In this issue:
- Rights and wrongs of Interstate tolling
- Compact development and VMT reduction
- Millennials revisionism, continued
- Amtrak’s dubious ridership gains
- New Studies Urge Waterways P3s
- Follow-up on Treasury report
- Upcoming Transportation Conferences
- News Notes
- Quotable Quotes
The prospect of a $1 trillion federal infrastructure program has led to numerous hands out for pieces of the action. Some officials are presenting the mismanagement of their highway systems (“years of under-investment” in South Carolina; “crumbling roads” due to underfunding in Mississippi) as a reason why someone else should pay to upgrade their highways.
In sharp contrast, states with competent toll agencies—such as Florida, Illinois, Kansas, Oklahoma, New Jersey, Texas—have well-funded programs to extend and widen critically important Interstate highways and bridges. Not surprisingly, then, a growing number of governors and legislatures are looking anew at toll financing.
Last month Fitch Ratings issued a thoughtful report, “U.S. Interstate Tolling Merited but Warrants Caution.” Tolls are a quintessential user fee, assuming the proceeds are used to benefit those who pay them, notes Fitch. But its report acknowledges that “the current tolling framework across the U.S. seems to have no sustainable, policy-based rationale,” with cross-subsidies and little transparency to the citizen. And on nearly all toll roads, customers must pay tolls in addition to fuel taxes, leading to concerns about “double taxation.”
From my own reading and research, here are some of the problems with 20th-century tolling that will need to be addressed in order to build public and political support for something as bold as toll-financing the replacement of 20th-century Interstates with their 21st-century successors:
- Toll roads as cash cows: The most blatant example is Pennsylvania’s infamous 2007 Act 44, which forces the Pennsylvania Turnpike Authority to diveret $450 million per year to the state DOT for roads and transit statewide, leading to large annual toll rate increases that are essentially a tax solely on Turnpike customers.
- Temporary tolls: This is the 20th-century idea was that tolls are a necessary evil, to be removed as soon as the initial bonds are paid off. (This is about to happen in West Virginia.) That implies that a toll road does not need regular maintenance, future lane additions, and eventual reconstruction. With fuel tax revenue on a long downhill slide toward extinction, per-mile tolls should be part of the permanent replacement of per-gallon fuel taxes.
- Sticking outsiders with paying tolls: “Border tolling” keeps cropping up in states considering Interstate tolling—e.g., last-decade proposals in Virginia and current discussions in Connecticut and elsewhere. Any such tolls would assuredly be shot down in federal court as discriminatory on interstate commerce grounds.
Fitch’s valuable report reminds us that any plan that broadens the use of tolling “will need to be perceived as fair.” And that means any new framework must demonstrate value for money to those asked to pay for improved replacement highways and bridges. Among other things, that means the “double taxation” concern must be addressed. Fitch notes that targeted credits and [fuel tax] rebates to offset inequities could be ways to address the perception of double taxation. In addition, “Tolling only at state lines will have adverse implications for travel and the perception of fairness.”
As I read news reports on current discussions of tolling involving governors and legislators, I’m worried by a lot of what I see. All too many public officials seem to be envisioning a program that would put tolls on Interstates in order to use them as cash cows for the entire state DOT’s under-funded budget. This idea has particularly colored many of the discussions in Connecticut and also seems to be West Virginia Gov. Justice’s rationale for keeping tolls on the West Virginia Turnpike for a few more years after the bonds are paid off—but only charging them at state borders!
A growing number of governors and legislators are eyeing the federal pilot program that permits three states to each toll-finance the replacement of a single aging Interstate highway. Discussions or studies that would lead to such an application are under way in Arkansas, Connecticut, Indiana, Michigan, Oregon, Pennsylvania, Wisconsin, and even Wyoming. As of now, there appear to be only two vacant slots in the program (assuming Missouri’s request for a six-month extension of its slot is granted by FHWA).
