In this issue:
- Boondoggles or needed congestion relievers?
- What’s happening to transit bus ridership?
- Will the FAST Act revitalize Interstate reconstruction?
- Intercity buses reach new highs
- Truck platooning interest grows
- Tolled grade separations in Texas
- Upcoming Transportation Events
- News Notes
- Quotable Quotes
Are Congestion-Relief Mega-Projects “Boondoggles”?
From 1982 to 2014 the annual direct cost of traffic congestion in America’s metro areas increased from $42 billion to $160 billion (both measured in 2014 dollars). A major reason for this was that states and metro areas cut way back on adding capacity to their urban expressways and major arterials during the 1990s and 2000s, while both population and the economy kept growing. Fortunately, that near-moratorium on capacity expansion has been reversed to some extent over the past decade or so, in no small part thanks to growing use of variable tolling (to manage traffic flow and to generate revenues) and long-term public-private partnership (P3) procurement of mega-projects such as adding express toll lanes to congested expressways.
This change is anathema to anti-highway groups like the Public Interest Research Group (PIRG), which every few years puts out another report arguing that highways are old-fashioned and that as much highway funding as possible should be diverted to expanding transit and providing more infrastructure for walking and bicycling. PIRG’s newest report, released last month, is “Highway Boondoggles 2: More Wasted Money and America’s Transportation Future.” It singles out 12 projects and argues that each is a foolish boondoggle that is a poor use of limited transportation resources.
PIRG’s overall rationale is laid out in the executive summary. It rests on four assertions, of varying degrees of validity, as follows:
1.”State governments continue to spend billions on highway expansion projects that fail to solve congestion.”
No one claims that a single project will “solve” (eliminate?) congestion. And in a fast-growing metro area like Houston, just keeping congestion from getting worse by adding capacity counts as progress. But what PIRG ignores is the powerful congestion-reduction being produced by variable pricing, which is part of a number of the projects it terms “boondoggles.”
2.”Americans’ long-term travel needs are changing.”
Here PIRG cites obsolete mid-recession 2009 data purporting to show that Millennials are turned off by cars and driving, so funding should be reallocated to transit, biking, and walking. We now know that Millennials are buying cars at a rapid clip and moving to the suburbs as they start families. Ironically, elsewhere in the report PIRG faults state DOTs for not using current data in their planning.
3.”FHWA and many state DOTs are increasingly dependent on the failing gas tax and infusions of general fund spending.”
That’s true, but here again PIRG seems oblivious to the growing use of pricing and tolling to add important funding resources to the picture.
4.”States continue to spend tens of billions of dollars on new or expanded highways that are often not justified in terms of their benefits.”
That is true of some projects in some states; benefit/cost analyses are used far less than they should be. That is one of the virtues of toll-financed P3 projects: you cannot sell the bonds unless you can demonstrate that enough demand can be realistically projected for the project.
I’m familiar with six of PIRG’s dirty dozen, and see all six as worthwhile projects.
- Two of them are projects to reconstruct and widen aging Interstates: I-95 across Connecticut and I-70East in Denver. The former will very likely be toll-financed, since it’s highly unlikely that Connecticut can come up with the projected $11.2 billion otherwise. The $1.2 billion Denver project will eliminate a very congested bottleneck and will add express toll lanes in this corridor between downtown and the Denver International Airport.
- Two others are missing links in existing urban expressway networks: the I-710 deep-bore tunnel beneath (rather than through) South Pasadena, CA and a missing link of the SH 45 ring road in rapidly growing Austin. The 710 tunnel has been designated as the region’s most needed highway investment, and will likely be developed as a toll-financed P3 project. The much smaller Austin project will be a locally financed toll road, like the other segments of SH 45. Both these projects will significantly improve circulation in their respective metro areas.
- The final two projects will add express toll lanes to congested freeways: I-4, I-75 and I-275 in Tampa, FL and I-77 in Charlotte. Readers of this newsletter need no reminders of the large, sustainable benefits that express toll lanes bring to congestion-plagued freeway systems. Both of these projects are initial stages in a planned urban-region network of express toll lanes.
