Surface Transportation News #153
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Surface Transportation Innovations Newsletter

Surface Transportation News #153

Bottlenecks and congestion costs | AAA open to MBUFs and value-added tolling

In this issue:

Bottlenecks Study Highlights Congestion Costs

Thanks to the regular reports on urban mobility from the Texas A&M Transportation Institute, we all know that traffic congestion extracts a huge cost in wasted time and fuel, especially on America’s urban expressways. The worst traffic snarls are chronically congested interchanges and stretches of urban freeway in a handful of the largest metro areas. That is the subject of a recent report from the Highway Users Federation, “Unclogging America’s Arteries 2015: Prescriptions for Healthier Highways.”

Using data on vehicle speed from GPS probe vehicles, collected by the American Transportation Research Institute and HERE North America, the report identifies the top 50 bottlenecks as measured by total annual vehicle delay hours, and estimates the annual value of lost time and wasted fuel due to those delays. Most of the report focuses on the top-30 bottlenecks, as I do in this article.

Perusing the top-30 table, what struck me immediately is how Los Angeles bottlenecks dominate, accounting for 49% of the total delay costs ($1.27 billion out of $2.37 billion), with 11 of the top 30 bottlenecks located in the LA metro area. Chicago comes in second, with two major bottlenecks totaling $449 million per year (mostly due to the notorious 12-mile stretch of I-90 between Roosevelt Rd. and N. Nagle. Ave.).

Next is the greater New York metro area, with five bottlenecks totaling $280 million per year. Texas is fourth, but its four bottlenecks are distributed among Austin, Dallas, and Houston, totaling a relatively modest $158 million a year. The remainder of the top 30 are accounted for by the Boston, Seattle, Miami, Atlanta, and Washington metro areas, with only one or two apiece in the top 30.

The purpose of a report like this is to focus attention on the most serious bottlenecks, as a way to encourage not only increased highway investment but also priority-setting by state DOTs. There can be a lot of bang for the buck in alleviating such bottlenecks, as Miami did by implementing express toll lanes on what had been the most-congested corridor in Florida, I-95 between the Golden Glades interchange and downtown Miami. Virginia did likewise with the notoriously congested Beltway (I-495). Neither of these former bottlenecks appears on the list. Adding express toll lanes to many of the top-30 bottleneck stretches of expressway should be prioritized in metro area long-range transportation plans.

Another bottleneck remedy is reconstructing obsolete interchanges, many of which handle double or more the traffic levels they were designed for. These are costly and complicated projects, which is why only a handful of them have been accomplished over the past decade or so, notably the Springfield Interchange in northern Virginia and the Marquette interchange in Milwaukee. The latter cost $810 million, but has dramatically reduced congestion. Wisconsin DOT completed a second such project recently, reconstructing the Mitchell Interchange near the Milwaukee Airport. In this case, community opposition to proposed three-level elevated structures led to a design featuring three cut-and-cover tunnels to minimize visual and noise impacts—and actually reduced the project cost by $10 million, to $270 million.

Projects of this magnitude, with clear user benefits in terms of reduced travel time and fuel savings, lend themselves to user-pays toll financing, and without other large new sources of highway funding, in many cases the answer will be toll-way or no-way.

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AAA Opens Up to MBUFs and Value-Added Tolling

AAA, by far the nation’s largest highway user group—with 56 million members—has quietly modified its policies toward two key funding and management tools: mileage-based user fees and customer-friendly tolling. The changes were made by the AAA board at its December 2015 meeting in Seattle, and were discussed with delegates at the group’s Annual Meeting in May 2016.

In reviewing the changes with me, AAA Senior Vice President, Public Affairs, Kathleen Bower, stressed that although AAA continues to support increasing federal fuel taxes as “the most immediate and effective means to meet near-term transportation funding needs,” they “will consider and on a case-by-case basis may actively engage in discussions on a range of alternative funding options,” including tolling and MBUFs.