From what I read and hear in these states, few of their officials seem to understand that the pilot program requires all the toll revenue generated by the rebuilt Interstate to be used for the capital and operating costs of the Interstate in question, not spread around statewide. In addition to reading the language Congress agreed to (it’s the Interstate System Reconstruction and Rehabilitation Pilot Program), they should read Fitch’s thoughtful report. It offers wise counsel not just for Pilot Program applicants but also for longer-term use of toll financing for 21st century Interstates.
A recent article in the Los Angeles Times was headlined, “California Won’t Meet Its Climate Change Goals without a Lot More Housing Density in its Cities.” It reminded readers that a basic premise of the state’s plan to reduce greenhouse gas emissions to 40% below 1990 levels by 2030 is to reduce the amount of vehicle miles of travel (VMT). The article cites calculations showing that to meet this goal in the way prescribed, “By 2030 residents will have to travel by foot four times more frequently than they did in 2012, alongside a nine-fold increase in bicycling and a substantial boost in bus and rail ridership.” But according to planners, “Getting people out of their cars in favor of walking, cycling, or riding mass transit will require the development of new, closely packed housing near jobs and commercial centers at a rate not seen in the United States since at least before World War II. The article goes on to quote a number of experts who say that such densification is unlikely to be politically feasible.
But what if densification does not actually lead to significant reductions in driving? It’s become received wisdom among most land-use planners in recent years that densification is the key to serious VMT reduction. That view was challenged in a large-scale study by the Transportation Research Board in 2009, and in several follow-up studies by Reason Foundation (see http://reason.org/files/reducing_greenhouse_gases_mobility_development.pdf). But the planning community has relied on its own studies, the best-known of which is a 2010 paper in the Journal of the American Planning Association by Reid Ewing and Robert Cervero, which is one of the most-cited papers ever published in that journal. But it has now been challenged.
The Winter 2017 issue of JAPA includes a new paper by Mark R. Stevens of the University of British Columbia, “Does Compact Development Make People Drive Less?” Stevens used a relatively new technique called a “meta-regression analysis” to review an array of previous studies on this question. The methodology is intended to explain why studies on the same topic yield different results, while controlling for self-selection bias (people who don’t want to drive much choose to live in denser neighborhoods) and publication bias (journals tend not to publish studies that either produce modest or negative results or that challenge central beliefs).
What Stevens found, after using this methodology on 46 studies, is that people who live in denser areas drive less, but not by very much. As he summarizes at the end of the paper, “Planners who wish to reduce driving in their communities should probably not automatically assume that compact development will be very effective at achieving that goal.” He also points out that planners tend to ignore the costs of building compact communities.
As you might expect, JAPA‘s publication of such a paper aroused considerable controversy. Editor Sandra Rosenbloom devoted much of her “Letter from the Editor” in this issue to defending the decision to run it, noting that it not only passed peer review but that she also included responses from several other urban planning scholars, including Ewing and Cervero. And she added, “I believe it would be scholarly (and editorial) malpractice not to consider articles that challenge the received wisdom or to refuse to publish them when they receive good reviews.” I applaud her willingness to expand the discussion.
In previous issues of this newsletter, I have reported that early claims that Millennials are uninterested in cars or owning a home were premature, and probably reflected this generation’s misfortune of coming of age during the Great Recession and amassing an unprecedented level of student debt. Yet urban and transportation planners continue to believe that the majority of Millennials prefer alternatives to driving, are happy living in apartments downtown, and shun suburbia.
Three recent news items provide further evidence that Millennials are pretty much like people of other generations—except for having lower disposable income at this stage of their lives. The first article focused on Millennials working in Washington, DC: “After Finally Wooing Millennials, Washington Cannot Hold Them” (Washington Post, March 2, 2017). It reports that two-thirds of those in their 20s and 30s would consider moving away for the right job, in part because the metro area is such an expensive place to live. And as reporter Abha Bhattarai put it, “For all the talk of public transportation, ride-sharing, and cycling, 60 percent of Washington’s Millennials drive themselves to work each day.” (The national average for drive-alone commuting is 80%.)
