Surface Transportation News #155
ID 23148358 © Joe Sohm | Dreamstime.com

Surface Transportation Innovations Newsletter

Surface Transportation News #155

Critics bash tolling and P3 concessions and how can Amtrak repay a $2.45 billion loan?

In this issue:

Toll Road Reorganization Unleashes Critics of Tolling and Concessions

Back in March the portion of the Texas SH 130 toll road that was developed as a public-private partnership (P3) concession filed for bankruptcy, since toll revenue had not recovered enough post-recession to cover its debt service. And last month, the SH 130 Concession Company filed a bankruptcy plan in federal court, transferring ownership to its major lenders. These events have triggered a number of responses, some based on limited knowledge of toll concessions and others by ardent opponents of tolling, per se.

In the first category was a piece in industry journal Engineering News-Record, “When Toll-Road Flows Fall Short.” While acknowledging that the Texas toll road opened during the Great Recession, it added that “SH 130’s disappointing traffic and revenue performance is consistent with other toll projects that have involved private financing.” In evidence, it cited only Virginia’s Pocahontas Parkway, along with several bankruptcy filings in Australia. But that was hardly a balanced portrayal of the outcome of recent U.S. toll projects.

Far worse was an Aug. 23rd piece in a toll-hating online publication called TheNewspaper.com. Its article on the SH 130 filing claimed that “Nearly every high-profile tolling project has failed,” citing the Indiana Toll Road, California’s 91 Express Lanes, San Diego’s South Bay Expressway, and the three toll roads of the Transportation Corridor Agencies (TCA) in Orange County, CA. As almost everyone realizes, the 91 Express Lanes are an economic and financial success, never went bankrupt, and were purchased by the Orange County Transportation Authority only to get around an overly restrictive non-compete clause (the likes of which nobody is doing any more). As for the TCA toll roads, they never went bankrupt, were refinanced successfully, and have had solid increases in traffic and revenue post-recession.

There have been several bankruptcy filings by P3 toll projects in this country, but those projects all share several characteristics. First, they were financed based on traffic forecasts made prior to the Great Recession, which failed to account for the impact on traffic and revenue of a severe recession. Second, there were no taxpayer bailouts of any of them. Each was financed via revenue bonds and loans plus developer equity investments, with only the investors at risk of losses, not taxpayers. Third, the equity providers in each case lost their initial investments, which as sophisticated investors they knew up-front was a possibility.

As for the claim that “nearly every high-profile tolling project has failed,” that is easily shown to be false. First, there has not been a single failure of an express toll lanes project—whether financed by the private sector or by a state DOT. In fact, a number of these projects are having to raise their peak-period tolls above the levels in their traffic and revenue forecasts in order to maintain the uncongested traffic flow promised to their customers. Among those in the news recently are the I-95 Express lanes in Miami, the I-85 Express lanes in Atlanta, the I-110 Express lanes in Los Angeles, and the I-405 Express Lanes in Seattle. Pew Charitable Trusts’ Stateline carried a good article on this phenomenon this week, “Express Lanes Have a Popularity Problem.”

Another piece of evidence is the market to acquire investor-financed toll roads. To be sure, nobody bid for the failed Pocahontas Parkway in Virginia or the Southern Connector in South Carolina, but those were projects for which enough demand really was not there to cover their capital and operating costs. By contrast, both the bankrupt Indiana Toll Road and the struggling Chicago Skyway have such good long-term fundamentals that both concessions were bought last year by consortia of pension funds for significantly more than the original concession deals—$5.7 billion for ITR and $3.8 billion for the Skyway. Even the sometimes-troubled Dulles Greenway in Virginia seems to be prospering as of 2016, to the point that 50% owner Macquarie Atlas Roads is seeking to purchase the other 50%.

So when anti-toll groups such as the Alliance for Toll-Free Interstates make claims such as “toll roads have a track record of failure,” don’t take their word for it. Instead of listening to what interest groups say, watch what investors do.

