- Does new highway capacity always “induce” more travel?
- Are metro area roadways too costly to expand?
- New data on automated vehicle safety
- Update on the Key Bridge replacement funding
- Caltrain electrification—not so green
- The problem with discretionary grants
- News Notes
- Quotable Quotes
How Much Does New Highway Capacity “Induce” Demand?
Current California highway policy requires that analysis of proposed highway lane additions be assessed by an “induced vehicle miles of travel (VMT) calculator.” Essentially, the analyst plugs in the location, the facility type, and the number of lane-miles proposed to be added and the calculator generates the annual amount of new VMT generated by the added capacity.
A long, detailed paper by UCLA urban planning professor Michael Manville reports the results of an expert panel that looked into induced-demand modeling. It found consensus that the elasticity found in credible studies is 1.0—i.e., for every 5% increase in lane-miles, there will be a 5% increase in induced VMT.
After many years of reading research reports on induced demand, as well as discussing the subject with many civil engineers and other transportation gurus, I suspect that these models fail to distinguish between new trips that would take place for other reasons and those that are due to the increased highway capacity itself.
I recently watched a video interview of Arizona State University transportation policy analyst Steven Polzin discussing induced demand. His assessment of what happens when highways in urban areas are expanded parallels mine. Here are five reasons for additional travel when a metro-area highway is expanded.
First, some trips shift from local roads to the expanded highway. These are not new trips in the metro area; they have just changed their route. So they have not been “induced” by the added capacity.
Second, some trips shift from other times of day because the highway now appears to be less congested. Again, these temporal shifts are not new trips in that metro area.
Third, if there are new developments (housing, commercial, industrial) in the region, they will likely generate new trips, some of which may be on the expanded highway. But their cause is the new development, not the added highway capacity.
Fourth, we must distinguish between rapidly growing metro areas (e.g., Austin) and low-growth or shrinking metro areas (e.g., Cleveland, Detroit). While capacity expansions are unlikely in the latter, places like Austin desperately need new capacity to cope with the huge population increase of recent decades. Those trips will use the expanded capacity, but they are not “induced” by it—they are already there.
Fifth, some people may shift from carpools or transit in order to get a faster trip on the expanded highway. This would add to total highway trips (and can be considered “induced”), but since carpool and transit use are far lower than 20 years ago, there aren’t that many trips of this kind to shift in most metro areas, so this is a small amount “induced.”
Polzin considers that most actual induced demand comes about in cases where, because of the new capacity, some people change the location of their residence or their job, so they can benefit from having a better job or residence, and they expect that using the new capacity will be better than making a longer trip on surface streets.
Generally ignored in induced demand studies are large changes in highway travel over the past 20 years. VMT per capita peaked in 2005 and has continued to decline due to substitution of communications for travel. Today we have huge amounts of online shopping, mostly online banking, and some degree of real estate and medical transactions taking place online. The major socioeconomic changes of the 1960s and 1970s that greatly expanded the participation of women in the workforce have pretty much topped out, which also helps explain the much slower VMT growth of the past decade.
The metro area roadway network is essential for economic prosperity. Seemingly ignored in induced demand studies is the ongoing growth in all kinds of commercial vehicles: deliveries of online shopping, provision of residential services (yard maintenance, pool maintenance, electricians and plumbers, trash pickup, etc.). Distribution centers in large metro areas are served by heavy trucks, which need to get to and from them (and are often not fully factored into planned highway expansions).
In his online interview, Polzin also reminds us that good urban mobility is virtuous. He cites the ability of emergency vehicles to get where they need to go as quickly and reliably as possible; the ongoing growth of home delivery of online purchases that reduces shopping trips; preserving neighborhoods from cut-through traffic (of which I was guilty when I lived in Los Angeles and had to commute daily via I-405 through the Sepulveda Pass); and especially the urban agglomeration benefits due to people being able to reach a huge number of jobs in a relatively short time. None of that seems to be taken into account by the assumptions built into restricting highway capacity due to concerns over induced demand.
If nearly all the induced demand models find that a five percent increase in lane miles generates a five-percent increase in VMT (which would not otherwise be taking place), then something in the models is wrong, and I suspect it is failing to distinguish between new trips that arise for other reasons from those actually “induced” by added capacity. We need a lot more careful thinking about capacity expansion and its benefits.