And speaking of transportation, in a Feb. 27th piece in LeftLane, Drew Johnson reports that “Millennials are buying new cars at a rapid pace,” to quote the piece’s headline. In 2011, this generation accounted for only 20% of new car buyers; today it’s up to 29%, and “by 2020 analysts believe Millennials . . . will represent 40% of the new car market.” Autotrader reports that Millennials are buying cars that cost less in terms of monthly payments, even if that means extra-long leases.
Urban geographer Joel Kotkin posted a dismaying piece at NewGeography.com Feb. 6th headlined, “The High Cost of a Home Is Turning Millennials into the New Serfs.” He cites figures on Millennials’ incomes from Zillow.com that in many trendy markets it is all but impossible for them to come up with a down payment. For example, rent now takes up to 45% of Millennials’ income in Los Angeles, Miami, New York, and San Francisco. Kotkin disputes the still-common assumption that Millennials aren’t very interested in owning a home:
“It’s not a lifestyle choice, but economics—high prices and low incomes—that are keeping Millennials from buying homes. In survey after survey—roughly 80 percent, including the vast majority of renters—express interest in acquiring a home of their own. Nor are they allergic, as many suggest, to the idea of raising a family, albeit at a later age. . . . Roughly 80 percent of Millennials say they plan to get married, and most of them are planning to have children.”
He quotes housing economist Jed Kolko as noting that when people enter their 30s, they tend to leave core cities for the suburbs. He also cites FiveThirtyEight as finding that younger Millennials are moving to the suburbs at a faster clip than previous generations.
Urban and transportation planners need to get out of their bubbles and recognize what the data reveal. Millennials, it appears, have the same general desires as previous generations. But their relatively lower disposable income means it is taking them a bit longer to buy a car, get married, and buy a house in the suburbs.
In lobbying for increased federal funding last month. Amtrak CEO Wick Moorman told a Senate subcommittee, “More than ever, our nation and the traveling public rely on Amtrak for mobility. Politifact looked into this assertion, and came up with the following numbers:
- Ridership: 31.3 million passengers in fiscal 2016, a new high
- Passenger miles: 6.5 billion in FY 2016, slightly less than in 2015
- Load factor: 50.9% in 2016, down from 51.3% in 2015
- Fraction of intercity commercial passenger miles on Amtrak: 0.7%, down from 1.2% in 1990.
Based on this not exactly sterling performance, Politifact rated Moorman’s claim Half True.
As a further check on Moorman’s point, I went to the U.S DOT’s Bureau of Transportation Statistics (BTS) website and reviewed its graph of monthly Amtrak passenger miles from January 2000 through December 2016. The seasonally adjusted monthly numbers were basically flat at around 470 million/month from 2000 through 2004, showed a modest uptrend from 2005 to 2010, and have been basically flat at around 550,000/month for the past six years.
So Amtrak’s ridership is hardly soaring, and its dismal 50% load factor calls into question its plans for spending $120 billion over the next 30 years just to upgrade its Northeast Corridor (Boston to Washington) to four tracks all the way, with some new tunnels, bridges, and stations, in order to accomplish two main goals: to greatly increase the number of daily trains and to reduce trip times by 45 minutes between Boston and New York and 35 minutes between New York and Washington. Amtrak hopes to get most of that $120 billion ($4 billion a year over 30 years) from federal taxpayers.
I find both justifications pretty weak in terms of benefits versus $120 billion in costs. Amtrak could nearly double its ridership if it simply filled all its existing trains, given its dismal 50% load factor (compared with airlines running about 85% on average these days). To be sure, there would be some increase in ridership if Amtrak provided faster trips, but a 21% decrease in the Acela Express New York-Boston trip time (now 3.5 hours) is not really that much of an improvement.