The back story on these changes spans several years. In March 2014 Reason Foundation released a policy study called, “Value-Added Tolling: A Better Deal for America’s Highway Users.” It focused on 21st-century highway funding challenges, such as the $1 trillion cost of reconstructing and modernizing the Interstate highway system, and the ongoing gridlock in Washington, DC over increasing federal fuel taxes. It noted that tolling had a bad image with highway user groups, in part because some state governments over time had converted tolled highways into cash cows for non-highway purposes. It set forth proposals for future user-friendly tolling policies: configuring such tolls as pure user fees, using them as a replacement for fuel taxes on the highways where they would be used, and basing them on all-electronic tolling with no toll booths or plazas of any kind.

This study came to the attention of Bower and other AAA officials in Washington, DC, and that April I gave a presentation on it to the group’s national public affairs and issues committee. That led, ultimately, to my giving an updated version of the presentation to the AAA governing board last December in Seattle.

The Mileage-Based User Fee Alliance had pursued a similar dialog with AAA officials in 2014-15, so the session in Seattle also featured a presentation making the case for replacing fuel taxes with mileage-based user fees, delivered by Jack Basso of MBUFA. Jack and I engaged in fairly extensive discussion with AAA board members following our presentations. And we were both very pleased to learn that the board had voted to change its policy to be open to both user-friendly tolling and MBUFs on a case-by-case basis.

This is a big deal, because there will be no federal fuel tax increase during the next five years, at least, and because interest in toll-financed Interstate highway reconstruction is increasing. On July 7th Missouri DOT Director Patrick McKenna reiterated his support for toll financing as one of the options. This is especially relevant, since Missouri holds one of three slots in a federal pilot program that permits toll-financed reconstruction of a currently non-tolled Interstate, with crumbling I-70 as its well-studied case in point. But if Missouri legislators fail to enact tolling authorization by the end of this year, they will likely lose that slot to other states (e.g., Connecticut, Rhode Island, and Wisconsin) interested in toll-financed Interstate reconstruction.

With the American Trucking Associations (ATA) still opposing even user-friendly tolling, qualified support from the relevant AAA affiliate in Missouri might make a crucial difference in the outcome.

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Managed Lanes Maturing, Adding New Locations

In my June column in Public Works Financing, I wrote about two ongoing developments in the evolution of priced managed lanes. First, a growing number of projects now require at least three people in the vehicle to qualify for free passage; 10 such projects are in operation, with more under construction (such as the I-77 project in Charlotte). Second, there’s a newer trend to exempt only buses and registered vanpools (i.e., super HOVs) from paying tolls, with three such projects in operation and a new one about to open (Mopac, in Austin, TX).

There are two reasons for these changes, as more experience is gained with priced managed lanes. To effectively use variable pricing to keep traffic flowing smoothly, nearly all the vehicles using the managed lanes must be affected by those prices. Policies like those on several California projects that give a majority of vehicles free passage (as HOV-2s or alternative-fuel vehicles) risk traffic flow breakdown, defeating the purpose and value of variable pricing. The second reason is that large metro areas increasingly intend to build out seamless networks of managed lanes. But most of the lane-miles in these networks, of necessity, will be new construction. And for that to be affordable, there needs to be robust toll revenue, on which financing of the projects can be based.

So I’ll venture to say that the days of HOV-2 “HOT lanes” are numbered, and from here on out, we will be seeing primarily true express toll lanes, in which everybody except very high-occupancy vehicles (buses, primarily) will be paying variable tolls.

Atlanta is a good example, as columnist Kyle Wingfield noted recently in his blog for the Atlanta Journal Constitution. He pointed out that Georgia DOT’s plan to spend about $11 billion over the next decade adding express toll lanes to the metro Atlanta freeway system is an $11 billion investment in transit guideways—if the region’s transit agencies have the good sense to take full advantage of the emerging uncongested network.

Austin, as noted above, is about to open the northbound lane of its new Mopac express toll lanes project, which will be free only to buses, not HOVs. And Capital Metro is planning new express bus routes to take advantage of Mopac and several other express toll lane projects that are under way in the region. The most ambitious of these would spend $4 billion revamping congested I-35 through the metro area, including express toll lanes that, again, would be free only for Capital Metro express buses.