P.S.: One modeling expert who disagrees with conventional induced demand analysis is Alex Anas of the State University of New York at Buffalo. His Dec. 2022 paper, “’Downs’s Law’ Under the Lens of Theory: Roads Lower Congestion and Increase Distance Traveled,” takes issue with the much-cited 2011 induced demand paper of Duranton and Turner, but Anas’s modeling is beyond me.
Are Metro Area Roadways Too Costly to Expand?
A new working paper from the National Bureau of Economic Research (NBER) seeks to quantify the amount and value of the land occupied by metro area roadways in the United States. The identical paper, “Urban Roadway in America: The Amount, Extent, and Value,” by Erick Guerra, Gilles Duranton, and Xinyu Ma, was published simultaneously in the Journal of the American Planning Association. The NBER version is Working Paper 32824.
The paper’s focus is roadways in 316 Primary Metropolitan Statistical Areas (PMSAs). Using Landsat data, the study’s authors estimated that roads occupy between 20% and 25% of all PMSA land area, though the amounts vary considerably: very large PMSAs have by far the highest valued land, but suburban areas devote a larger fraction of it to roads.
Most of the paper explains their methodology for obtaining those estimates, but most of the attention will be drawn to the authors’ “back-of-the-envelope cost-benefit analysis of US roadway investment.” That exercise leads them to conclude that “the costs of widening roadways exceed the benefits to drivers and truckers by a factor of three on average, after accounting for the value of land.” And “removing and narrowing roadway, by contrast, may have the potential to generate substantial benefits.”
I have quite a few concerns about this paper and how it will be used by anti-auto/anti-highway groups to oppose needed widenings for safety (protected bike lanes), congestion relief (variably-priced express toll lanes), and simply to accommodate projected high growth in auto and commercial trucking traffic in high-growth PMSAs.
One immediate reaction is that today’s high central city and suburban land values result in part from the access provided by a PMSA’s roadway network. Without the anywhere-to-anywhere access provided by such networks, we would not have massive empirical evidence that, on average, U.S. commuters can reach 22 times as many job locations in 40 minutes via personal vehicle than via transit. That, in turn, leads to today’s significant urban agglomeration benefits, which result from many more high-value transactions between employers and employees across the entire PMSA landscape. Similar findings are found in European metro areas, as I reported in the Aug. 2024 issue of this newsletter.
The paper acknowledges different magnitudes for the effects in three sets of urban land: the urban core, the main city, and the overall Primary Metropolitan Statistical Area. It would be more enlightening if the third category were suburbia, which is not separately reported. I noted this when the authors reported that their street values per capita range from $20,000 to $275,000.
Overall, they estimate that roadway land in all 316 Primary Metropolitan Statistical Areas is now worth $4.1 trillion. When they break this down by the three components (PMSA overall, city, and core), the standard deviations are huge, especially for road value per hectare, as much as 4.6 times the average value for core cities. This means that their eventual back-of-the-envelope cost/benefit analysis for roadway expansion would vary enormously from one PMSA to another, but the paper only provides one calculation and generalizes that roadway expansion anywhere has costs greater than benefits.
Their cost/benefit analysis assumes a very modest reduction in congestion from roadway widening, evidently assuming that added lanes are general-purpose lanes rather than variably priced express toll lanes (ETLs). As we have learned, express toll lanes offer faster and more reliable trips during peak periods for express bus service as well as for personal-vehicle commuters.
Also not considered is the use of elevated or tunneled lane additions, such as Tampa’s elevated express lanes on the Selmon Expressway and Dallas’s below-grade express toll lanes on the LBJ Freeway. Those alternatives cost a lot to build, but if land for widening is as costly as the authors suggest, toll-financed below-grade and above-grade additions are important alternatives.
Overall, this is an ambitious paper, but with a number of shortcomings. Unfortunately, it will likely be used by anti-highway advocates as yet another reason to kill proposed highway expansions.