In trashing these projects, the PIRG report repeatedly claims they will not “solve” congestion, or that they will “increase traffic.” I already addressed the first; as for the second, why would you add capacity to an electric utility, a cell-phone provider, or a school system if there was not increasing demand for its services? It’s the same with highways; that’s the job of a state DOT: to meet the demand for highways.
PIRG also lambastes new-capacity projects for “increasing pollution.” That assertion counts on the reader being ignorant of two facts: (1) that substituting steady flow on priced lanes reduces tailpipe emissions compared to cars operating in stop-and-go conditions on arterials or clogged general-purpose lanes, and (2) that vehicle emissions are on a steady downtrend, thanks to federal CAFE standards that will require 54.5 average mpg of new cars by 2025, just nine years away.
Alas, gullible reporters gave the PIRG report unearned credibility. For example, the credulous Washington Times headlined its story, “Government Allocates Billions for Questionable New Highways,” and provided its readers with little or no factual context. PIRG’s local affiliates succeeded in getting free media publicity in California (I-710), Connecticut (I-95), Florida (Tampa ETLs), and North Carolina (I-77 ETLs), for stories that basically repeated the factually challenged PIRG critique.
What’s Happening to Transit Bus Ridership?
Daniel Kay Hertz of the University of Chicago had a thought-provoking piece about declining transit bus ridership on NewGeorgraphy.com January 5th (picked up from CityObservatory). Hertz noted that since the Great Recession there has been a decline in both transit bus ridership and transit bus service (vehicle revenue miles), and set out to assess what is going on. He found a study by the Mineta Institute at San Jose State University that concluded that after taking account of an array of possible causal factors, bus service levels are the best predictor of bus ridership. He also found evidence that it is not reductions in ridership that lead to cuts in service, but rather the opposite.
Probing deeper, Hertz found evidence that the decline in bus service is directly related to the opening of new rail service, mostly new light rail lines. Bus routes are typically revamped to provide feeder service to rail lines, which disrupts their ability to operate as a grid that enables transit riders to get from a point A to a point B, often via a transfer. In addition, Hertz finds that “since the recession, transit agencies have cut bus service year after year, while returning service to rail rather quickly.”
Why this preference for rail over bus by transit planners? Here is the key point, in his words:
“Even though far more people take buses than trains in nearly every metropolitan area in the country, train riders, on average, tend to be wealthier and whiter. Not only that, many civic and business leaders who don’t use transit at all are heavily invested in rail service as an economic development tool for central city neighborhoods. In other words, rail tends to have a more politically powerful constituency behind it than buses.”
Hertz also points out another key distinction between bus and rail in real-world America. Nearly all rail lines are radial services from suburbs to the traditional downtown. Yet since “downtown” represents a small and declining fraction of metro area jobs, getting from one suburb or neighborhood to another without a personal vehicle requires a grid-type bus system. As Hertz notes toward the end of his piece,
“Because of the spread-out nature of even relatively dense American cities, it will be a very, very long time before rail transit can connect truly large numbers of people to large numbers of jobs and amenities. When Minneapolis opened the 12-mile Blue Line light rail in 2004, for example it was a major step forward for Twin Cities transit-but still, only 2% of the region’s population lived close enough to walk to one of the stations. For everyone else, transit still meant taking the bus.”
Back in June 2014, I wrote about a planned revamp of Houston’s bus system. The “frequent network” plan proposed by Jarrett Walker aimed to refocus bus routes and frequencies toward corridors and areas with high potential ridership and away from places with low potential ridership. The overall goal was to increase the fraction of potential riders with access to frequent service from 49% on weekdays to 73% seven days a week. After much debate, a version of the plan was implemented in August 2015. A November 9th report in the Houston Chronicle revealed a mixed bag of changes thus far. Total transit ridership (bus and light rail) in September was 4% above the previous year, but September’s fare revenue was 6.4% less than in the previous year. These are early days, and Houston Metro is continuing to tweak and fine-tune the changes. I plan to report further on this worthwhile effort once it has been in place more than a year.