In Charlotte, I’m pleased to report that the state Senate did not take up the bill passed by the state House that would have cancelled the concession agreement under which the I-77 express toll lanes are already under construction. Like most new-construction projects, this one will require a minimum of three persons in the vehicle to obtain free passage, consistent with the project financing for the $647 million project being based on toll revenues.

Chicago last month saw the opening of reversible express toll lanes on the Chicago Skyway, which is being managed, operated, and improved under a 99-year toll concession. The new express lanes will use all-electronic tolling and will exclude trucks. The natural extension of the project would be converting to variable tolling the reversible (non-tolled) express lanes on the Dan Ryan Expressway (I-90), that begin at the northern end of the Skyway. And that project, in turn, could jump-start long-discussed plans to add express toll lanes to other portions of Chicagoland’s very congested freeway network. Similar non-tolled express lanes operate on the Kennedy Expressway, and could also be converted to variable pricing.

The Dallas/Fort Worth metro area, with express toll lanes in operation on both the LBJ Expressway (I-635) and the North Tarrant Express, has another such project under construction on US 360. A joint effort of the North Texas Tollway Authority, the North Central Texas Council of Governments, and Texas DOT, the $330 million project is adding two express toll lanes each way over a nearly 10-mile stretch of this expressway. A second phase to extend the new lanes would bring the total cost to $604 million.

Houston is under way on the first of its managed lanes to be developed as a toll concession. The project, close to beginning construction, will add 10 miles of express toll lanes each way in the median of SH 288, from Brazoria County to US 59 in Houston itself.

A new entrant into the express toll lanes field could be Little Rock, AR. The Arkansas Highway & Transportation Dept. is considering a major widening of I-30, from I-530 in Little Rock to Benton, home of Walmart’s corporate headquarters. The Little Rock MPO, Metroplan, has a regional high-occupancy toll lanes study under way.

In Tampa, FL, the long-running controversy over Florida DOT’s plans for a $3.5 billion Tampa Bay Express network of express toll lanes picked up important endorsements in June. Local transit agency HART “unequivocally” supported TBX, and was followed by an endorsement from the South Tampa Chamber of Commerce. The following week, the Hillsborough MPO voted 12-4 to support the project, including it in the MPO’s long-range transportation plan.

Finally, the congestion-plagued Washington, DC metro area got some good news early in July. Virginia DOT won a $165 million federal FASTLANE grant, which will cover its share of already-approved projects under which concession company Transurban will extend the I-95 express toll lanes 10 miles further south toward Fredericksburg and about 7 miles north along I-395 to the Potomac River. And across the river, the Southern Maryland Transportation Alliance is working to build support for relieving congestion on I-270 by adding two express toll lanes each way, to be toll-financed under a P3 concession agreement. If this project goes forward, it would yield another link in the emerging express toll lanes network in the metro DC region.

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What’s Behind the Great Transit Crack-up?

This year has seen a plethora of major troubles in legacy transit cities—Boston, San Francisco, and Washington, DC in particular (but there are also serious deferred maintenance problems in Chicago and Miami). In addition, there were major disruptions within the American Public Transit Association, the trade association for nearly all of America’s public transit systems.

The year began with what has been described as a “melt-down” at the Massachusetts Bay Transportation Authority, which failed to keep its trains running during a snow storm. San Francisco’s 44-year old BART system had to take 50 railcars out of service in March due to damage to electronics from a still-unexplained power surge. Philadelphia’s SEPTA recently took a fleet of new Silverliner railcars out of service, due to cracks in a key component of their suspension system. But by far the greatest fiasco was the closure of the Washington Metro for an all-up safety inspection, after a series of crashes and fires that have included a number of fatalities.

Broadly speaking, deferred maintenance is the common factor in most of these cases. As DOT Secretary Anthony Foxx put it in remarks delivered June 29th, the mentality in previous decades was “build it, build it, build it, and let’s worry about repairs later. We bought the house, but didn’t set aside any maintenance dollars for the house. So the roof got leaky, the floorboards started popping up. We decided we could live with it for a while, and now things have gotten so that the repairs are so much more expensive.” Referring to the Washington Metro in particular, Foxx said, “My view is that Metro needs to really get its house in order and focus on what it has, before thinking about doing any expansion.” Better late than never, but it’s tragic that no previous DOT Secretary (say 10 years or so ago) had the courage to say that.