Automated Vehicle Safety Evidence Grows, But Regulators Need to Catch Up
By Marc Scribner
Automated vehicle (AV) developers have long emphasized the potential safety benefits of eliminating the driver error and misbehavior responsible for the vast majority of crashes. Given the novelty of the technology, demonstrating these safety benefits in early deployments remains a challenge. One leading AV developer, Waymo (formerly the Google Self-Driving Car Project), has been producing increasingly credible evidence to support its safety claims. From now on, more AV developers should adopt a Waymo-like approach to demonstrating safety. Policymakers should also take note, as current AV data-reporting mandates leave much to be desired.
Traditional safety analysis often relies on statistical analysis of historical crash data. Since AVs are brand-new and not widely deployed, these traditional tools are of little use. The general challenge was surveyed in a 2020 RAND Corporation report, which I discussed in the Dec. 2020 issue of this newsletter. To bolster their safety cases, AV developers have been working to develop alternative but still-credible methodologies.
In this endeavor, Waymo is undeniably the leader, regularly publishing its safety analyses on its website and in peer-reviewed journals. In the second half of 2023, for instance, Waymo released three studies making use of insurance and police-report data that found a 57% reduction in the police-reported crash rate, a 76% reduction in property damage claim frequencies, and an 85% reduction in the “any injury reported” crash rate. These analyses were discussed in the Jan. 2024 issue of this newsletter.
Waymo’s safety studies from last year covered at most 7.14 million miles driven through Oct. 2023 in Los Angeles, Phoenix, and San Francisco. Since then, Waymo has been ramping up its robotaxi service in the few markets it serves, going from 50,000 paid rides per week in May 2024 to more than 100,000 per week in September. The company has announced plans to expand commercially into at least two new markets in 2025, Atlanta and Austin.
In September, Waymo also released new data and a safety analysis of 22.2 million driverless miles through June 2024. This total is composed of 15.399 million miles in Phoenix, 5.931 million miles in San Francisco, 855,000 miles in Los Angeles, and 14,000 miles in Austin. In selecting crashes for analysis, Waymo adhered to requirements of the National Highway Traffic Safety Administration’s Standing General Order on AV crash reporting, which amounted to 192 crashes—or a crash every 115,620 miles.
Of those 192 crashes, 82 (42.7%) were crashes involving changes in velocity of less than 1 mph, indicating very minor low-speed collisions. When these types of crashes occur with human drivers, many go unreported. To make more accurate comparisons to human drivers, Waymo has developed a human driver benchmark that adjusts for underreporting, as well as Waymo’s different vehicle characteristics and driving conditions. When compared to Waymo’s human driving benchmark, the company estimated its vehicles produced 48% fewer police-reported crashes, 73% fewer injury-causing crashes, and 84% fewer crashes where airbags deployed.
Technology journalist Tim Lee, who publishes the excellent Understanding AI newsletter, did a deep dive into Waymo’s latest safety data. Lee examined the 25 most severe crashes that either caused an injury, caused an airbag to deploy, or both. He found:
- 17 crashes involved another car rear-ending the Waymo vehicle;
- 3 crashes involved another vehicle running a red light prior to colliding with a Waymo vehicle;
- 2 crashes involved a Waymo vehicle getting sideswiped by another vehicle in an adjacent lane;
- 2 crashes involved another vehicle making a left turn into the path of a Waymo vehicle; and
- 1 crash involved a Waymo making an unprotected left turn that was struck by another vehicle that was traveling in a bicycle lane.
Based on the crash report narratives for these 25 most severe crashes, Lee believes “that a non-Waymo vehicle bore primary responsibility for most, and possibly all, of these crashes.”
In his review of Waymo’s public dataset, Lee discovered a few minor errors. First, three crashes that the company had reported to federal regulators had not been included in its initial release, which Waymo staff quickly corrected after Lee notified them. Second, four crashes had their injury status categorized as “unknown” while the crash report narratives indicated injuries were present. Waymo told Lee it is looking into these apparent discrepancies.
Lee believes these errors “were honest mistakes rather than deliberate efforts to cover up crashes,” leading him to conclude, “I find Waymo’s data to be fairly credible, and those data show that Waymo’s vehicles crash far less often than human drivers on public roads.”