All this neglects Amtrak’s massive losses on long-distance trains. One of the few reforms in recent decades was the elimination of its biggest money-pit, the Sunset Limited route between New Orleans and Florida. A political coalition called the Gulf Coast Working Group is pushing for that route to be restored. Freight railroad CSX, whose tracks would be used, estimates the cost of upgrades to bridges and right of way to make Amtrak service reliable (and non-interfering with its freight trains) as $2 billion in capital costs, plus ongoing maintenance, as well as operating subsidies of several hundred dollars per passenger.
And where would Congress find the money for either the Northeast Corridor plan or the restored Gulf Coast route? The new Gateway Program Development Corporation—formed to oversee the $24 billion Gateway project for new tunnels across the Hudson River (part of the overall Northeast Corridor plan), voted in January to apply for a $6 billion loan from the Federal Railroad Administration. As I’ve written previously, since Amtrak has operated in the red every year of its existence, it has no way to repay such a loan—other than getting much larger congressional appropriations. In other words, federal loans to Amtrak are a sham; they are deferred grants. And there is no reason to think that the $2 billion Gulf Coast project or the $120 billion Northeast Corridor project would be any different.
While most news reports focus on the poor condition of America’s roads and bridges, our inland waterway infrastructure may be in even worse shape. Over the past few months, two studies that focus on tapping private financing for waterways have been released. The first titled, “Alternative Financing & Delivery of Waterways Infrastructure” and written by the Task Committee on Alternative Financing for Waterways Infrastructure, is a joint effort of the American Society of Civil Engineers (ASCE) and selected members of the Army Corps of Engineers (the agency responsible for the waterways system). The second study, “Tapping Private Financing and Delivery to Modernize America’s Federal Water Resources,” was written by former mayor of Indianapolis and government reform scholar Steve Goldsmith of the Ash Center at Harvard University’s Kennedy School of Government, and Jill Jameson of Jones, Lang LaSalle.
According to the Harvard study the U.S. inland waterway system is 12,000 miles long and connects 41 states. It contains 475 Corps-operated locks and dams, 337 reservoirs, more than 8,000 miles of irrigation canals and 40,000 miles of levees. Yet overall funding, which has shrunk from 0.16% of the nation’s Gross Domestic Product (GDP) in 1962 to 0.04% today, has not kept pace with needs. Many inland waterway facilities have exceeded their design lives and are failing. A December 2016 outage at the New Cumberland lock downstream of Pittsburgh halted shipping traffic for six days, while short-term repairs took place. Longer-term repairs are just now being completed.
The Harvard and ASCE studies have a few differences. The Harvard study is blunter on the need to modernize inland waterways infrastructure. While the ASCE study suggests improvements will reduce delays and help the economy, the Harvard study states, “(T)hat failure to act will yield adverse economic and social consequences for the nation.” The Harvard study also goes into slightly greater details about different project delivery methods, the potential of value capture as a funding mechanism, and developing a pilot P3 revolving fund for water resource projects. It also includes suggestions on how to fill a waterways funding gap.
Since current funding cannot keep up with the demand to maintain the waterways, not to mention new construction, both reports recommend alternative finance and delivery mechanisms such as public-private partnerships (P3s). Both also note the advantages of the public and private sector working together, including quicker implementation, life-cycle focus, risk transfer, improved service level, heightened accountability, and better value-for-money for taxpayers.
However, as the ASCE report details, there are currently three major barriers to P3s. First, there is a limited ability to charge project-specific user fees. P3s need a reliable funding source—either usage-based payments such as tolls or budget-based payments typically termed availability payments. However, some types of user fees are actually prohibited by federal law—such as tolls on inland waterways.