Will the FAST Act Rejuvenate the Interstate Reconstruction Pilot Program?
by Fredric W. Kessler, Nossaman LLP (guest article)
Since its inception, the Interstate System Reconstruction and Rehabilitation Pilot Program (Pilot Program) has produced plenty of hope and hype but not a single mile of reconstructed Interstate. The Pilot Program, enacted in 1998 under Section 1216(b) of TEA-21, authorizes the Federal Highway Administration to select up to three states to each toll one Interstate to pay for its reconstruction and rehabilitation. The three selected states – Missouri, Virginia and North Carolina – have not proceeded with any project under the Pilot Program. That’s 17 years with nothing to show, in a nation facing over a $1 trillion dollar price tag in the next two decades to reconstruct our aging Interstate system.
Seeking to rejuvenate the moribund state of the Pilot Program, several industry stakeholders, including the Reason Foundation, IBTTA, Transportation Transformation (T2) Forum and others, argued for expansion and reform of the Pilot Program as part of the FAST Act. Proposals were floated to increase the number of states that could enlist under the Pilot Program from three to ten, allow a single state to reconstruct more than one Interstate, and assure slots were vacated and rotated if a state took no action under its authorization within a reasonable period. The brave political souls in Congress, however, ran from the Hill to the hills when the words “toll” and “Interstate” were uttered in the same sentence, as if fleeing the 1832 DC cholera outbreak.
At least they did not kill the Pilot Program outright. Instead, section 1411(c) of the FAST Act (https://www.congress.gov/114/bills/hr22/BILLS-114hr22enr.pdf) modestly revised the Pilot Program to incorporate a use-it-or-lose-it provision. The three states with existing authorization now must actually do something within a year from enactment of the FAST Act, or lose the authorization. If slots open up, as appears likely, FHWA may grant authorization to other states, which in turn are subject to a use-it-or-lose-it mandate.
The Pilot Program now operates under a two-step process established in the FAST Act. The first step is submission and acceptance of a provisional application. It must demonstrate partial satisfaction of statutory eligibility criteria and selection criteria. It is left to FHWA to identify which criteria must be satisfied at this stage. If FHWA approves a provisional application, the state receives reservation of a slot in the Pilot Program and has three years to complete the second step: (1) submission of an application that satisfies all statutory eligibility and selection criteria, (2) completion of environmental review and permitting for the project under the National Environmental Policy Act [NEPA], and (3) execution of a tolling agreement with FHWA.
FHWA may extend the three-year period by one additional year, provided it is satisfied the state is making “material progress toward implementation of the project.” Evidence for this must include “substantial progress” in the NEPA process, funding and financing commitments for the project, expressions of state and local governmental, community and public support for the project, and submission of the facility management plan. In short, the project must make substantial strides from concept toward actual implementation within the three to four year reservation period.
It is significant, however, that the FAST Act does not require actual procurement and letting of design and construction contracts for the project during the use-it-or-lose-it period. While stakeholders proposed such a provision to make sure a slot is not tied up while a pilot project sits on the shelf indefinitely, it did not make its way into the bill.
The Pilot Program has numerous eligibility criteria and other requirements. These include the following:
- The state must demonstrate that the proposed project cannot be adequately maintained or functionally improved from the state’s federal aid apportionments and allocations and from other highway revenues. While we have little guidance from FHWA on how it applies this requirement, there are reasons to believe FHWA will not be rigid. Under a rigid interpretation, the state would have to allocate all its available capital budget for surface transportation to Interstate reconstruction as the top priority and demonstrate that this allocation is insufficient for Interstate rehabilitation and reconstruction. But this interpretation beggars all other state highways. Under a more reasonable interpretation, the FHWA would defer to a state’s reasonable prioritizations in its surface transportation capital budget and go from there.