The problem at many of these agencies is basically the incentives of the political appointees who constitute their governing boards. Zachary Schrag’s 2006 book, The Great Society Subway: A History of the Washington Metro, includes a serious discussion of what even then was “a looming maintenance backlog” that was greatly exacerbated “by the constant desire of politicians to prioritize shiny new stations and extensions,” rather than boring old maintenance work. (The quotations here are Eno Transportation Weekly editor Jeff Davis’s paraphrase of Schrag’s discussion.) In other words, what we have is an institutional failure, at its core a dysfunctional governance model.

In the case of San Francisco’s BART, much of its current maintenance problem was self-inflicted by engineering hubris. Back in the early ’60s, determined to reinvent rail transit, its designers opted for a unique 5′ 6″ track gauge, which required custom-made trucks and wheelsets, brake systems, and track repair vehicles, not currently available from any suppliers. They created a unique 1,000-volt electrical power system, for which no replacement parts are available. The train control system, still using 1972 microprocessors, is responsible for more than 25% of all delays, because it creates “ghost trains” wherein the computer freezes train movements due to images of a train that is not there.

While all this was going on, a great shake-up took place at APTA. It began late in March when New York’s Metropolitan Transportation Authority announced that it was quitting the organization, effective immediately. In its letter explaining the decision, MTA’s top officials noted that there were no Legacy System members on the APTA Executive Committee, nor any operators of commuter rail systems—two segments that “alone make up the overwhelming majority of total customers served by public transit” in this country. Moreover, there was only one Executive Committee member from the Northeast, compared with six from California alone. The Legacy System members alone (all major rail and bus operators) account for almost 60% of all transit passengers. Their needs, especially “state of good repair” needs, are “an order of magnitude greater than the non-Legacy rail systems.” And after a period of serious cost-cutting at MTA ($1.8 billion in reduced costs in a $14 billion annual budget), MTA could not justify the $400,000 annual cost of continued APTA membership, compared with the value it was receiving from other memberships.

Less than a month after MTA’s April 8th letter, APTA President Michael Malaniphy had resigned, after less than five years on the job. So far there have been no announced changes to APTA’s Executive Committee, but Vice President Rosemary Sheridan told Politico that the criticisms raised by the MTA would not be ignored. Given how serious the problems facing legacy transit systems have become, that would be an appropriate challenge for APTA to focus on under a new president.

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Is the Connected Vehicle Mandate Needed for Autonomous Vehicles?

Guest article by Ronald Bailey, Science Correspondent, Reason magazine (adapted from “Will Politicians Block Our Driverless Future,” Reason.com, June 18, 2016)

There are two “equally important components that will determine the future of autonomous vehicles,” Lyft’s vice president for government relations, Joseph Okpaku said at a March Senate Commerce Committee hearing. “The first is the interaction of everyday people with these new vehicles, and the second is the much more unpredictable interface of government with this entirely new transportation resource.”

University of Texas engineer Kara Kockelman notes that traditional automakers tend to “see the transition to self-driving as a very natural, very normal process adding over time features like GPS, adaptive cruise control, cameras, lane-keeping-assist systems, dedicated short-range communication, and so forth.” Such semi-autonomous vehicles can safely operate only in predictable traffic environments, so some manufacturers are suggesting that dedicated additional infrastructure, such as separate highway lanes, be built for them.

But “special lanes are a bad idea,” says Kockelman. “They would be incredibly expensive and constraining.” Planners, politicians, and regulators may think that establishing dedicated infrastructure for self-driving cars is helpful, but autonomous vehicle pioneer Brad Templeton notes that “such rules could easily lead to them not being allowed in ordinary lanes.”