Second, the federal government does not have the ability to enter into multiyear P3s without special exemptions. Securing an exemption is time-consuming and subject to political expediency. Third, long-term (e.g., 35-year) federal payment obligations are scored against project in the first year. With these arcane scoring rules, it is never cheaper to enter into a P3, and thus a project sponsor will choose public funding instead.
To overcome these barriers, the Water Resources and Redevelopment (WRRDA) Act of 2014 and the Water Resources Development Act (WRDA) of 2016 authorized the Corps to examine pilot projects for alternative financing methods. Yet constraints and opposition from the barge industry have prevented Congress from appropriating any funds for the pilot program. The ASCE study recommends that Congress authorize funding for the pilot program that was part of the 2016 water bill.
Both studies urge political leaders to eliminate the three major barriers to P3s. The Harvard study recommends enabling both user-pays and budget-based P3s, fixing the policy framework for non-federal P3s, and creating a framework for both P3s and P4s. The ASCE study suggests encouraging public officials to use alternative finance and delivery as a tool, changing federal budget scoring and calculations metrics, developing a more effective approach to revenue generation, providing the Corps greater authority to enter into P3s, and encouraging states without P3 statutes to develop enabling legislation.
The Harvard study also details one more salient point on P3 authority. In the past OMB has allowed exemptions for certain programs. Revising OMB Circular A-11 and Appendix B, which were written 30 years ago and are out-of-sync with modern accounting principles, would have a major impact. For example, water infrastructure (such as locks and dams) is treated similarly to a real estate investment—as a private holding with no public good. Yet waterways clearly serve the public by providing a low-cost transportation option.
Much of the country’s inland waterways infrastructure is near the end of its life and needs to be modernized. Both reports detail how modernizing the system need not require a massive influx of federal funding. Allowing user fees to be imposed while leveling the playing field for P3s could stimulate the needed investment.
In the January issue I criticized the U.S. Treasury’s report on 40 infrastructure mega-projects for relying on cost and benefit estimates provided by the project sponsors, without any independent vetting. My friend Dick Mudge, one of the authors of the report, sent me some comments, which I am happy to reprint here, to clarify.
“Bob says that the economic analysis was provided by project proponents and thus cannot be taken seriously. In fact, we did not simply copy these reports. We adjusted them all to reflect consistent assumptions (same discount rate, etc.) and modified other assumptions. True, we did not make changes that would change a positive answer to a negative one, even when looking at projects such as Cal High Speed Rail that many of us view as a poor investment. In sum, we applied a consistent methodology and avoided the temptation to pick winners and losers.
“We recognize the softness of these numbers, including a bias toward over-estimating net benefits. Thus, we provide a range of B/C ratios. For example, using point estimates for all 40 projects implies a B/C ratio of 6 to 1. Instead, we mention 3.5 to 7 as the likely range. No surprise, but the report calls for improved analytic methods.
“The report stands out for its focus on net national economic impacts for individual projects. Most other work goes no further than estimating construction jobs, thus missing the long-term value of infrastructure. Most studies provide aggregate estimates of needed spending. While we all agree that there are significant quality differences between the ASCE [Report Card] and [U.S. DOT’s] Conditions & Performance report, the result is still a large, somewhat abstract number. The Treasury report was an attempt to show the reader that real projects exist. The bulk of the report contains two-page summaries of each project, complete with pictures and numbers.
“We were disappointed at the limited number of large-scale projects in the pipeline. Part of this reflects the structure of current federal programs, as well as a general focus on marginal improvements. ASCE and C&P also pick up these marginal improvements—all good to do for sure, but they tend to miss national or regional-scale projects. The Treasury report includes a few multi-state examples as well as two ‘mega’ projects, plus some suggested program changes.”
Note: We don’t have the time or 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.