- The state must establish a facility management plan acceptable to FHWA, including a tolling plan, schedule and finance plan. As for the tolling plan, we have little guidance or precedent to inform states how FHWA will exercise this approval right. Will FHWA impose demand management pricing? Will it insist that some lanes remain toll-free? Will it limit toll rates? Or will it defer to the state and its political decisions on the tolling regime? As for the balance of the facility management plan, the requirements are similar to the project management plans and financial plans required for federalized major projects.
- For a project “that affects a metropolitan area”, the application to FHWA must include an assurance that the MPO for the area has been consulted concerning the placement and amount of tolls on the project.
- FHWA will not approve the application unless the state’s tolling plan “takes into account the interests of local, regional, and interstate travelers.” FHWA might apply this requirement to prevent or moderate toll discounts and waivers for local traffic, or to impose its perception of fair tolling allocations between commercial and passenger traffic.
- The state must have the authority to proceed. The FAST Act added this obvious prerequisite. If state statutory authority to toll the proposed Interstate project does not exist, it seems doubtful that FHWA would be interested in reserving for the state one of the three slots.
There are additional requirements as well. One of the most important is the Pilot Program’s limit on use of toll revenues to debt service; reasonable return on investment of any private investor; and costs to reconstruct, operate, maintain, and improve the project. Annual audits of project costs and toll revenues are required. Unlike other tolling authorizations under federal law, such as 23 USC §129 (§129), the Pilot Program does not allow use of excess toll revenues for other Title 23 purposes. The implication is that toll rates must be monitored and adjusted as necessary to keep revenue generation roughly at or below the project’s total costs.
[Editor’s note: a slightly longer version of this article is also appearing in TollRoadsNews.com.]
Intercity Buses Reach New Highs
Last month the Chaddick Institute at DePaul University released its eighth annual report on the revolution in intercity bus service in the United States, “The Remaking of the Motor Coach: 2015 Year in Review of Intercity Bus Service in the United States.” It’s well worth reading, not only for its profile of a reinvigorated transportation industry but also for its public policy implications.
As might be expected, the plummeting price of fuel in 2015 diverted some potential intercity bus passengers to driving, but the estimated total passenger trips on intercity bus lines increased modestly from 60.6 million in 2014 to 61.6 million in 2015. That is about twice the number served by Amtrak, which carried 30.8 million in FY 2015. Bus miles of service also grew modestly from 386.6 million to 393.6 million. About half the market is served by “conventional” companies such as Greyhound and Trailways. The rest is made up of city-to-city express services (Megabus, Bolt Bus, Red Coach, etc.), Latino bus companies, and a revamped Chinatown market segment.
The competition from the express (sometimes called luxury) companies has led the conventional carriers to up their game. Greyhound is making free wi-fi and power outlets standard on its fleet, and has introduced a new website and several categories of fares and seating, a la airlines. Megabus has introduced reserved seating and a partnership with Google Maps, and Uber has a new partnership with BoltBus. Two leading bus ticketing aggregators-Wanderu and Busbud-continue to expand their services, offering comparative shopping assistance for intercity bus travel. Busbud now offers mobile booking apps for both Android and iOS devices. Both Greyhond and Red Coach now offer real-time tracking of their buses, so that arrival times can be pin-pointed.
State governments in the Midwest and Great Plains are starting to make deals with intercity bus companies to provide specified services connecting small and medium-size cities. Colorado DOT has contracted with start-up Bustang to link Colorado Springs, Fort Collins, and Glenwood Springs with Denver. The state of Ohio is funding expanded service by GoBus’s partner Barons Bus Lines linking places like Akron with Parkersburg, WV. Several of these bus companies are partnering with Amtrak, to link cities not served by Amtrak with some of its rail stations.
