustrates with maps and charts how the pandemic has changed American homebuyers’ preferences. The main data source is Zillow’s monthly home price index, showing home-price growth in the suburbs and declines in central cities. One factor in this change is that younger Americans increasingly look for their first home purchase in suburbs rather than downtown. Political scientist Samuel J. Abrams summarized survey data on this in a blog post for the American Enterprise Institute on May 18, 2022.

EV Charging at Interstate Rest Areas Gains More Support
Politico reported last month that a group of electric vehicle companies sent a letter to the heads of the Departments of Energy and Transportation urging that federal EV charging infrastructure plans must include long-distance heavy-duty electric trucks. The Multi-State ZEV Task Force of NESCAUM (a consortium of Northeastern state governments) in March issued a “Multi-State Medium- and Heavy-Duty Zero-Emission Vehicle Action Plan” that identified the federal ban on commercial activities at Interstate rest areas as a serious barrier to EV charging for heavy trucks. And a survey by Volkswagen of 1,200 of its EV customers found that “over 80% want to have new fast-charging stations located at existing filling stations and rest stops where there are places to eat,” as reported in the June 2022 issue of The Dispatcher. 

New Express Toll Lanes Under Construction
Another link in the emerging network of express toll lanes in the San Francisco Bay Area began construction in May. The $243 million project will implement ETLs along 10 miles of I-80 between Fairfield and Vacaville, converting existing HOV lanes and adding an additional tolled lane each way. In northern Virginia, work has just begun on a northward extension of the ETLs on I-495, to the American Legion Bridge. Also in northern Virginia, the latest southerly extension of the I-95 ETLs has encountered delays due to clay and silt-laden soils along portions of its 10-mile route. The revised completion date is now late 2023.

Satellite Monitoring of Pavement Condition in Texas
Synthetic Aperture Radar (SAR) based on earth-orbiting satellites is now being used to monitor possible ground displacement beneath the pavement on SH 130 between Austin and San Antonio. Doug Wilson, CEO of the SH 130 Concession Company, told Engineering News-Record that the imagery yields maps that show ground-surface displacement in the millimeter range. More than 30,000 points along the toll road are measured every six days and compared with seven years of historical data. (C. J. Schexnayder, “Texas Toll Road Tries Satellite Sensing for Maintenance,, May 16/23, 2022) 

California High-Speed Rail News: Planned Extension but No Money
The California High-Speed Rail Authority approved moving forward with a 90-mile extension, from Merced in the Central Valley to San Jose. At the same time, California legislators are refusing to authorize spending $4.2 billion from the 2008 HSR bond measure amid debates over possible battery-powered trains and about spending some or all of that money improving urban transit in the Los Angeles and San Francisco metro areas instead. One estimate of the cost of the link between Merced and the peninsula is $22 billion, due to the extensive tunneling required.

Louisiana Legislature OKs Down Payment on $2.5 Billion Mississippi River Bridge
The planned Baton Rouge bridge across the Mississippi will get a $300 state contribution toward what is expected to be a largely toll-financed public-private partnership project. Legislators also allocated $200 million for the replacement Calcasieu River Bridge P3, which is already in procurement. State DOT Director Shawn Wilson said the bill “does really good work” in funding needed predevelopment work on these important new bridges.

Is New San Francisco Subway a Boondoggle?
After many years and cost overruns, the 1.7-mile Central Subway in downtown San Francisco is now “nearing completion,” at an estimated cost of $1.6 billion—nearly a billion dollars a mile. Now in the planning process is a 1.3-mile Downtown Rail Extension (DTX) at a cost estimated at between $4.5 and $5 billion—about $3.5 billion per mile. My Reason colleague Marc Joffe wrote a thoughtful assessment of this project that you can find here.

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Quotable Quotes

“Transportation policy is, of course, still a critical area, and the administration and many local governments’ focus on mobility is largely about transit. Outside older ‘streetcar suburbs,’ however, exurbs are almost totally auto dependent. The administration’s transportation secretary, Pete Buttigieg, embraces the idea of getting Americans out of their cars and into trains and buses. For at least half a century, this has been a principal public policy objective—and the results have been spectacularly unsuccessful. Despite the expenditure of more than $2 trillion and the construction of many new rail systems, transit’s share of daily commute trips dropped 44 percent from 1970 to 2019 (from 8.9 percent to 5.0 percent). Even prior to Covid, more people worked at home than took transit, which already accounted for less than two percent of all urban travel.”
—Joel Kotkin, “Exurbia Rising,” American Affairs, Feb. 20, 2022

“Rich countries should accept this new reality and start building transport systems to match. Infrastructure projects that just add capacity to conventional suburb-to-city-center routes now seem pointless, especially in the biggest cities. They are rooted in the idea that urban travel is like an asterisk, or the spokes of a wheel, with people squeezing onto radial roads and railway lines. Travel is now more like a spiderweb. People take fewer, often-shorter journeys along thinner routes; they move to the side, as well as in and out. That explains why buses, which are often used for short journeys, have emptied out less drastically than commuter trains.”
—Leader, “From Asterisks to Spiderwebs,” The Economist, May 21, 2022

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