Mileage-Based User Fee Alliance Annual Conference, March 16, 2017, New Zealand Embassy, Washington, DC (Adrian Moore speaking). Details at: www.mbufa.org
Feasibility of Private High-Speed Rail in Texas, March 22, 2017, Old Ebbitt Grill, Washington, DC (Baruch Feigenbaum speaking). Details from Jack Ventura, Transportation Research Forum DC Chapter (firstname.lastname@example.org)
Emerging Infrastructure Initiatives and Potential Roles for P3s, GMU Transportation P3 Policy Center, April 25, 2017, Arlington, VA (Robert Poole speaking). Details next month.
Higher-Clearance Bayonne Bridge Reopens. A major project to put a new deck on the Bayonne Bridge between Staten Island and New Jersey reopened on February 20th. The new structure will provide 215 feet of clearance below the deck, compared with 150 feet with the existing deck (which must still be removed before larger container ships can pass beneath the bridge). Because the Port of New York & New Jersey is the largest east coast container port, fleet owners using the newest mega-ships have been reluctant to serve the east coast, because they typically make several stops besides New Jersey. Several other east coast ports already have channels that are deep enough, and will likely be served by larger ships once the Bayonne’s old deck is removed and larger ships can reach the New Jersey terminals.
Colorado Faces Backlash over HOV-3 Rule. Several years ago, at the recommendation of Colorado DOT, the legislature approved an increase in the occupancy rate that would qualify carpools to use HOV and express toll lanes at no charge. That change went into effect in January, helping to unclog HOV lanes and enable the large majority of vehicles in express toll lanes to be toll-paying. Annoyed car-pool groups are asking the legislature to revert to the previous policy—but the price tag would be high. In addition to reducing the effectiveness of pricing on the metro area’s growing network of express toll lanes, such a change would cost taxpayers real money. The Legislative Council estimates this would cost $4.6 million per year on U.S. 36 and $800K per year on I-25. In addition, the Council estimates that without toll revenue, it would cost more than $1 billion to add a non-tolled lane each way on I-25.
LA Metro Seeks Proposals for I-405 Express Lanes. The transportation agency for Los Angeles County has pre-qualified teams headed by Parsons Transportation Group and Cintra U.S. Services to submit competing proposals to add express toll lanes to I-405 in the congested Sepulveda Pass corridor. The estimated cost of the project is $1.6 billion. LA Metro has received more than 50 unsolicited proposals for various P3 transportation projects, according to Public Works Financing.
New York Subways Lack Advanced Train Control. A piece posted last month on The American Interest‘s site discusses a New York Times article on increasing delays on the city’s aging subway system. Commentator “HZC” points out that the system largely lacks modern digital Communications Based Train Control (CBTC), relying mostly on an old-fashioned analog system. The latter can tell dispatchers only which section of track a train is on, not where it actually is. With CBTC, the dispatcher would have real-time location and speed data, permitting trains to run closer together safely. HZC also states that “Unions don’t like CBTC because it eliminates lots of jobs.”
Possible Managed Arterial in Orlando. The Central Florida Expressway Authority faces costly right-of-way acquisition battles as it seeks to extend its busy SR 408 toll road eastward. That has prompted Florida DOT to suggest a possible alternative: building four toll lanes in the middle of parallel arterial SR 50. The project has been dubbed Colonial Parkway, and FDOT has allocated $4 million for major planning studies. Adding express toll lanes to an arterial is akin to the concept of Managed Arterials, in which motorists would be charged a variable toll to bypass signalized intersections using overpasses or underpasses.
Truck Platooning Goes Commercial. The leading developer of truck platooning technology, Peloton, last month announced it has teamed with fleet systems provider Omnitracs to bring platooning to the latter’s fleet customers. Peloton will outfit trucks with its system that provides cooperative adaptive cruise control with vehicle-to-vehicle communications to permit automated braking by following trucks within 0.1 second of brake application by the lead truck. Omnitracs will market platooning to the fleets it works with, helping to locate equipped trucks for inter-fleet platooning opportunities.