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How Can Amtrak Repay a $2.45 Billion RRIF Loan?

On August 26th, Vice President Joe Biden announced that the Federal Railroad Administration was issuing a $2.45 billion loan to Amtrak, so that the government-owned passenger railroad can by 28 new Acela trainsets with a slightly higher top speed and about 40% more capacity for Northeast Corridor service.

In his announcement, Amtrak-loving Biden said that the loan “should be a gift. . . Why in this country are we so bone-headed to not understand the essential value of a rail system that’s modern throughout the whole country?” Unfortunately for American taxpayers, the loan will almost certainly end up as a gift, since Amtrak has no conceivable way to repay it.

The loan comes from a program called Railroad Rehabilitation & Improvement Financing, administered by FRA. RRIF was enacted by Congress in 1998, as part of the TEA-21 surface transportation reauthorization bill. Congress authorized it to loan up to $35 billion, but since it started making loans in 2002, it has used only $5.15 billion of its authorized total. Most of these have gone to short-line freight railroads, and a few have already been repaid. Before now, Amtrak has received two much-smaller loans, $100 million in 2002 and $563 million for new locomotives in 2011.

RRIF is often analogized to the TIFIA program administered by FHWA. But the differences are stark. First, while TIFIA can make loans for up to 49% of a project’s total cost (and in practice generally limits loans to 33%), RRIF loans can be for up to 100% of a project’s cost. Second, until very recently, there was no requirement that the project or the recipient have an investment-grade credit rating. The most recent Amtrak bill did add a requirement for an investment-grade rating on the financing of RRIF projects.

But regardless of any alleged taxpayer protections on paper, how can a government corporation whose revenues from customers cover only about half its annual capital and operating costs ever repay a $2.45 billion loan? The only way I can see for Amtrak to avoid defaulting on this loan is to persuade Congress to increase its annual subsidy. That might work once to cover annual debt service on this loan. But many in Congress have talked about requiring RRIF to “invest” 40% of its future loans in the Northeast Corridor—which would go mostly to Amtrak.

It turns out Biden was more correct than most people realized. De-facto, the $2.45 billion RRIF loan will actually turn out to be a gift, paid for once again by hapless American taxpayers.

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Mileage-Based User Fee Pilot Projects in More States

The evidence is mounting that per-gallon fuel taxes are not going to be the 21st century’s primary source of highway funding. Data from the federal Energy Information Administration recently showed that vehicle miles of travel are increasing at a 3% annual rate, while the amount of gasoline sold is increasing at only 2% per year. In July, highway finance expert Ed Regan of CDM Smith gave a presentation in Boston on his detailed projection of federal and state motor fuel tax revenue through 2040. By that year, revenues will be $40 billion per year less than today—which is about half of all current federal spending on roads and highways.

In light of these trends, I’m encouraged that a growing number of states are conducting pilot tests of possible mileage-based user fee (MBUF) systems. In last year’s FAST Act, Congress provided modest grant funding for such pilots for five years, and the first year’s winners were announced on August 30th. The winners are as follows:

  • Hawaii DOT will develop and test a user fee collection system based on manual and automated odometer readings at inspection stations.
  • Washington State DOT will conduct a statewide test of four alternative ways to collect mileage charges, including an annual fee for unlimited miles, an odometer-based charge at annual licensing, a GPS option, and a smartphone app.
  • Oregon DOT will add new features to its ongoing OReGO pilot, including a manual no-technology option.
  • California will add to its recently launched pilot program a pay-at-the-pump option.
  • The RUC West consortium of western states will focus on interoperability among state MBUF programs (so that people will be charged separately for the miles they drive in each state).
  • Four member-state DOTs of the I-95 Corridor Coalition will conduct a joint pilot in their respective states (CT, DE, NH, PA—although there is legislative opposition in CT).
  • Minnesota DOT will study mobility as a service in the context of a mileage-fee environment.