The public policy implications of this growing private-sector industry are significant. Not counting relatively new subsidized contract services, intercity bus companies serve five times as many cities as Amtrak, generally at much lower fares (e.g., Boston to New York for $30 or less, with a choice among six carriers each offering a half-dozen daily trips each way). Even the state-subsidized bus services are far less costly than the federally subsidized EAS (Essential Air Service) routes to small towns, which often cost taxpayers several hundred dollars per passenger.
The relevant question is why federal taxpayers should continue to invest several billion dollars per year to subsidize Amtrak and over $250 million per year to subsidize EAS at 159 small communities. An investor-owned, mostly unsubsidized, highly competitive industry is providing far more service to far more communities than Amtrak and EAS. What public purpose is served by keeping them in business?
Incidentally, intercity bus service is growing rapidly in Europe and Mexico, too. The European Union has finally deregulated such bus service across national boundaries, and various countries (France, Italy, Germany, Sweden, the U.K.) are now allowing private bus companies to compete in-country with their heavily subsidized intercity passenger trains. And money-losing Air France is feeling the heat from low-cost bus companies; in response, it is merging its three regional airline subsidiaries in hopes of reducing their costs and making them more competitive with the emerging bus market.
Truck Platooning Gaining Further Attention
December saw the release of a “Future Truck Program Position Paper” from the American Trucking Associations’ Technology & Maintenance Council (TMC). It was developed by TMS’s Automated Driving and Platooning Task Force, chaired by consultant Richard Bishop. As he pointed out in a recent column in Thinking Highways, this is the first report on truck platooning from the perspective of the trucking user community.
The report looks mostly at near-term truck platooning, via automation levels 1 and 2, with level 1 meaning automation of the distance between trucks (longitudinal) and level 2 adding lateral (lane-keeping) control. While positive on the potential of platooning, the report points out the need for research into an array of unanswered questions, such as the time needed for a truck driver to re-engage if the system fails, possible disorientation of drivers in the following vehicles who lack forward vision due to the truck(s) ahead, traffic impacts of platooning in various settings, the likelihood of passenger cars cutting in between trucks in the platoon (depending on truck spacing), criteria for joining a platoon, etc. There is also a need for trucking industry discussion with the insurance industry about the benefits and risks involved in truck automation, with some industry analysts seeing the potential for reduced accidents leading to reduced insurance costs as a benefit that might exceed fuel cost savings. In parallel with TMC’s efforts, the Texas A&M Transportation Institute is launching a new project on level 2 truck platooning, sponsored by Texas DOT.
There will clearly need to be policy and regulatory changes in order for truck platooning to become an everyday reality. The TMC report suggests the development of model legislation, though this may be difficult until more is learned from technology demonstrations. An example of a premature regulation is cited in the TMC report: Florida requires a minimum distance of 300 feet between platooned vehicles, which would greatly reduce the drag-reduction effects that lead to the expected fuel savings.
The more I try to envision platoons of four or five 18-wheelers barreling down the Interstate just 40 feet apart at 65 mph, the harder it is to imagine ordinary passenger cars being compatible with such platoons. If they are in the right-hand lane, the platoons could form a serious barrier to cars entering or leaving the Interstate-or create the risk of serious accidents if a car tries to dart between the platooned trucks. We need to start serious planning for Dedicated Truck Lanes (DTLs), as envisioned in the four-state I-70 Corridors of the Future study last decade.
Tolled Grade Separations Emerge in Texas
In last month’s issue I wrote about the development of low-clearance underpasses in Malaysia, as a way to enable through traffic to bypass signalized intersections, thereby increasing the throughput of major arterials. This idea is similar to the concept Chris Swenson and I developed called “managed arterials,” under which electronically tolled underpasses or overpasses would be added to six-lane arterials as a way to increase their throughput without widening.