Waymo has set a high bar for safety case credibility, and other AV developers should follow its lead. Debacles like the one that occurred with GM subsidiary Cruise in San Francisco last October threaten to undermine public confidence in this nascent industry. With Cruise entering a two-year consent order with federal regulators on Sept. 30, the AV industry would be wise to be as transparent as they can be about safety.
But regulators have responsibilities too, and one under-discussed facet of regulatory oversight is the quality of the safety data reporting requirements that regulators impose on the AV industry. California was the first state to require standardized safety data reporting, most notably for “disengagements” of the automated driving system. I coauthored comments to the California Department of Motor Vehicles (DMW) in 2017 warning that crude disengagement reporting would discourage AV developers from testing in more complex settings and thereby undermine the validity of this supposed safety metric. The California DMV is currently in the process of revising its AV regulations, including data reporting requirements, and Gov. Gavin Newsom just vetoed a bill that would have reduced the integrity of AV data reporting in the state.
A central goal of the California DMV’s AV data reporting requirement revision is better conformity with the National Highway Traffic Safety Administration’s (NHTSA) Standing General Order (SGO) requirements. While better alignment across jurisdictions makes sense, the underlying problem is that the SGO requires the reporting of trivial events that have no bearing on AV safety. These include incidents of electric scooter riders lightly impacting AVs and then continuing on their way as if nothing had happened—or my favorite, when an apparent drunken fight broke out in the driveway of a Las Vegas hotel, and the two belligerents stumbled into a Zoox taxi moving at 2 mph before they fled the scene.
Due to poorly defined reporting parameters, the SGO incident database is littered with junk data of little use to safety researchers. This signal-to-noise problem will only worsen as AV deployments scale and reportable events inevitably increase. In July, NHTSA announced it was moving forward with a rulemaking project to codify AV incident reporting requirements. This gives the agency an opportunity to consider the views of outside experts—something NHTSA failed to do when it abruptly issued the SGO without public input. In particular, NHTSA should examine the cutting-edge safety analysis conducted by Waymo and other AV developers to ensure any reporting requirements are actually useful for advancing safety.
Update on Key Bridge Replacement Funding
Despite heavy lobbying of Congress, Maryland officials failed to obtain legislation to guarantee federal funding for 100% of the cost of replacing the Francis Scott Key bridge prior to Congress going on recess in the run-up to Election Day. Meanwhile, there is initial progress for replacing the bridge, which collapsed after a container ship hit it in March, and news about recovering damages from the shipping industry’s insurance policies.
First, the Maryland Transportation Authority (MDTA) signed an initial $73 million contract with Kiewit Infrastructure Company as the first step toward a progressive design-build contract, which Kiewit priced at $1.3 billion for the construction project.
Second, also in August, MDTA received its first insurance payout regarding the bridge collision: $350 million from Chubb under its “property and business interruption policy” on the bridge.
Many other financial transactions will be played out over the next year or two. On Sept. 24, the State of Maryland sued the ship’s Singapore-based owner and operator, Grace Ocean Private Ltd. and Synergy Marine Group, for having knowingly sent an unseaworthy ship into U.S. waters. Grace Ocean and Synergy Marine filed a court petition only days after the collision seeking to limit their liability for the collision. The State of Maryland, the City of Baltimore, the International Longshoremen’s Association, and several others filed opposing claims, which were consolidated into one liability case near the end of September. Also, under maritime law, shippers of cargo on a ship involved in a disaster share in the ship line’s liability, and shippers on the Dali must pay $20,000 per 40-ft. container. With about 5,000 containers on board, that totals $100 million. Not yet heard from, as far as I know, are any of the shipping industry insurance pools, such as the London-based Brittania P&I Club. The Wall Street Journal reported that up to $3.1 billion is available per shipping disaster from these pools.
It appears that insurance proceeds could be ample to cover the $1.3 billion cost of the replacement bridge. This suggests that if Congress provides up-front money for the construction project (whether 90% or 100%), it should be in the form of a loan, not a grant. There’s no good reason for federal taxpayers to be on the hook for this.