Two key issues will get attention in all these pilot projects: privacy and urban/rural fairness. Existing and previous pilots have wisely tested several different methods of payment, rather than relying only on methods such as GPS that many people see as privacy-invading. And there is growing evidence that rural drivers—who often use low-mpg vehicles like large pickup trucks—might be made better off in a shift to paying by mile rather than per gallon. Janet Ray of AAA Washington told TheLens.news that, through the existing per-gallon gas tax, there is arguably a mileage tax already. She continued that the problem is that it favors drivers of high-mpg cars at the expense of those who drive the low-mpg workhorse vehicles common in rural areas.

My Reason Foundation colleague Adrian Moore had a good op-ed in the Orange County Register recently, explaining to Californians why that state’s new MBUF pilot project is a worthwhile endeavor. (http://reason.org/news/show/testing-a-better-way-to-pay-for-roa)

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Future of the Interstates Study Under Way

The Transportation Research Board last week formally kicked off a several-year study of the future of America’s Interstate highway system. In the FAST Act, Congress authorized $5 million for the study to figure out how this vital infrastructure should be upgraded and restored for the 21st century. TRB is in charge of the project, and has selected a blue-ribbon committee to oversee the work. Chaired by Norman Augustine (former CEO of Lockheed Martin), its 14 members include former DOT Secretary Norm Mineta, Metropolitan Transportation Commission Executive Director Steve Heminger, University of Southern California researcher Genevieve Giuliano, University of Texas researcher Michael Walton, and Michigan DOT Director Kirk Steudle. The Committee held its first meeting last week, at the National Academy of Sciences in Washington, DC.

There are five priorities for the study, as follows:

  1. Identify reconstruction priorities for the next 50 years, based on the current conditions of individual Interstates and their rates of deterioration.
  2. Project future demand for the system, both freight and passenger.
  3. Integrate new technological capabilities, to increase both safety and efficiency.
  4. Propose current major highways (on the National Highway System) that make sense to upgrade to Interstate status.
  5. Identify the required resources for reconstruction, expansion, and ongoing maintenance.

This study is long overdue, and should have been launched prior to the system’s 50th anniversary a decade ago. But at least it is now under way. While all five priorities are important, I’d like to offer a few comments on several of them. Since my own research that produced the 2013 Reason Foundation study “Interstate 2.0,” I have kept an eye out for proposed new Interstate corridors. As part of that exercise, I compiled data on large cities that have grown the most or shrunk the most between 1950 and 2008. Top of the list were Las Vegas (over 21 times more people than in 1950) and Phoenix (14 times more). Yet because the map of what became the Interstate system was drawn up during World War II, those two cities were almost afterthoughts—and there is still no Interstate route between them. Other high-growth cities include Tucson (11 times), San Jose (9 times), Austin (5 times), and Albuquerque and Charlotte (both 4 times larger). Yet a number of the new Interstate routes proposed by members of Congress and local boosters in recent years connect much smaller places. I hope the Committee and its consultants develop a rigorous methodology for assessing benefits versus costs for such new corridors.

Automated and connected vehicles will certainly have an impact on the demand for Interstate capacity in coming decades. One of the most promising developments is likely to be truck platooning, especially in corridors with high and increasing heavy truck movements. FHWA’s Freight Analysis Framework several years ago projected which specific Interstate corridors would reach 40% of their traffic as trucks in the decades between 2020 and 2040. Reason’s 2015 policy study “Truck-Friendly Tolling for 21st Century Interstates” drew on that research to propose dedicated truck lanes in 11 major corridors, seven of which are multi-state corridors. Such dedicated lanes would be the best setting for truck platooning—and given how long it takes to get major highway projects implemented, planning needs to start now to be ready for the time truck platooning is ready for large-scale implementation.