Kockelman argues that semi-autonomous vehicles, or what NHTSA calls “limited self-driving automation,” present a big safety problem. With these so-called Level 3 vehicles, drivers cede full control to the car for the most part, but must be ready at all times to take over if something untoward occurs. The problem is that such semi-autonomous cars travel along safely 99 percent of the time, allowing the attention of their bored drivers to falter. In an August 2015 study, NHTSA reported that depending on the on-board alert, it took drivers as long as 17 seconds to regain manual control of the semi-autonomous car. “The radical change to full automation is important,” argues Kockelman. “Level 3 is too dangerous. We have to jump over that to Level 4 full automation, and most manufacturers don’t want to do that. They want protection; they want baby steps; they want special corridors. They won’t get that.”

Consequently, the first law of the robocar revolution, according to Templeton, is that “you don’t change the infrastructure.” Whatever functionality is needed to drive safely should be on board each individual vehicle. “Just tell the software people that this is the road you have to drive on, and let them figure it out,” Templeton says. “Everything you must do is in the software, or you lose.” Some self-driving shuttles confined to specific areas—airports, pedestrian malls, colleges campuses—will be deployed, but they are not the future of this technology.

Another infrastructure mistake would be mandating the deployment of “smart roadside infrastructure,” such as traffic lights and sensors to monitor conditions like icing on bridges and communicate the information via radio to autonomous cars. In 2015, Sens. Debbie Stabenow (D, MI), Gary Peters (D, MI), and Lamar Alexander (R-TN) embraced this idea when they introduced the Vehicle Innovation Act, which included spending more than $300 million on various favored tech, including vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communications systems.

Before embracing such external information systems, keep in mind that the U.S. DOT estimated in 2007 that 75% of the nation’s 330,000 traffic lights are mistimed or use obsolete control systems. “If city and county street and road agencies can’t keep traffic signals up-to-date, how long would it take them to install and upgrade smart road systems?” Randal O’Toole asked in a 2014 Cato Institute study, “Policy Implications of Autonomous Vehicles.” It’s all most states and cities can do to fix potholes, much less deploy and maintain sophisticated networks of roadway sensors.

Other regulators and politicians want to require automobiles to be equipped with V2V communications tech using dedicated short-range communications (DSRC) protocols. The idea is that cars could talk to one another to provide warnings of traffic jams, accidents ahead, or vehicles in front that are braking. They might even cooperate with one another to get through intersections. A good bit of the Obama Administration’s promised $4 billion for autonomous vehicles would be earmarked forV2V research and development.

“DSRC is already obsolete,” argues Kockelman. “Regulators simply can’t write down a communications standard that will be useful for a long time.” Templeton agrees. “People outside the industry think it’s essential, and the car companies are just going along with it to keep them happy,” he says. “It’s something designed in 2000 [that] wouldn’t be fully deployed until 2030 or later.” The bottom line: “Mandating V2V connectivity is stupid and a waste of time.”

Templeton cites the internet as a model for how to roll out the technologies that enable self-driving cars. “The internet is a dumb network that connects smart devices,” he explains. “You want smart cars running on stupid roads.” Dumb networks push innovation to the edge, giving end-users control over the speed and direction of change.

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Zero Emission Trucks Getting Closer to Reality

Last month’s News Note about a new California regulation aimed at replacing all truck diesel engines in the state with zero-emission trucks by 2050 quoted skeptical comments from two trucking associations. But my recent research has found significant technological progress that makes that goal sound not so fanciful.

First, Fleet Owner reported last month that four truck makers will share a $23.6 million state grant administered by the South Coast Air Quality Management District to produce 43 prototype heavy truck tractors to be tested in drayage service at the ports of Los Angeles and Long Beach. Kenworth, Peterbilt, Volvo, and BYD will build the trucks. But how are they going to get emissions down to very low or zero levels?

Some truck builders are focusing on compressed natural gas, and apparently making considerable progress. Engine maker Cummins announced last fall an 8.9-liter engine that produces just .02 grams per brake horsepower-hour of NOx; it has 6.7-liter and 11.9-liter engines with similar performance metrics. Consultant Erik Neandross told an October conference that “this is equivalent to [the emission level] of a completely electric tractor-trailer—even if one existed that could haul 80,000 lbs. up and down the highway.