Texas High-Speed Rail: Caution Ahead. That’s the title of a new Reason policy brief by Baruch Feigenbaum. The author questions the expected $10-12 billion cost of the project as a serious under-estimate, and judges the company’s estimates of traffic and revenue to be unprecedentedly high. The conclusion is that the project is highly likely to require taxpayer subsidies, contrary to repeated assertions to the contrary by Texas Central Railway. (http://reason.org/files/texas_high_speed_rail.pdf)
Google Going Head-to-Head with Uber and Lyft. Last month Google announced a new ride-sharing app based on its popular Waze traffic app. The idea is for those commuters who use Waze to plan their trips to be able to offer shared rides to users of the new Waze Carpool app. Riders pay the driver up to 54 cents per mile (the current IRS reimbursement rate for using a personal car for business). Waze thus far does not charge the driver anything, but if the service is successful, it will likely do so, according to a Wall Street Journal article (Feb. 23rd).
Michigan to Test More-Durable Highways. Major highways in Michigan are built to last only 20 years, and when they receive inadequate maintenance due to highway funding shortfalls, their useful life is even shorter. But Michigan DOT is now embarking on a pilot program to test 30-year and 50-year pavements. Four pilot projects will be built under the program, two of asphalt and two of concrete. The designs will stress ideal drainage and improved frost resistance.
Heritage Releases an Infrastructure Agenda. A conservative think tank that provided considerable assistance to the Trump transition team has released a 10-page agenda of DOs and DON’Ts for a sound infrastructure policy. The report is “Building on Victory: An Infrastructure Agenda for the New Administration,” written by Heritage Foundation researcher Michael Sargent. As important as the suggestions for what to do are the recommendations of what not to do—such as configuring the program as “stimulus” rather than as a means to improve the economy’s productivity or authorizing further subsidies. (www.heritage.org/budget-and-spending/report/building-victory-infrastructure-agenda-the-new-administration)
PrePass Expands into Texas Tolling. Trucking companies that use the PrePass system to bypass weigh stations and pay tolls electronically can now use the toll-paying feature in Texas. Their PrePass transponder will now work on toll facilities of Texas DOT, the North Texas Tollway Authority, and the Harris County Toll Road Authority.
P3 Projects for Rural America. Concerns have been raised that if the new federal infrastructure program focuses on P3 procurements using private-sector financing, rural areas will lose out, since they don’t have enough highway traffic to generate robust toll revenue streams. In a Feb. 21st op-ed in The Hill, John Buttarazi explains how concessions based on availability payments can bring P3 benefits to such projects. A good example is the $1.8 billion Rapid Bridge Replacement Project in Pennsylvania, which is replacing or repairing more than 500 aging bridges and will maintain them for 25 years. The cost savings and risk transfer benefits still apply, even though there is no toll revenue stream. Instead, Pennsylvania DOT has committed to an annual availability payment stream over the 25-year period, from its annual budget.
Macquarie Atlas Buys the Rest of Dulles Greenway. The company that already owned 50% of the privately financed Dulles Greenway in northern Virginia last month purchased the other 50%. Macquarie Atlas Roads purchased the half-interest from Macquarie Infrastructure Partners. The purchase increases Macquarie Atlas’s share of toll income from U.S. projects to 16%, up from a previous 9%.
New Truck Parking Studies Posted. The American Transportation Research Institute has posted on its website two new studies done in conjunction with Minnesota DOT on truck parking. One tested the ability to assess truck parking supply and demand at Minnesota rest areas using GPS data. The other tested several different ways to make real-time parking information available to truck drivers. Both reports are online at www.atri.org.
Bill Would Protect Privacy on Massachusetts Turnpike. The Mass. Pike’s new all-electronic tolling system includes a feature called “hot list” which law enforcement agencies can use to gain detailed information on specific vehicles that use the toll road. Mass DOT stated last October that such information would be released only in response to a subpoena, but State Sen. Eric Lesser has introduced a bill to enforce such privacy controls by law, not just via agency policy.