Finally, the question of the resources needed for reconstruction and modernization is perhaps the most important outcome to be expected from this study. It is very clear that with current fuel taxes not generating enough revenue to even properly maintain current highway capacity, there is no identified funding source for the $1-2 trillion set of mega-projects that will constitute a 21st century Interstate system. Such a program cannot and will not be fundable out of annual cash flow. It is a need tailor-made for long-term user-fee financing. And it would also be a good fit for procurement as a large set of P3 concession megaprojects, shifting the typical megaproject risks to investors, rather than saddling taxpayers with those risks.

For reference:

“Interstate 2.0: Modernizing the Interstate Highway System via Toll Finance,” September 2013. http://reason.org/files/modernizing_interstates_toll_finance.pdf

“Truck-Friendly Tolls for 21st Century Interstates,” July 2015. http://reason.org/files/interstate_tolling_trucking_industry.pdf

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The Impact of Car-Sharing on Vehicle Ownership

A provocative article from CityLab crossed my screen in July: “Here’s How Many Cars This Car-Sharing Service Killed?” by Laura Bliss. It summarized a study by Elliot Martin and Susan Shaheen of the Transportation Sustainability Research Center at UC Berkeley. The headline numbers were that customers of car-sharing service Car2go sold between one and three vehicles for every Car2go vehicle in their city. And they avoided buying between four and nine vehicles for every Car2go vehicle. Those sounded like amazing numbers.

So naturally I downloaded their paper, “Impacts of Car2Go on Vehicle Ownership, Modal Shift, Vehicle Miles Traveled, and Greenhouse Gas Emissions.” Martin and Shaheen analyzed data from five North American cities (Calgary, San Diego, Seattle, Vancouver, and Washington, DC) where Car2Go has significant operations. The company offers one-way rentals within a service zone that covers most or all of the incorporated city limits. Martin and Shaheen surveyed a large sample of customers in each location, and seem to have been conservative in not over-estimating impacts on vehicle ownership.

When I had trouble following their calculations, Martin was helpful in walking me through how the numbers worked, which revealed that several key quantities (e.g., the Car2go membership in each city, and the Car2go fleet size) were not included in the paper. With these data in hand, I was able to replicate their calculation procedure, as this example from Calgary demonstrates:

Membership in Car2go 68,000
Sample surveyed 1,246
Fraction that sold a vehicle 2%
Extrapolation to all members 1,360 vehicles sold (2% of 68,000)
Car2go fleet size 574
Ratio of sold/fleet size 2.4 vehicles sold per Car2go vehicle in fleet

It’s important to note that the vast majority of Car2go members did not sell an existing vehicle or decide not to purchase one during the year in question. Still, from a transportation policy perspective, the implication of the Citylab headline is that if car-sharing were much larger, a great many more people would reduce their vehicle ownership. There are several reasons to take this implication with a few grains of salt.

First, the sample size reflects people who live within the Car2go zone in each of the cities studied; that’s a lot fewer than the number who live in the overall metro area, including suburbs and exurbs. Secondly, those who join Car2go (and other services such as Zipcar) are self-selected and are probably more likely to walk, bike, and use transit than the average metro area resident.

The study also includes no information about the demographics of Car2go members. Back in March, the American Public Transportation Association (APTA) and the Shared-Use Mobility Center (SUMC) held a briefing in Washington, DC on their new study on transit and shared-use mobility. Eno Transportation Weekly editor Jeff Davis cited a Wired article about that study which noted that those surveyed “had an average household income of $90,926, 70% more than the U.S. median of $53,657.” It’s not at all clear, he wrote, that the findings from this population are transferable to lower-income and unbanked communities.

In short, while the Martin/Shaheen Car2go results appear to be valid for the populations studied, be careful about extrapolating them to larger populations and geographies.

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Highlights of the 2016 TRB Automated Vehicles Conference
By Baruch Feigenbaum

In late July, the Transportation Research Board (TRB) and the Association for Unmanned Vehicle Systems International (AUVSI) organized the 5th Annual Automated Vehicles Summit in San Francisco. This year’s meeting was the largest yet with almost 1,200 attendees.