Caltrain Electrification is Less Green than Expected
Last month, the oldest commuter rail line in the western United States, Caltrain on the San Francisco peninsula, ditched its old diesel locomotives for new electric locos, using Caltrain’s new overhead electric lines. The cost of the locomotives and electrification was $2.5 billion. For most of the 20th century, this line was operated by Southern Pacific Railroad, using steam locomotives retired from long-distance service to haul the commuter trains until 1957, when they were replaced with diesels. Growing losses led Caltrans, the state’s transportation department (DOT), to take over the funding in 1980. It bought the right of way from SP in 1991, and the next year it hired Amtrak to operate the line, ending SP’s involvement.
The electrification of Caltrain this year has been hailed as a major step toward cleaner air and reduced CO2 emissions. But technology expert Brad Templeton recently took a closer look. Caltrain notes proudly that electrification will reduce greenhouse gas emissions by 250,000 metric tonnes per year, as well as being quieter, faster, and more frequent.
Templeton’s first surprising point is that the old diesel Caltrain “was using many times more fuel than its passengers would have burned if they each drove a one-person SUV.” Oh-oh! As he explains, the numbers show that the diesel trains were using about 25 million gallons of diesel fuel per year, which equated to 3.5 gallons of diesel (equivalent to 4 gallons of gasoline) per boarding. A 30-mile round trip in a car with an average of 1.5 occupants would use 2 gallons of gas per person. If a diesel Caltrain were a car, “it would be classed as one of the heaviest polluters per passenger.”
But doesn’t electrification fix all that? Unfortunately, Caltrains don’t run full, even peak-time/ peak-direction. And they run all day, rather than operating inbound in the morning and outbound in the afternoon, as many commuter trains do. Thus, “the theoretical efficiency of the [electric Caltrain] is good, but moving empty seats isn’t of value.” Yes, the new Caltrain will pollute much less than the old one, but “it’s likely it will use several times as much energy per passenger mile as the average electric car.”
Looking to the near future, Templeton notes the availability of driverless commuter trains, with vehicles sized to actual demand at various times of day. But he also notes the paradox of shared transport. “When people share a vehicle, each makes some compromise from their ideal door-to-door route and time. The more people in the vehicle, the more efficient but also the more compromise…In the U.S., the most efficient transit is the vanpool, because vanpools tend to have higher load factor.”
The Problems with Discretionary Grants
By Baruch Feigenbaum
For 60 years, federal surface transportation funding was funded almost entirely by formulas. These formulas were created by leadership on the Transportation and Appropriations committees in the House and Senate with input from majority and minority party leaders. The process was somewhat political in nature as bill authors received more funding than other members. Many hoped the federal discretionary grant programs, which have exploded over the last 20 years, would be less political. But that has not been the case.
I’ve written previously about problems with major discretionary grant programs: Transportation Investment Generating Economic Recovery (TIGER), Better Utilizing Investments to Leverage Development (BUILD), and Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants.
This time, I want to examine the 101 discretionary grant programs in the IIJA. While these grants are intended to complement formula funds, with $150 billion of grant funding available, many projects can be funded without formula funding.
To determine if the grants meet the key goals of being nationally-oriented, solving transportation problems, and being cost-effective, I selected one project in 11 of the 101 programs. Projects were selected at random and stratified using an Excel spreadsheet to ensure that they were representative of all projects. For example, I did not just choose roadway projects but transit and complete streets projects as well. (For this exercise I did not choose aviation, freight, and port projects). I used the most recent round of grantee awards, often 2024 but sometimes 2023 or 2022:
Let’s examine these 11 projects.
- The Appalachian Regional Initiative for Stronger Economies (ARISE) program provided $9 million to the Boone’s Ride and Cumberland Trails Conference Improvements, for trails and a wastewater treatment plan in eastern Kentucky and Tennessee. This is a local project that lacks a transportation component.
- The Bridge Investment Program provided $73 million to Bay City, MI, to replace an aging, functionally obsolete bridge. This bridge is federal in focus, transportation-related, and cost-effective.
- The Delta Workforce Grant Program provided $447,000 to the Memphis Chamber Foundation to build a STEM-focus pipeline for manufacturing jobs in Memphis. This project is neither transportation- nor federally-focused.
- The Federal State Partnership for Intercity Passenger Rail awarded $1.1 billion to upgrade a stretch of track between Raleigh and Wake Forest, NC, approximately 18 miles long. This stretch is federally-focused and transportation-related, but a poor use of funding. Assuming equivalent cost, more than $10 billion would be required to upgrade the 175 miles of track for limited ridership.