Peterbilt has been working for several years with Walmart on a hybrid heavy truck, mating a microturbine with electric motors. Called WAVE (Walmart Advanced Vehicle Experience), the hybrid drive train allows the gas turbine to operate at optimum RPM, while the electric motors and energy storage system provide for acceleration and deceleration. A longer-range version of this prototype would use a larger turbine and a smaller energy storage system. Kenworth is working on a similar concept vehicle.

The most glamorous hybrid truck proposal comes from start-up company Nikola Motors (yes, that was Tesla’s first name). It is developing the prototype of a gas turbine/electric hybrid big-rig—Nikola One— to be priced at $375K, but leasable for $5K/month including maintenance and fuel (CNG). The fuel will drive a 400 KW turbine linked to a 320 KWH battery pack to drive electric motors at the wheels. With a 100-gallon tank, the estimated range is 1,200 miles. Nikola Motors announced on June 13th that it has amassed 7,000 deposits of $1,500, generating a bit over $10 million, and says it will display the prototype on December 2 in Salt Lake City.

As you can see, none of these is truly a zero-emission truck. But all would appear to have much lower emissions and better fuel economy than today’s diesel big-rigs. And there are still 34 years to go before 2050.

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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.

ARTBA P3 Conference, July 13-15, 2016, Washington Court Hotel, Washington, DC (Robert Poole speaking). Details at: www.artbap3.org

Florida Transportation Commission and Floridians for Better Transportation Summit, July 18-20, Loew’s Don Cesar Hotel, St. Pete Beach, FL (Robert Poole speaking). Details at: www.bettertransportation.org/2016Summit.html

Automated Vehicles Symposium, July 19-21, 2016, Hilton Union Square, San Francisco, CA (Baruch Feigenbaum speaking). Details at: www.automatedvehiclessymposium.org/home

IBTTA Summit on AET, Managed Lanes & Interoperability, July 24-26, 2016, Boston Marriott Copley Plaza, Boston, MA (Robert Poole speaking). Details at: www.ibtta.org/events/summit-aet-managed-lanes-interoperability

Florida League of Cities Annual Conference, August 18-20, 2016, Diplomat Resort, Hollywood, FL (Robert Poole speaking). Details at: www.floridaleagueofcities.com

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News Notes

Another All-Time High for VMT. The latest Traffic Volume Trends report from FHWA shows that miles driven in April totaled 272.8 billion, up 2.6% from the same month last year, continuing a trend that is now several years old. Cumulative travel in the first four months of 2016 was up 3.7% over the first four months of 2015. How much of this will it take before PIRG and other anti-highway folks acknowledge that the historical uptrend in VMT has resumed?

Cities and Autonomous Vehicles. The National Association of City Transportation Officials (NACTO) last month released a policy statement making some rather strange and arbitrary recommendations—such as that AVs be limited to 25 mph on all city streets, despite many arterials being posted at 40 or 45 mph, and requiring AVs to share data about where their owners are traveling. Randal O’Toole takes NACTO to task in a recent “Antiplanner” blog post, “Ignorance and Bias About Self-Driving Cars.” (http://ti.org/antiplanner/?p=12013#more-12013)

“Atlanta Streetcar May Be the Worst Transportation Project Ever Built”. My Reason colleague Baruch Feigenbaum was not joking when he titled this four-part blog; you’ll have to read it yourself to judge how good his case is. What Atlanta’s project exemplifies is that “modern streetcars” are not transportation in any meaningful sense; if anything, they are economic development projects, and questionable ones, at that. (http://reason.org/blog/show/troubled-atlanta-streetcar-may-be-t)

The Link Between Transportation and the Economy. The Transportation Research Board has released an important new report that zeros in on how good transportation system performance makes an economy more productive. This is not due to the construction jobs created by each project; rather, it’s that better mobility enables people and goods to get to where they can maximize value. Assessing Productivity Impacts of Transportation Investments is NCHRP Report 786, available via the TRB website.