The summit’s focus has broadened considerably to include not just technical but policy, legal and economic topics. This is vital because the technological issues will be solved—eventually. But the policy issues—including government regulation, insurance requirements, and expected changes in driver behavior—are messier problems. And DOTs, toll road operators, and transit agencies want to know how autonomous vehicles (AVs) may affect their plans.

The biggest change at this year’s conference was the National Highway Traffic Safety Administration’s (NHTSA) approach to regulation. In the past NHTSA suggested that it would pass specific guidelines in the areas of insurance requirements, vehicle testing and passenger usage. NHTSA advised states to hold off until the federal government made policy (which was odd since states are the ones that make roadway laws).

This year NHTSA is singing a different tune. In fact, the agency’s approach is akin to switching from Country music to R&B. Gone is the precautionary principle. In its place is a recommendation for states and other federal agencies to make new laws only when needed. For example, most states’ insurance coverage and vehicle testing requirements are adequate for automated vehicles. The type of law that needs to be changed is Texas’ drunk-driving statute. In Texas, anybody in a car driver’s seat with a blood alcohol level at .08 or above is intoxicated and can be arrested (regardless of whether the motor is running or if the car is in a garage). AVs can significantly decrease drunk driving, but under current law certain Texans would not be able to use them.

Commercial vehicles are expected to be earlier adopters of autonomy due to the large savings in wages and some savings in fuel. The biggest challenge is public acceptance of a driverless truck traveling on a freeway. Several sessions discussed early adoption possibilities for trucks. One examined tests of partially automated vehicles platooning and their success in merging and navigating traffic intersections at autonomy levels 1-2 (on the Society of Automotive Engineers 0-5 scale). The researchers found that these partial AVs perform similarly to human drivers. But they also found that conventional traffic signals were more efficient than an automated system. So the goal of eliminating traffic signals in cities may be just a dream.

The policy break-out sessions provided interactive and high-level discussions. For example, at the very well-attended policy session, speakers discussed the importance of avoiding a patchwork of legislation, the use/safeguards of big data generated by AVs (still developing and not adequate), and the challenge of modeling future travel behavior (VMT will likely increase but it’s impossible determine how much).

Two plenary sessions were particularly noteworthy. First, the Ethics of AVs session cut through the usual superficial questions to consider the following: Should the system direct drivers to cut through a residential neighborhood if it reduces trip time by 30 seconds? Could a car be programmed to drive past certain advertisers? What privacy expectations will users of automated/connected vehicles have to give up?

Second, Joan Walker of UC Berkeley gave an interesting, well-sourced presentation on vehicle miles traveled (VMT). She predicts a very large increase in VMT per capita— potentially 90%. Walker believes that incentives such as pricing could significantly reduce that number. Others have forecast more-moderate increases, and a few predict a decrease. To say there is a lot of uncertainty would be an understatement.

Unfortunately, one session was particularly poor. In detailing the city of tomorrow, Gabe Klein showed the audience a lot of pretty pictures and made some interesting claims such as (a) transit-oriented development is the only development worth considering, (b) car infrastructure is four times more expensive than transit infrastructure, (c) narrowing streets from six lanes to two lanes is a good idea, and (d) cars produce 80% of greenhouse gases. Providing accurate facts was not Klein’s focus, which was particularly jarring after Walker’s well-footnoted presentation. I don’t believe factually questionable presentations belong at a National Academy of Sciences meeting.

Several speakers also made questionable assumptions about the future. The potential synergy among ride sharing, transit, and urban revitalization is one of the emerging areas in transportation. But forecasted significant declines in car ownership ignore several cultural factors. Car ownership is ingrained in the mindset of many Americans. This may change over time, but it won’t happen overnight. Additionally, stay-at-home moms and those who travel frequently for work will still want their own vehicles.