- The Low or No Emissions Grant Program awarded $4.6 million to the Roaring Fork Transportation Authority in Aspen, CO, to establish a fleet of electric buses. Electric buses’ battery life is shortened significantly in both the extreme heat and the extreme cold, making them unusable in some parts of the country. A ski resort with an average January temperature of 22 degrees would seem to be one of those places. In addition to not being federal in nature, the project seems a bad use of funding.
- The National Infrastructure Project Assistance (Mega) Program funds projects that are too large or complex for traditional funding projects. The $150 million for the Cross Bronx Expressway Multimodal Corridor would provide a car lane, a bus lane, and a bicycle lane on a new arterial roadway paralleling the Cross Bronx Expressway. The program is transportation related, but it is not federal nor is it cost effective.
- The National Scenic Byways program awarded $714,000 to the Iowa Department of Transportation to install 51 kiosks at key entry points on the state’s scenic byways. The kiosks provide maps, intrinsic information, and on the importance of the byways. The project is not federal and may not be transportation-related.
- The Northern Border Regional Commission is a program to improve rural economic vitality in Maine, New Hampshire, New York, and Vermont. Lyons, NY, received $3 million for road, water, and sewer infrastructure improvements. Of the 37 projects funded in this economic development program partly funded by transportation revenue, this is the only one that was transportation-related, and the project is not federal in nature.
- The Public Transit on Indian Reservations program awarded the Village of Unalakleet in Alaska $1.4 million in funding to acquire equipment to maintain transit corridors in the winter. Again, this project is not federal in nature.
- The RAISE program awarded funding to the Cedar Lake Road Realignment in Lake County, IL, to construct a new alignment for Cedar Lake Rd including bicycle paths, pedestrian crossings, and improvements to the local commuter rail station. The roadway project is not federal in nature.
- The Thriving Communities program allows disadvantaged and under-resourced communities to improve their transportation systems. USDOT gave an undetermined amount of money (the grant totals were not listed on DOTs website) to build a Complete Streets network in Baltimore, which is not federal in nature and may not be cost-effective.
Of the 11 projects that I analyzed, only one met all three criteria (federal in focus, transportation-related, good use of funding).
The biggest problem is that discretionary funding has gone from federally-focused and transportation-related to locally-focused and often tangentially related to transportation. For example, Congress created the Appalachian Regional Commission to develop the Appalachian Region. Some local leaders saw the program as a way to get ‘free money’ for their districts. As other regions saw the benefit of this entity, Congress created the Delta Regional Authority in the south and the Northern Border Regional Commission in the northeast.
Another problem is that almost every specialized interest group seems to have a program. Do Indian reservations need a separate transit funding program? Does Complete Streets need a dedicated program? Even if these projects were a core federal transportation funding need, they could be (and often are) funded in a formula program.
For the next surface transportation reauthorization Congress should sharply reduce or eliminate transportation discretionary programs. While the idea of a merit-based selection process seems better than formula grants, the actual results have been far worse.
Oregon Releases I-5 Bridge EIS
The Oregon Department of Transportation released the draft supplemental Environmental Impact Statement (EIS) for the I-5 bridge replacement project between Portland, OR, and Vancouver, WA. The next step is a 60-day public comment period for the project, estimated to cost between $5 billion and $7.5 billion. The EIS estimated large peak-period reductions in congestion in both directions. It also estimated potential property takes that could displace up to 47 residents and 36 businesses. The replacement bridge will be tolled, which will reduce the amount of federal and state transportation funding needed.
New York Congestion Pricing Might Still Go Forward
Lawsuits that challenge New York Gov. Kathy Hochul’s cancellation of the plan to implement congestion pricing in Manhattan were upheld in late September by state Supreme Court judge Arthur Engoron, the New York Times reported on Sept. 27. The program was scheduled to go live on June 30, but Gov. Hochul cancelled it at the last minute. The two lawsuits were filed by transit advocacy group Riders Alliance and by the City Club, a civic organization.