In response to that article, my friend Chuck Fuhs (co-chair of the TRB Managed Lanes Committee), emailed me that TxDOT is already doing this in the Austin and Houston metro areas. He pointed out that the latest segment of SH 99, the Grand Parkway around Houston, “is in fact a series of tolled grade separations connected by ‘free’ frontage roads built years earlier. TxDOT has long followed a practice of using frontage roads as a first stage template for eventual mainline construction, with right of way acquired up-front for the ultimate cross section.” But because of funding shortfalls in recent decades, the development of the mainline has been delayed for years, and sometimes decades. That left drivers on these frontage roads to negotiate a string of traffic signals. “As traffic volumes grew, these signals became significant mobility impediments.” So now TxDOT is building toll-financed grade separations (overpasses in these wide open spaces). On SR 99, these improvements are going in between US 59 (Sugarland) and the Westpark Tollroad. As in the “managed arterial” concept, motorists have a choice between paying the electronic toll to bypass the traffic signal or remaining on the frontage road and using the signalized intersection.
A similar approach is being taken along a portion of SH 71 between Austin Bergstrom International Airport and the SH 130 toll road. So TxDOT gets the laurels as the first state to implement optional, electronically tolled grade separations. Which DOT will be next?
Upcoming Transportation Events
Note: I don’t have the time or the space to list all transportation events that might be of interest to readers of this newsletter. Listed here are events at which a Reason Foundation transportation researcher is speaking or moderating.
Valley Industry & Commerce Association Transportation Committee, March 8, 2016, North Hollywood, CA (Baruch Feigenbaum speaking). Details at: http://business.vica.com/events/details/03-08-16-transportation-committee-1126
IBTTA Transportation Policy & Finance Summit, March 13-15, 2016, Washington Marriott Georgetown, Washington, DC (Adrian Moore and Bob Poole speaking). Details at: http://www.ibtta.org
California Transportation Commission Meeting, March 17, 2016, Transportation Corridor Agencies, Irvine, CA (Baruch Feigenbaum speaking). Details at: http://www.catc.ca.gov
TRB 15th International Managed Lanes Conference, May 4-6, 2016, Hyatt Regency Miami, Miami, FL (Baruch Feigenbaum and Bob Poole speaking). Details at: http://www.cvent.com/events/15th-international-conference-on-managed-lanes/event-summary-d40624486a524f089008e8abfb946760.aspx
Universal Electronic Tolling Built Into Vehicles. On January 4th, Gentex and TransCore announced that they will offer automakers a built-in transponder that will work with all existing electronic toll collection systems nationwide. Gentex will integrate TransCore’s new Universal Toll Module (UTM) into Gentex’s electronic rearview mirrors. This is another step toward achieving the goal of nationwide interoperability of electronic toll collection, without toll operators having to replace their tolling systems with new equipment. Another potential market is the trucking industry, whose two providers of electronic tolling could adopt the new UTM as a nationwide single-transponder solution.
VMT Set All-Time High in 2015. The Federal Highway Administration reported on Feb. 22nd that vehicle miles of travel reached an all-time high of 3.148 trillion in 2015. That beat the previous record on 3.003 trillion miles set in 2007, and shows the continuation of the resumed VMT uptrend that has coincided with economic recovery from the Great Recession.
Indiana Toll Road to Get Quarter-Billion in Improvements. The new Indiana Toll Road Concession Company, which took over last year, announced recently that it will invest $200 million over the next four years to rehabilitate about 70 miles of the aging highway. It will also spend $30 million modernizing the toll plazas, as well as adding video surveillance and dynamic message signs; altogether the investments will total $260 million. Last fall the company also announced a plan to replace eight service plazas along the toll road.
Detailed Compilation of State P3 Transportation Measures. The National Conference of State Legislatures has released a detailed document called “Public-Private Partnerships for Transportation: Categorization and Analysis of State Statutes.” This report allows public officials in states whose enabling measures have not led to any investment to compare and contrast the provisions of their statute with those of states where investors are developing projects. It should also serve as a guide for states that have not yet enacted such legislation on what kinds of provisions should be included.