“Gridlock Christmas” Replicated in Seattle. Back in 1988 the Hollytones had a novelty hit record called “Gridlock Christmas,” about people on Christmas Eve stuck in gridlock on the freeway exchanging gifts and preparing an ad-hoc Christmas dinner. I thought of that when I saw a news item from The Week about Seattle commuters stuck on I-5 getting lunch from a taco truck that was stuck along with them on the freeway.
“Underestimating cost and overestimating benefits for a given project leads to two problems. First, the project may be started despite the fact that it is not viable. Or, second, it may be started instead of another project that would have shown itself to yield higher returns, had the real costs and benefits of both projects been known. Both cases result in the misallocation of resources, and for public projects, waste of taxpayers’ money. Thus, for reasons of economic efficiency alone, the arguments for cost under-estimation and benefit over-estimation must be rejected. But the argument must also be rejected for legal and ethical reasons. In most democracies, for project promoters, planners, and managers to deliberately misinform legislators, administrators, bankers, the public, and the media about costs and benefits would not only be considered unethical but in some instances also unlawful. Not only would economic efficiency suffer but also democracy, good governance, and accountability.”
—Bent Flyvbjerg, “Megaprojects: Over Budget, Over Time, Over and Over,” Cato Policy Report, January/February 2017
“Public-private partnerships (P3s) have already proven successful in the development of several Texas roadways. Take, for instance, the $2.6 billion LBJ Express in North Dallas. This project was made possible by a P3 that allowed the state to leverage its funds to complete one of the most complex highway reconstruction corridors in the nation. This 13.3 mile, state-of-the-art highway opened in September 2015, three months ahead of schedule and 10 years faster than a traditionally built project. Since its opening, the LBJ Express has seen a 10 to 15% increase in the daily number of vehicles using the roadway, and overall congestion relief is averaging nearly 70%, with speeds up by 15% across the entire highway.”
—Chris E. Wallace, Texas Association of Business, “A Private-Sector Solution to Traffic Jams,” Caller.com, March 13, 2017
“One must always be aware of the caveats! Here [on the V2V rule], the caveats are “potential” and “fully deployed.” Potential implies that vehicles don’t already have Automated Collision Avoidance (ACA) systems that work. If they do, the potential reduction of crashes that this proposed rule would have is a small fraction of what is claimed. Moreover, an infinitesimally small portion of what is already a small fraction can’t be achieved until there is substantial deployment. V2V only avoids crashes between vehicles that BOTH have the mandated technology. That means the chances that V2V can play a part is the product of the probability that vehicle A has it and the probability that vehicle B has the technology. It isn’t until 70% of the vehicles on the road have the technology that there is even a coin flip’s chance that V2V could play any part in avoiding a crash (0.7 x 0.7 = 0.49). That level of penetration isn’t going to happen for at least 25 years given that there is no retrofit requirement.”
—Alain Kornhauser, “U.S. DOT Advances Deployment of Connected Vehicle Technology to Prevent Hundreds of Thousands of Crashes,” Smart Driving Cars, Dec. 14, 2016
“The angst over toll roads [in Texas] is nonsensical and reactionary. A toll does not raise your taxes—but it does reflect that your taxes are not covering the true cost of our transportation needs. A toll is a user fee. If you want to use a road to speed up your commute, then you can pay for that opportunity. But you can always choose to go a different route, and you will benefit from those who opt for tolls. Those who find tolls unpalatable will undoubtedly voice their frustrations and concerns—as they have in the past. But rather than railing against the prospect of toll roads here, ignoring the dire state of congestion, toll opponents should really advocate an increase in the gas tax. . . . But state lawmakers have shown zero interest in raising the gas tax, which is exactly why toll roads need to be on the table. The goal here is to keep people moving. Toll roads help make that happen. We only slow ourselves down when we frame the issue any other way.”
—Editorial, San Antonio Express-News, Feb. 14, 2017