Tampa’s Replacement Bridge Nearing Completion
Last month, Florida DOT held an open house for reporters on the nearly finished Howard Frankland Bridge replacement. Construction work should be wrapped up by year-end, and it should be open to traffic in spring 2025. The bridge will include two express toll lanes in each direction, enabling faster and more reliable trips during peak periods for motorists and express bus commuters alike.
Greece Privatizes Athens Toll Road
Reuters reported that the Greek government has signed a $3.64 billion public-private partnership (P3) lease of the 44-mile Attica Motorway. The long-term P3 lease went to winning bidder GEK Terna. The concession will run for 25 years. Under a revenue-sharing plan, the government will receive 7.5% of gross toll revenue in addition to the up-front lease payment. Greece uses the proceeds from P3 leases and asset sales to reduce its national debt.
Partial Opening of Expanded Houston Ship Channel Bridge
To accommodate rapid growth in truck and other traffic, the Harris County Toll Road Authority (HCTRA) has been expanding the Ship Channel Bridge from two lanes each way to four lanes. Near the end of September, HCTRA announced the reopening of the southbound lanes, in their expanded condition. The cost of the expansion, $1.3 billion, is being financed via toll revenues generated by the bridge.
Investors Refinancing Texas SH 130 Concession
Infralogic (Sept. 20) reported that the primary owner of the long-term P3 concession of this north-south highway between Austin and San Antonio is refinancing the 41-mile toll road. Strategic Value Partners (SVP) acquired the project out of bankruptcy, along with several partners. SVP’s fund that invested in SH 130 is due to expire soon, so it is seeking new investors in the concession, which has 38 years remaining. The new investments will also add a non-tolled connection to I-35 at the southern end and a truck parking facility. Toll revenue has doubled from 2019 to 2023, thanks to both a toll rate increase and a 60% increase in traffic.
Argentina Planning Highway Privatizations
As reported by Infralogic, Argentina plans to auction off state-owned highway operator Correadores Viales, which manages 6,000 km of roads across 13 provinces. A separate auction will be held for each highway, with private companies and provincial governments eligible to participate. Separately, a three-company consortium has submitted a proposal to the Economics Ministry to operate 618 km of routes 12 and 14 between the cities of Zarate and Paso de las Libres. They propose investing over $650 million and also devoting $300 million to the operation and maintenance of the two highways.
Alabama Bridge Gets Federal Grant
The long-planned project to build the new Mobile River Bridge and modernize the nearby Bayway received $550 million from the federal Bridge Investment Program, at long last completing a financing process that has dragged on for years. Originally planned as a toll-revenue-financed P3 project, it stalled over local transportation planning organizations’ opposition to what they saw as too-high tolls. Alabama DOT revived the project in 2022 as a non-P3 with a pledge to keep the tolls at no more than $2.50 one-way for passenger vehicles. The federal grant will complete the funding plan for what is now expected to cost over $3 billion, reports Public Works Financing (Aug. 2024).
India Plans $12 Billion for Tunnel Construction
World Highways reported that the Ministry of Road Transport & Highways plans 74 new highway tunnels totaling 273 km and costing an estimated $12.2 billion. India has a long history of using various forms of long-term P3 projects for transportation infrastructure. For the tunnel projects, the Ministry says that non-Indian firms may hold up to 51% of joint-venture projects to develop and operate new highway tunnels. Thus far, India has implemented 35 new highway tunnels totaling 49 kilometers.
Argentina Plans Railroad Privatizations
The reformist government plans to privatize government-owned long-distance railroads and metro area commuter trains, according to Infralogic (Sept. 6). There are several government-owned railroads, as well as the Buenos Aires metro system operated by state-owned Trenes Argentinos Operaciones. Transport Minister Franco Mogetta says bidding documents will be ready by January.
Eurostar Competitors for Cross-Channel Passenger Rail
Infralogic reported (Aug. 23) that Spanish company Evolyn is working with Santander to finance the start-up of competing service from London to major cities in Europe. The company is negotiating with passenger rail manufacturer Alstom for up to 12 trains for this service. Virgin Group, headed by Richard Branson, has also launched a process to find investors for a cross-channel venture of its own. The Channel Tunnel is operating at only 45% of its capacity.