Finally, the never-ending hype from some in the AV world continues. Many companies such as GM and Lyft will make or offer self-driving vehicles with level 1 and level 2 (and possibly level 3) features in the next few years. And others may have cars with higher automation levels in limited settings such as campuses. However, consumers need to understand that these are not level 5 robo-taxis, and such vehicles are still many years away.

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News Notes

Bad Roads Cost Californians $53.6 Billion per Year. The Road Information Program (TRIP) last month released a new report, quantifying the impact of bad roads on California motorists. Of the total $28 billion is the cost of congestion, $18.3 billion is due to poor-to-mediocre pavement causing vehicle damage and increased operating costs, and the balance is from increased accidents due to the other two causes. Actually, the bad-pavement effects in major California cities are slightly less than in TRIP’s mid-2015 national report, which represents at least a bit of progress in working down the maintenance backlog. The report is “California Transportation by the Numbers,” and is available at tripnet.org.

$3 Billion P3 Bridge Opened in Istanbul. The world’s largest suspension bridge, the Yavuz Sultan Selim Bridge, opened as the third crossing of the Bosphorus on Aug. 26th. The $3 billion bridge provides for eight traffic lanes and two rail lines. The bridge is part of the North Marmara Highway project, which will total 257 km once it is completed in 2018. The bridge was procured via a long-term public-private partnership (P3) concession agreement.

Private Truck Toll Bridge Approved in Illinois. CenterPoint Properties has received approval to build and operate a two-lane toll bridge over the Des Plaines River and the BNSF Railroad’s tracks. It will connect I-80 to CenterPoint’s 6,500-acre Intermodal Center in Joliet, IL. CenterPoint will issue up to $170 million in toll-based financing to develop the project. Illinois DOT will modify the interchange at I-80 to handle the increased truck traffic.

Critique of Over-Budget Honolulu Rail Project. What can you do with an elevated rail transit project that is only half-built and already far over budget? According to two local academics and a local business leader, the least-bad option is to convert the guideway into dedicated lanes for a Bus Rapid Transit (BRT) system that could continue travel on the surface to the originally planned destinations. The op-ed was authored by University of Hawaii engineering professor Panos Prevedouros, UH law professor Randall Roth, and Honolulu business leader Cliff Slater. (http://reason.org/news/show/the-case-for-stopping-honolulu-rail)

Vinci Buys Peru Toll Road for $1.7 Billion. French infrastructure concession company Vinci has reached agreement with Brazil’s Investimentos & Participacoes em Infrastructura, SE to acquire the remaining 33 years of the latter’s concession for the 15-mile Lamsac toll road linking suburbs of Lima to downtown and its international airport. Average daily traffic last year was 134,000 per day.

Last Section of Santiago Ring Road Out to Bid. Chile’s Public Works Ministry in July put out to bid a P3 concession to finance, develop, and operate the 5.2 km tunnel that will complete the 77 km Vespucio ring road. The concession for the $800 million project will be for 40 years. Public Works Financing reports that expected bidders include Iridium/ACS, Cintra/Ferrovial, Acciona, and OHL-Sacyr—all major international firms.

Will Autonomous Vehicles Kill Transit-Oriented Development? Bill Conerly advances this thesis in a recent Forbes.com piece. His argument is that “self-driving cars will eliminate premium pricing for housing units located near rapid transit stops.” In addition, he suggests that urban land values will decrease if large amounts of real estate become available for development as many parking facilities are made redundant by self-driving robo-taxis. Increases in land supply, other things equal, will reduce land prices. (“Self-Driving Cars Will Kill Transit-Oriented Development,” by Bill Conerly, Forbes.com, Aug. 8, 2016)

Revenue-Neutral Carbon Tax Endorsed by California Legislature. Many economists favor a pure carbon tax as the least-bad way for government to encourage the shift to a lower-carbon energy system. But if such a tax adds to what many see as an already-high tax burden, its prospects are poor. Hence, several proposals have been made in recent years for enacting a carbon tax, but giving the revenues back to the population in some manner. On Aug. 23, 2016 the California Senate passed AJR 43, a joint resolution calling on Congress to tax carbon emissions from fossil fuels but send the revenue back to middle- and low-income households. The measure had passed the Assembly on June 30th.