First Tolled U.S./Mexico Border Crossing Planned. The San Diego Association of Governments is working with the U.S. and Mexican governments on Otay Mesa East, a new border crossing for cars and trucks that would be financed via toll revenue bonds. Plans call for 10 car lanes and 10 truck lanes at the new facility. It would be the third border crossing in the San Diego/Tijuana area, and is aimed at reducing the very long waits at the two existing crossings. Vehicles using the crossing would then connect to the Interstate highway system via a short new toll road, SR 11, to be developed by Caltrans.
Limited-Access Better than Continuous Access for Managed Lanes. A new study by three researchers at UC Riverside and one at Caltrans compared the mobility performance of California HOV lanes. Those in northern California offer continuous access, while those in southern California offer ingress and egress only at designated points. Their modeling results using data from the state’s freeways found that “freeway segments with limited-access HOV lanes would have higher overall capacities than those of continuous-access HOV facilities, everything else being equal.” The paper, “Different Types of High-Occupancy Vehicle Access Control,” was published in TRB’s peer-reviewed journal Transportation Research Record No. 2484, in 2015.
CBO Projects Dire Budget Outlook. Thanks in part to spending increases and tax cuts enacted last fall by Congress, the annual federal budget deficit will triple over the next decade, from $438 billion in 2015 to $1.37 trillion in 2026, estimates the Congressional Budget Office’s January 2016 Budget Forecast. And thanks to the resulting ever-larger national debt and rising interest rates, interest payments on that debt will nearly quadruple, from $223 billion in 2015 to $830 billion in 2026. Combined with rapid growth in entitlement spending over this period, one result will be a budget squeeze for discretionary programs-such as general fund bailouts of the Highway Trust Fund.
Seattle Tunnel Boring Machine Halted Again. Despite resuming its task in December of boring the 1.7 mile highway tunnel to replace the aging Alaskan Way Viaduct, tunnel boring machine Bertha was ordered to stop on January 14th by Gov. Jay Inslee, due to the development of a sinkhole about 35 feet north of the access pit that had been used to repair the machine’s cutter head last year. In response, the state DOT ordered the contractor to develop an analysis and modify its tunneling operations to ensure no further sinkholes, before it will permit tunneling to resume.
Transurban Acquires Bankrupt Tunnel at Huge Discount. Brisbane’s 6.7 km Airportlink M7 tunnel was built based on toll revenue financing, but the concession company went bankrupt when traffic and revenues were less than one-third of its forecasts. Australian toll concession company Transurban and partners acquired the facility out of receivership by paying $1.35 billion-compared with the tunnel’s $3.46 billion cost to construct. There was no taxpayer bailout; the original investors took the loss, consistent with the risk transfer principles used in toll concessions in both Australia and the United States.
Feds Decide that the Automation in Fully Autonomous Vehicles Is the “Driver”. Earlier this month, the National Highway Transportation Safety Administration responded to a query from Google. How, the company asked, would the numerous Federal Motor Vehicle Safety Standards be applied to a fully autonomous vehicle, without any driver controls? In a detailed posting on its website, NHTSA replied that for purposes of the federal regulations, the automation system is the driver. This is a significant development for autonomous vehicles.
Three Teams Short-Listed for Detroit-Windsor Toll Bridge. The Windsor-Detroit Bridge Authority has announced the three teams it has selected as best-qualified for the design-build-finance-operate-maintain (DBFOM) concession for the $2.2 billion Gordie Howe Bridge connecting the two cities and their two countries. The teams are led by SNC Lavalin/Vinci/John Laing, ACS Infrastructure/Fluor/Aecon, and Fengate/BBGI/EllisDon/Bechtel. Although the bridge will be tolled, the concession contract will be based on availability payments.
Britain’s M6 Toll Road for Sale. The 27-mile $1.3 billion M6Toll road near Birmingham has never made money, though its traffic has recently recovered to pre-recession levels. It opened in 2003 under a 50-year toll concession. A recent debt restructuring via a consortium of 27 banks led to them acquiring the equity stake of original developer/operator Macquarie. With traffic and revenue now on the upswing, and interest rates at record lows, the banks have put the toll road on the market, hoping to sell it for over $2 billion.