Transurban Using AI to Improve Toll Collection
Transurban, which operates toll roads in Australia and express toll lanes in northern Virginia, is now using artificial intelligence to identify vehicle license plate numbers that automatic license plate cameras have difficulty reading. At a conference in Australia, the company’s head of data reported that the AI-based auto-correction model has reduced the number of images sent for human review by up to 40%.
Megabus Files for Bankruptcy
After many years as one of the largest and most successful over-the-road bus companies, Megabus recently filed for bankruptcy, reported Business Insider (Sept. 11). The COVID-19 pandemic took a heavy toll on the bus industry, as ridership plummeted. Federal aid was provided to airlines and Amtrak but not to intercity bus companies, which were equally impacted, noted Fred Ferguson, CEO of the American Bus Association.
2024 Toll Excellence Awards from IBTTA
On Sept. 9, the International Bridge, Tunnel, and Turnpike Association (IBTTA) announced its annual toll excellence award winners. The Orange County Transportation Authority won the Administration & Finance Award for its huge I-405 express lanes project. The Illinois Tollway won in the Customer Service category for its I-Pass Assist program. Indra USA won the Private Sector Innovation award for its advanced tolling technology on the I-66 Outside the Beltway express toll lanes. Other winners included the Colorado Transportation Investment Office for its Wireless Autonomous Lane Enforcer, the Windsor-Detroit Bridge Authority for its community engagement on the Gordie Howe International Bridge, and the North Carolina DOT for its new toll processing back-office technology.
Rising Toll of Lithium Battery Fires
First, it was the occasional electric vehicle (EV) catching fire and becoming a total loss. Then, electric bikes stored in apartments in New York and other cities became a source of building fires. More recently, a Tesla semi-truck crashed into trees alongside I-80 in California, igniting a battery fire that led to the Interstate being closed for 15 hours. Another crash and fire involved a truckload of lithium batteries on I-15 near Baker, CA, which closed that freeway for 44 hours. Beyond EV fires, on May 15, a Gateway Energy Storage facility near San Diego caught fire and ended up burning for 11 days. These examples are from Steve Goreham’s Wall Street Journal commentary, “If Green Energy Is the Future, Bring a Fire Extinguisher.” He is the author of Green Breakdown: The Coming Renewable Energy Failure. (Note: I have not read this book.)
Good Reading from a Noted Economist
Tyler Cowen of George Mason University posted a very interesting piece on his Marginal Revolution blog, “Mobility vs. Density in American History.”
“The reality is that increased costs have eroded that buying power. What I say is it has kept our head at water level. On some projects, we have gone below water and on some projects we come up for a breath of air. In fact, our data looking back to the end of calendar year 2020 into October 2023, we’ve seen asphalt resurfacing projects in Georgia increase by 80%. Bridge costs during that same time—just for the bridge, not ancillary items like roadway approaches—have increased by 61% per square foot.”
—Russell McMurry, Commissioner, Georgia Department of Transportation, in “How the Infrastructure Law Helps GDOT Keep Pace with a Booming Economy,” ARTBA Transportation Builder, July-Aug. 2024
“Clearly lit signs with the word HYBRID are everywhere. According to Cox Automotive, sales of conventional hybrids were up 100% in the second quarter of 2024, compared with the same quarter a year earlier. Sales of plug-in hybrids rose 59% during the same period. Together, they made up 11% of total light vehicle sales, which is a record high. GM has revised down its BEV goal on the 11th of June from 300,000 to 200,000-250,000 and delayed the start of its electric pickup truck until 2025. Ford postponed a new electric pickup and a three-row BEV SUV, and VW has put on hold its ID7 BEV launch in the U.S, and Canada.”
—Michael L. Sena, “BEV Owner Survey Results,” The Dispatcher, Sept. 2024
“Touchscreens could be enhanced by the use of head-up displays (HUDs). As more and more controls move from physical switches to cheaper touchscreens, concerns are growing that fiddling around with screen icons and sub-menus can be dangerously distracting. The addition of voice-activated controls can help keep a driver’s eyes on the road, although spoken commands can be misunderstood, which often results in drivers looking at a touchscreen to find out why. That can be avoided if a spoken request is confirmed with a HUD message.”
—“My Other Car Is a Hologram,” The Economist, July 27, 2024