Paying Illinois Tolls via Cellphone. New-entrant toll payment company FastToll has reached an agreement under which the Illinois Tollway will accept toll payments made via the company’s smartphone app, also called FastToll. Currently, it can be used on all the Illinois Tollway’s toll roads; the only major toll facility not currently accepting FastToll is the Chicago Skyway, which is operated by a P3 concession company. FastToll hopes to expand its service to other states.

Billion-Dollar Tolled Slovakia Motorway. A Cintra/Macquarie team won the bidding to develop and operate the 4-lane, 27 km D4 motorway, forming a portion of the ring road around Bratislava. The $1.1 billion project is being financed as a 30-year, availability-payment concession in which the government will collect the toll revenues. The concession also includes construction and operation of a 32 km non-tolled highway R7 linking Bratislava with eastern Slovakia.

Will Consumers Pay More for Automated Vehicles? Resources for the Future has released a discussion paper, “Are Consumers Willing to Pay to Let Cars Drive for Them? Analyzing Responses to Autonomous Vehicles.” Ricardo Daziano and two co-authors carried out a 1,200-person online discrete-choice experiment with a focus on autonomous vehicles. On average, households indicated willingness to pay $3,500 for partial automation and $4,900 for full automation. However, many are not willing to pay anything. Overall, the participants “split approximately equally between high, modest, and no demand” for autonomous vehicles.

Bus Innovations Covered in TRB Magazine. The May-June 2016 issue of TR News, published by the Transportation Research Board, has a focus on recent bus-related developments. Feature articles include the recent boom in intercity bus transportation (Victoria Perk and Dennis Hinebaugh), an overview of Bus Rapid Transit in the United States (Jennifer Flynn), and “Bus Rapid Transit Works: Countering the Myths” (Samuel Zimmerman and Herbert Levinson). If you have not been following these developments, this is a good way to catch up

Britain’s M6 Toll Up for Sale. Originally called the Birmingham Relief Road, the 43 km, six-lane M6 Toll is England’s only toll road, launched in 1991 under a 53-year concession, financed based on projected toll revenues. Due to lower-than projected toll revenue, the Macquarie Atlas concession company, Midland Expressway Limited (MEL), ceded ownership of the concession to the 27 institutions that provided the debt financing in 2013. The owners are launching a bidding process for M6 Toll this month, hoping to recoup most or all of the 2.45 billion Euro debt.

More Toll Roads Going All-Electronic. Work has been under way for months along the Massachusetts Turnpike, as vendors install gantries and equipment that will replace all the toll booths on this major toll road (which is also I-90). As of this writing, the conversion is scheduled to be completed in October. Back in July, the Hardy Toll Road in Houston completed its conversion to all-electronic over the weekend of July 16-17. That toll road is also being widened from two lanes each way to three, targeted for completion in early 2017.

Lidar on a Chip Could Advance Autonomous Vehicles. MIT and DARPA have announced the results of a research & development project that has succeeded in producing a Lidar sensor on a 300-millimeter wafer—”orders of magnitude smaller, lighter, and cheaper than Lidar systems available on the market today,” according to the news release. There are no moving parts, and the sensing beam is steered electronically, not mechanically, operating 1,000 times faster than current mechanical Lidars. At production volumes of millions of units per year, the cost could be in the vicinity of $10 each, compared with $50-100,000 for conventional Lidar units, such as mounted atop the Google cars.