Hyperloop Company Making Progress. Hyperloop One (formerly known as Hyperloop Technologies) has raised $80 million in venture capital (including from GE Ventures and Khosla Ventures) and plans a full-scale test of its system in the fourth quarter of this year. It has also signed on as partners a number of firms, including AECOM, Amberg Group, ARUP, Deutsche Bahn, and KPMG. And it has announced a competition for cities, regions, or countries to offer themselves as test-beds for a commercial system. On July 5th it announced results of a design study, which estimated a cost per mile of 38 million Euros/km (which compares to the estimated 100 million Euros/km for the planned UK high-speed rail line from London to Birmingham).

California Commuters View Congestion as Major Problem. A new survey by the Public Policy Institute of California finds, not surprisingly, that residents of major metro areas in the Golden State consider traffic congestion as a major problem—though slightly less so than 10 years ago. Except in the San Francisco Bay Area, large majorities commute to work by driving alone (in the Bay Area only 52% do, according to the survey). In terms of spending priorities, majorities in the Central Valley, Orange County, San Diego and the Inland Empire favor highways, while majorities in the Los Angeles and San Francisco areas say they prefer transit.

Suez Canal Cuts Tolls to Stay Competitive. Two market forces have led the Suez Canal to cut its toll rates for cargo ships this year. First, the low cost of bunker fuel has led many Asia-to-Europe ships to take the long route around the Cape of Good Hope, rather than the shorter route via the Canal. Second, the opening of the enlarged Panama Canal means larger ships from Asia to the U.S. east coast can use that canal, rather than Suez. Most east coast ports that have invested in deeper channels and larger cranes are still waiting to see how much new trade they will attract now that the new Panama locks are open.

Highway 407 East Opens in Ontario. A 22 km eastward extension of Highway 407 ETR opened to traffic last month. Between now and the end of the year it will operate without tolls, but electronic tolling will begin as of the first of 2017. A second phase, extending the tollway further east, is under way and will be finished by 2020, at a cost of $1.2 billion. The original 407 ETR was privatized via a 99-year concession; 407 East is owned and operated by the province of Ontario.

When Would Electric Vehicles Not Need Subsidies? MIT Technology Review posed this question to MIT energy economist Christopher Knittel recently. In its May/June 2016 issue, Knittel provides his answer. Even though the price of batteries has declined somewhat, the price of oil would have to exceed $350 per barrel to make an unsubsidized electric car competitive with a conventionally fueled car. That is why a number of experts favor spending tax money not on subsidizing the purchase of Teslas but on basic R&D to develop much more economical batteries.

I-69 Bridge Across Ohio River Moving Forward. As I-69 continues to be constructed in Indiana and Kentucky, proponents eagerly awaited a June 30th news conference by Indiana Gov. Mike Pence and Kentucky Gov. Matt Bevin about the planned $850 million bridge linking the two states across the Ohio River. The governors announced that the project will move forward expeditiously. Originally expected to cost $1.2 billion, work to streamline the project has reduced its projected cost. And funding is now expected to come from tolls and federal grants, with a public-private partnership (P3) also to be considered (as Indiana has used for its East End toll bridge near Louisville).

Cape Cod P3 Bridge Shelved. Public Works Financing reported last month that the Massachusetts DOT has shelved development of a third bridge linking Cape Cod to the state’s mainland. The project had been on a list of potential transportation P3 projects. Apparently still on the list is an express toll lanes project on one of the expressways approaching Boston from the south.

Do High-Speed Rail Lines Need Operating Subsidies? A large body of transportation research has found that nearly all the world’s high-speed rail lines require operating subsidies from taxpayers in order to offer fares competitive with driving or flying. So it was not surprising that Spanish firm Ferrovial included this information in a proposal it submitted to the California High Speed Rail Authority. But when CHSRA posted the document on its website, that finding was omitted. Los Angeles Times reporter Ralph Vartabedian obtained the unexpurgated version via a Freedom of Information Act request. So he was able to compare that finding with the untruthful assertion of CHSRA Chairman Dan Richards, in legislative testimony, that “Actually all of them, virtually all of them, make an operating profit.” The story appeared in the Times on June 20th.