“[Some clean-energy enthusiasts] have this statement that the cost of solar photovoltaic is the same as hydrocarbon’s. And that’s one of those misleadingly meaningless statements. What they mean is that at noon in Arizona, the cost of that kilowatt-hour is the same as a hydrocarbon kilowatt-hour. But it doesn’t come at night, it doesn’t come after the sun hasn’t shone, so that fact that in that one moment you reach parity, so what? The reading public, when they see things like that, they underestimate how hard this thing is. . . . People think, Oh well, I’ll just get an electric car. There are places where if you buy an electric car, you’re actually increasing CO2 emissions, because the electricity infrastructure is emitting more CO2 than you would have if you’d had a gasoline-powered car.”
-Bill Gates, interviewed by James Bennet, “We Need an Energy Miracle, The Atlantic, November 2015
“The report [from American University] . . . shows that local millennials aren’t as reliant on public transit as stereotypes would lead one to believe. Often touted as green-conscious, bike-share, rapid-transit and ride-hailing heavies, the Washington region’s millennials are still largely dependent on the auto. According to the study, three times the number of Washington area millennials drive to work than use Metro. And the Metro figure-about 20 percent-barely edges those who walk, jog, rollerblade, and even hoverboard to their jobs. . . . ‘The reality from our study is that 60 percent of greater Washington area millennials are driving alone to work often or always,’ the report said.”
-Faiz Saddiqui, “For Millennials, Commuting Around DC Means Choosing ‘the Lesser of their Evils’-and That’s Driving,” The Washington Post, Feb. 14, 2016
“It’s often said that Americans vote with their pocketbooks. Simply put, politicians who want to raise taxes have trouble getting re-elected. If our elected leaders are unwilling to take that risk to truly fix our infrastructure funding needs, then now is the time to start working on alternative plans. When 2020 rolls around, hopefully the negotiating team for the next highway bill can focus on moving our transportation system into the 22nd century rather than on which federal department’s coffers can be raided for upkeep of a crumbling highway system.”
-Brian Straight, “The Great Money Raid,” FleetOwner, January 2016
“The connection between growing inequality and rising property prices is fairly direct. Thomas Piketty, the French economist, recently described the extent to which inequality in 20 nations has ramped up in recent decades, erasing the hard-earned progress of previous years in the earlier part of the 20th century. After examining Piketty’s groundbreaking research, Matthew Rognlie of MIT concluded that much of the observed inequality is from redistribution of housing wealth away from the middle class. Rognlie concluded that much of this was due to land regulation, and suggested the need to expand the housing supply and re-examine land-use regulation that he associates with the loss of middle-class wealth. Yet in much of the country, housing has become so expensive as to cap upward mobility, forcing many people to give up on buying a house and driving many-particularly young families-to leave high-priced coastal regions for less-expensive, usually less-regulated, markets in the country’s interior.”
-Joel Kotkin, “This Is Why You Can’t Afford a House,” NewGeography.com, Feb. 9, 2016
“The next round [of channel deepening, etc.] is bound to be exponentially more expensive than the current one-with no prospects of federal assistance. It is unlikely that U.S. ports will undertake the huge investments involved in the next round without such assistance. In fact, they do not need to; they are at no risk of losing shipping services. Facing constrained channels, shipping lines will have two options: (a) resorting to the present practice of partial-loading and tide waiting; and (b) modifying their service pattern, substituting direct with feeder services, using foreign hub ports to avoid the high costs of U.S.-flag ships and U.S. ports. Which option will prevail? The option that shipping lines-not the federal government-will determine to be more economical.”
-Prof. Asaf Ashar, “Devolution De-Facto of U.S. Ports’ Channels,” Journal of Commerce Annual Review and Outlook, Nov. 15, 2015