Preferential Lane Use for Heavy Trucks. A July 2016 report from the Texas A&M Transportation Institute examines the pros and cons of allowing heavy trucks to use tolled managed lanes. It identifies five such facilities that permit such use: the I-595 Express Lanes in Fort Lauderdale, FL; the MnPass Lanes in Minneapolis/St. Paul, MN; the I-10 Katy HOT lanes in Houston, TX; the I-635 LBJ TEXLanes in Dallas, TX; and the I-820 North Tarrant Express managed lanes in Fort Worth, TX. The report provides a good overview of all the issues that must be considered in deciding whether such use of managed lanes makes sense.

Streamlining Toll Road Back Office Operations. FHWA has released a report offering suggestions for rethinking and simplifying an array of back office issues in toll collection, including business rules, data analysis, enforcement, interoperability, and privacy. “Congestion Pricing—A Primer: Effective Approaches to Streamlining Back Office Operations” is FHWA-HOP-15-037, released March 2016.

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Quotable Quotes

“Consider Walt Disney World. Famous for a splendid monorail system which moves 150,000 guests on any given day, the globe’s most popular themed resort transports even more guests via the state’s third-largest bus fleet. Revealingly, when it redesigned its old Downtown Disney shopping, dining, and entertainment center as Disney Springs, the transportation features it included—linking the rechristened area with nearby Typhoon Lagoon—wasn’t a monorail, but BRT lanes running down the Center of Buena Vista Boulevard. Listen, if even the insightful people movers at Disney aren’t eager to spring for additional monorail options—and they’re world-famous for such things—the idea that they’d be a primary, or even suitable, choice for our sprawling transportation challenges seems fanciful.
—Tom Jackson, “TBX Meets the Star Trek Test,” Florida Politics.com, Sept. 7, 2016

“[New York’s] Dollar vans—nimble and reactive as they are—might teach the Metropolitan Transportation Authority (MTA) something about the needs and preferences of passengers. The vans are fast because they make fewer stops than buses, which tend to load and unload every two blocks. City buses are slowed down further by the lack of all-door boarding and well-enforced bus lanes. ‘There’s a serious degree of policy inattention to operating the bus system in an effective way,’ says Jon Orcutt of Transit Centre, a research group. Investment is much lower than in the subway, which carries 5.7m riders daily and commands $14.2 billion from the MTA’s five-year capital plan. Buses, which carry 2.1m riders daily, get just $2 billion. As long as the city neglects its buses, dollar vans will be there to mind the gap.”
—”George Washington’s Bus,” The Economist, Aug. 20, 2016

“The ideal scenario that I talked about, saving the tens of thousands of lives a year, assumes complete [Level 5] automation with no human engagement whatsoever. I’m not confident that we will ever reach that point. I don’t see the ideal of complete automation coming anytime soon. Some people just like to drive. Some people don’t trust the automation, so they’re going to want to drive. [And] there’s no software designer in the world that’s ever going to be smart enough to anticipate all the potential circumstances this software is going to encounter. . . . The challenge is when you have not-so-complete automation, with still-significant human engagement—that’s when complacency becomes an issue. That’s when lack of skills becomes the issue. So our challenge is: How do we handle what is probably going to be a long-term scenario of still some human engagement in this largely automated system?”
—Christopher Hart, Chairman, National Transportation Safety Board, in Andrew Rosenblum, “Fully Autonomous Cars Are Unlikely, Says America’s Top Transportation Safety Official,” MIT Technology Review, Aug. 31, 2016

“Probably what Ford would do to meet their 2021 [autonomous taxi] milestone is have something that provides low-speed taxi service limited to certain roads—and don’t expect it to come in the rain,” says Steven Shladover. . . . Alain Kornhauser says “By then we may be able to define a ‘fenced’ region of space where we can in fact let cars out there without a driver. The challenge will be making that fenced-in area large enough so that it provides a valuable service.”
—T. Simonite, “Prepare to Be Underwhelmed by 2021’s Autonomous Cars,” MIT Technology Review, Aug. 23, 2016.

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