Northwest Parkway Up for Auction. Portuguese toll road company BRISA has put up for sale the remaining 90 years of its concession to operate and maintain the toll road that forms the northwestern portion of the Denver beltway. The tollway links E-470’s northern terminus with US 36. Though not yet profitable, traffic on the highway has been growing, increasing by 13% in 2015. BRISA paid $603 million for the concession in 2007.

UPA/CRD Final Evaluation Published. In 2007 and 2008, the U.S. DOT held two competitions for urban areas to implement various forms of transportation pricing, under the Urban Partnership Agreement and Congestion Reduction Demonstration programs. The six winning projects included four HOT lane implementations, one toll-financed bridge replacement, and variable parking pricing in Los Angeles and San Francisco. DOT last August released a 50-page summary of the results from the more detailed evaluations of each of these projects. Contemporary Approaches in Congestion Pricing: Lessons Learned from the National Evaluation of Congestion Pricing Strategies at Six Sites, August 2015, is FHWA-JPO-2015-217.

New I-87 to Connect Norfolk and Raleigh. Last month saw the official announcement of a new Interstate highway, 213 miles long, connecting Virginia’s Hampton Roads ports with the Research Triangle metro area of North Carolina. Much of the route would follow the current U.S. 17 and U.S. 64, which would be upgraded to Interstate standards, including construction of interchanges and bridges. At an estimated cost of $1 billion, the new highway could take as long as two decades to develop. Unless, of course, toll financing were to be used.

Bipartisan Support for P3 Infrastructure. A broad approach to making greater use of public-private partnerships for U.S. infrastructure was released by the Bipartisan Policy Center in May. “Bridging the Gap Together: A New Model to Modernize U.S. Infrastructure,” was developed by a nine-member Executive Council on Infrastructure, including former FHWA and FAA Administrator Jane Garvey and former House Majority Leader Eric Cantor. After making the case for expanded use of P3s, the report calls for user fees as the primary revenue source and for consolidating federal credit programs for P3 infrastructure.

Port Authority Opts for All-Electronic Tolling. In a landmark decision on June 29th, the Port Authority of New York & New Jersey voted to invest $170 million to replace its entire existing toll collection system, joining the nationwide trend toward lower-cost all-electronic tolling. The first toll booths to be eliminated will be on the rebuilt Bayonne Bridge, when it re-opens in 2017.

“In Praise of Urban Sprawl”. That’s the provocative title of a book review in the Wall Street Journal, May 21, 2016. The book is the new volume by NewGeography.com’s Joel Kotkin, The Human City. Shlomo Angel of NYU’s Marron Institute offers thoughtful commentary on Kotkin’s defense of suburbia, at a time when most urban planners continue to regard it as “sprawl” and therefore a blot on the landscape. But he also offers some cautions about whether Kotkin’s defense applies equally to the mega-cities of the developing world.

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Quotable Quotes

“Slowdowns and bottlenecks can reduce the effective size of the labor markets from which businesses can draw workers, and can reduce the range of suppliers and customers for businesses. When this happens, some businesses move from centralized distribution facilities to establish satellite centers. Consequently, the unit cost of production goes up, and the competitiveness of operating in these locations goes down, with negative effects on jobs and pay rates.”
—Glen Weisbrod, “The Connection Between Transportation Performance and the Economy,” TR News, January-February 2016

“Gaining a car between 1994 and 2000/2001 and maintaining access to a car at both time periods are positively and strongly correlated with finding employment and being employed [for Moving to Opportunity people]. The presence of a car raises the probability of finding a job by a factor of two, and of being employed at both time periods by a factor of four. . . . Policies to increase car access among low-income households will most clearly enhance job gain and retention even in large metropolitan areas, such as the MTO study areas, and in dense neighborhoods where public housing is located.”
—Evelyn Blumenberg and Gregory Pierce, “A Driving Factor in Moving to Opportunity,” Access, Number 48, Spring 2016

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Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation.